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TMI Blog2013 (11) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... give wide powers to the officers, of course with the permission of the CIT or the Director of Investigation to gather general particulars in the nature of survey and store those details in the computer so that the data so collected can be made use of for checking evasion of tax effectively. Reliance has been placed on the judgment in the case of Karnataka Bank Ltd. v. Secretary, Government of India and Ors., [2002 (2) TMI 1285 - SUPREME COURT], wherein it was observed that it is not necessary that any inquiry should have commenced with the issuance of notice or otherwise before Section 133(6) could have been invoked. It is with the view to collect information that power is given under Section 133(6) to issue notice, inter alia, requiring a banking company to furnish information in respect of such points or matters as may be useful or relevant. The second proviso makes it clear that such information can be sought for even when no proceeding under the Act is pending, the only safeguard being that before this power can be invoked the approval of the Director or the Commissioner, as the case may be, has to be obtained. Powers under section 133(6) are in the nature of survey and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. The appellant- assessee before us is a Service Co-operative Rural Bank. The Income Tax Officer (CIB), Calicut issued a notice bearing F.No. ITO (CIB)/Clt/2008-09 to the assessee under Section 133(6) of the Act calling for general information regarding details of all persons (whether resident or non- resident) who have made (a) cash transactions (remittance, transfer, etc.) of Rs. 1,00,000/- and above in any account and/or (b) time deposits (FDs, RDs, TDs, etc.) of Rs. 1,00,000/- or above for the period of three years between 01.04.2005 and 31.03.2008, dated 02.02.2009. It was expressly stated therein that failure to furnish the aforesaid information would attract penal consequences. The assessee objected to the said notice on grounds, inter alia, that such notice seeking for information which is unrelated to any existing or pending proceeding against the assessee could not be issued under the provisions of the Act and requested for withdrawal of the said notice by its letter-in-reply, dated 26.02.2009. The Assessing Authority addressed to the objections raised by the assessee and accordingly rejected them by letter dated 05.03.2009. The relevant paragraphs of the said letter ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and co-operative societies are allowed to maintain deposits beyond the scrutiny of the Income Tax Department, then the societies will become safe havens for hoarding back money in the country which is opposed to public policy. Besides this, the statutory authorities vested with the responsibility to levy tax on income will be prevented from achieving their objective and that will defeat the very purpose of the Income Tax Act....' 5. The assessee, aggrieved by the aforesaid, filed Writ Petition No. 9737 of 2009 before the High Court challenging the notice dated 02.02.2009. The learned Single Judge has discussed the case of the assessee including the submissions made by the parties in extenso and reached the conclusion that the impugned notice was validly issued under the provisions of the Act and therefore, dismissed the said petition by judgment and order dated 27.03.2009. 6. Thereafter, the assessee approached the Division Bench of the High Court by way of Writ Appeal No. 1854 of 2009 questioning the said notice on grounds, inter alia, that the issuance of such notice under Section 133(6) is bad in law as Section 133(6) only provides for power to seek information in case of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Assessing Officer, the Deputy Commissioner (Appeals), the 1[Joint Commissioner] or the Commissioner (Appeals), giving information in relation to such points or matters as, in the opinion of the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or the Commissioner (Appeals), will be useful for, or relevant to, any enquiry or proceeding under this Act: Provided that the powers referred to in clause (6), may also be exercised by the Director General, the Chief Commissioner, the Director and the Commissioner. Provided further that the power in respect of an inquiry, in a case where no proceeding is pending, shall not be exercised by any income- tax authority below the rank of Director or Commissioner without the prior approval of the Director or, as the case may be, the Commissioner. Provided also that for the purposes of an agreement referred to in section 90 or section 90A, an income-tax authority notified under sub- section (2) of section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the parties. It is the case of the assessee that though this Court in Karnataka Bank case (supra) has considered the powers of respondent-authorities to issue notice under Section 133(6) but has not considered as to whether the said provision clothes the respondent-authorities with any power for conducting a roving or fishing enquiry into the affairs of the assessee or regarding the deposits made by its customers. Further, that this Court has considered only "case specific" or "area specific" information sought under Section 133(6). Learned Counsel for the assessee would therefore submit that the High Court has erred by not appreciating the decision of this Court in Karnataka Bank case (supra) and erroneously dismissed the case of similarly placed banks. 14. Au contraire learned Solicitor General for the Assessing Authority, would support the impugned judgment and order and contend that for the purposes of enquiry under the provisions of the Act, the Assessing Authority can issue such notice under the said Section. 15. Having noticed the aforesaid, in order to appreciate the contentions canvassed by the parties to the lis, we must examine the import of the term "enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of Section 133(6) was expanded to include issuance of notice for the purposes of enquiry. The object of the amendment of section 133(6) by the Finance Act, 1995 (Act 22 of 1995) as explained by the CBDT in its circular shows that the legislative intention was to give wide powers to the officers, of course with the permission of the CIT or the Director of Investigation to gather general particulars in the nature of survey and store those details in the computer so that the data so collected can be made use of for checking evasion of tax effectively. The assessing authorities are now empowered to issue such notice calling for general information for the purposes of any enquiry in both cases: (a) where a proceeding is pending and (b) where proceeding is not pending against the assessee. However in the latter case, the assessing authority must obtain the prior approval of the Director or Commissioner, as the case maybe before issuance of such notice. The word "enquiry" would thus connote a request for information or questions to gather information either before the initiation of proceedings or during the pendency of proceedings; such information being useful for or relevant to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pending before any authority under the Act. Admittedly, in the present case notice was issued only after obtaining approval of the Commissioner of Income Tax, Cochin. In light of the aforesaid, we are of the considered opinion that the Assessing Authority has not erred in issuing the notice to the assessee- financial institution requiring it to furnish information regarding the account holder with cash transactions or deposits of more than Rs. 1,00,000/-. 21. Therefore, we hold that the Division Bench of the High Court was justified in its conclusion that for such enquiry under Section 133(6) the notice could be validly issued by the Assessing Authority. 22. In view of the above, the appeal requires to be dismissed and accordingly, stands dismissed. In C.A.NO.7487-7517 OF 2013 @ S.L.P.(C)No.3994-4024 OF 2010 WITH C.A.NO.7518-32 OF 2013 @S.L.P.(C)No.5194-5208 OF 2010 WITH C.A.NO.7461 OF 2013 @S.L.P.(C)No.11135 OF 2010 WITH C.A.NO.7468-81 OF [email protected].(C)No.11454-11467 OF 2010 WITH C.A.NO.7483 OF 2013 @ S.L.P.(C)No.13778 OF 2010 WITH C.A.NO.7482-7484 OF 2013@ S.L.P.(C)No.11909-11911 OF 2010 WITH C.A.NO.7534 OF 2013 @ S.L.P.(C)No.4442 OF 2011 AND WITH C.A.NO.7486 OF 2013 @ S. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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