2009 (8) TMI 1129 - HC - Income Tax

Summary

Issues involved: The judgment addresses the correctness and sustainability of the notice issued by the Income Tax Officer under Section 133(6) of the Income Tax Act, 1961 to Co-operative Banks, focusing on whether Co-operative Banks qualify as 'persons' under Section 2(31) of the Act, the requirement of prior approval of the Commissioner or Director, and the jurisdiction of the Income Tax Officer to issue such notices.

Issue 1 - Definition of 'Person' under Section 2(31) of the Income Tax Act:
The petitioners argue that Co-operative Societies, including Co-operative Banks, do not fall under the definition of 'person' as per Section 2(31) of the Income Tax Act, which includes various entities but does not explicitly mention Co-operative Societies. However, the court finds that Co-operative Societies are 'bodies corporate' and are considered 'persons' under the Act, as they are formed by members and operate under relevant laws.

Issue 2 - Requirement of Prior Approval for Issuing Notice:
The judgment clarifies that Section 133(6) of the Income Tax Act requires 'prior approval' of the Commissioner or Director when no proceedings are pending. The petitioners challenge the notices issued without such approval, but the court notes that in some cases, the concerned officer did obtain prior approval, rendering the challenge baseless.

Jurisdiction of the Income Tax Officer:
The petitioners contest the jurisdiction of the Income Tax Officer to issue the notices, arguing that the officer's designation as 'Income Tax Officer' instead of 'Assessing Officer' indicates lack of competence. However, the court explains that the term 'Assessing Officer' includes various officials as per the Act, and the notices were validly issued by the Income Tax Officer.

Conclusion:
Based on the analysis of the issues raised, the court upholds the validity of the notices issued to the Co-operative Banks under Section 133(6) of the Income Tax Act. The petitioners are given six weeks to comply with the directions in the notices, as per the previous verdicts and legal provisions cited in the judgment.