Assistance to SEBI by IT authorities in discharge of their functions. - Income Tax - 5161/1993

INSTRUCTION NO. 5161/1993 Dated: October 27, 1993 Section(s) Referred: 143(3) Statute: Income - Tax Act, 1961 Securities and Exchange Board of India (SEBI) has been established to regulate the securities market and to protect the interests of the investors. Its functions include inter alia (a) regulating the business of stock exchanges and (b) prohibiting fraudulent and unfair trade practices in the securities. In setting up the SEBI, the Government intended inter alia that it shall ensure that the share prices and in particular Bombay Stock Exchange Sensitive Index are based on genuine fundamentals and technical factors which normally influence share prices and that these are not guided by excessive speculation on the stock exchange or irregularities in the transactions. Income-tax authorities may come across unusual transactions by the brokers and others in the course of their investigations. I am directed to say that such instances must be brought to the notice of the SEBI so as to enable them to properly discharge their function of the regulation of stock market. It may be added that SEBI has been notified u/s.138(1)(a)(ii) of the I.T. Act, 1961 by the Board by notification F.No. 225/230/92-ITA II dated 10-2-93. F.No. 414/126/93-IT(Inv.I)