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TMI Blog2003 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... NT The judgment of the court was delivered by G. SIVARAJAN J. -The scope and ambit of section 133(6) of the Income-tax Act, 1961 (for short "the Act") as amended by the Finance Act, 1995, arise for consideration in these appeals. All these writ appeals arise from a common judgment of the learned single judge in O.P. No. 30610 of 2002 - M.V. Rajendran v. ITO [2003] 260 ITR 442 (Ker) and connected cases. The petitioners in the writ petitions are the appellants. All the appellants are either co-operative societies or co-operative banks registered under the Co-operative Societies Act. Being aggrieved by a communication of the nature of exhibit P2 in O.P. No. 30610 of 2002--M.V. Rajendran v. ITO [2003] 260 ITR 442 (Ker) received from the income-tax authority having jurisdiction over the petitioners calling for information such as a list of persons, who have made term/recurring deposits of Rs. 50,000 and above as on date along with their complete postal addresses, etc., they have filed the writ petitions. In the notice it is stated that the information is required in connection with the investigation of the appellants' case and the same is required under section 133(6) of the Act. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st banking companies and other financial institutions engaged in receiving deposits from the customers. Counsel pointed out that the analogy drawn by the learned single judge based on the provisions of section 269SS was not justified since the proviso to the said section specifically excludes any loan or deposit taken or accepted by any banking company, post office or co-operative bank and as such there was no question of verification of the compliance with section 269SS of the Act. Counsel further submitted that by furnishing the details of deposit to third parties the secrecy that should exist between a banker and customer is also lost and that under law the obligation is only to furnish the details of his customers' account only in specified cases. Counsel also relied on a decision of the English court in Parry Jones v. Jaws Society [1969] 1 ct at page 9 in support. Counsel also submitted that the learned single judge erred in relying on the decision rendered in the context of the provisions of section 269SS of the Income-tax Act to hold that the roving enquiry is permissible under section 133(6) of the Act. Counsel further submitted that the Calcutta High Court in Grindlays Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated in the notices. It is clear that the information sought for is of general nature in the nature of general survey in regard to the business of co-operative societies and co-operative banks. The main ground on which the appellants are canvassing the notices is that if all the information regarding the deposits made by the customers of the appellants is to be disclosed that will prejudicially affect the interest of the customers and consequently affect the secrecy that should exist between a banker and a customer and further adversely affect the business of the appellants. The other contention of the appellants is that section 133(6) does not clothe the officers with powers to conduct a roving enquiry into the details of deposits made by the customers of the appellants. Here, it must be noted that the appellants did not challenge the provisions of section 133(6) of the Act. They have only contended that section 133(6) of the Act does not give any power to the officers of the Department to gather information regarding all the deposits made by the customers of the appellants and the name and addresses of those customers. In other words, the dispute is only regarding the scope an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal sanction, the existing provisions to call for information have been amended. Now the income-tax authorities have been empowered to requisition information which will be useful for or relevant to any enquiry or proceedings under the Income-tax Act in the case of any person. The Assessing Officer would, however, continue to have the power to requisition information in specific cases in respect of which any proceeding is pending as at present. However, an income-tax authority below the rank of Director or Commissioner can exercise this power in respect of an inquiry in a case where no proceeding is pending, only with the prior approval of the Director or the Commissioner." A Division Bench of the Calcutta High Court in Grindlays Bank Ltd. v. ITO [1998] 231 ITR 612 considered the scope of the amended provisions of section 133(6) and held that even after the 1995 amendment the power under section 133(6) of the Act can be invoked only for the purpose of deciding the case pending before the officer. However, there is no detailed reasoning given for taking the said view. The learned single judge observed that a cooperative society or a co-operative bank will come within the defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 133(6). Therefore, the notice issued under section 133(6) is essentially to verify whether there is compliance with section 269SS by both depositors and acceptors, namely, co-operative societies and cooperative banks, and since section 269SS is upheld by the Supreme Court in the decision referred to above, I do not think the petitioners can challenge the notice issued calling for details of deposits." It was also observed that the powers under section 133 are in the nature of survey and a general enquiry to identify persons who are likely to have taxable income and so whether there is compliance by them in regard to payment of tax. Meeting the contention of the appellants that banking companies including nationalised banks are not called upon to furnish details generally with regard to deposits held by the customers the learned single judge observed thus: "They further contended that the banking companies including nationalised banks are not called upon to furnish details generally with regard to deposits held by them. Learned standing counsel for the respondents denied this allegation and he has contended that the banking companies including nationalised banks are not immune ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that decision of the Supreme Court after extracting the provisions of section 133(6) of the Act as amended held as follows: "It is clear from the mere reading of the said provision 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. In the instant case, the notice dated July 7, 2000, indicates that it was at the instance of the Director of Income-tax (Investigation) that the information was sought for." From the above quoted passage, it is clear that it is not a condition for the issuance of a notice under section 133(6) of the Act that any proceedings under the Act against the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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