South Canara District Central Co-operative Bank Ltd. vs Income Tax Officer

V.K. Singhal, J.—By a letter dated September 15, 1998, the petitioner was required to furnish information u/s 133(6) of the Income Tax

Act, 1961, in respect of the deposits of Rs. 50,000 and above during the financial year 1997-98, i.e., from April 1, 1997 to March 31, 1998. The

information was required to be furnished within one week in respect of the name of the depositors/deposits, complete postal address of the

depositor, amount and date of deposit, rate of interest and term of deposit. It was mentioned that the Director of Income Tax (Investigation)

desired the information. It is stated by learned counsel for the petitioner that desiring of information cannot be equated with the approval of the

director in a case where no proceedings are pending.

Section 133(6) of the Income Tax Act confers the power on the Assessing Officer, the Deputy Commissioner (Appeals), the Joint

Commissioner and the Commissioner (Appeals) to require 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 Joint Commissioner or the Commissioner (Appeals), giving information in relation to such points or matters

as in the opinion of the said authorities will be useful for, or relevant to, any inquiry or proceeding under this Act. The information which is desired

could be asked by the Assessing Officer and the appellate authority and, therefore, has to be in relation to any enquiry or proceedings under the

Act. The word ""proceeding"" has been interpreted in a number of cases to refer to the pending or existing proceeding on the date of issue of notice.

The Bombay High Court in D.B.S. Financial Services Pvt. Ltd. Vs. Smt. M. George, Second Income Tax Officer and others, has also interpreted

the word ""proceeding"" as pending proceedings and not future proceeding. Before exercising the power u/s 133(6) of the Act there must be an

existing or pending proceeding.

The word ""enquiry"" which has been used in the section, however, has to be in a different connotation and enquiry could be during the pendency

of the proceedings or may be even prior to that for the purpose of initiating the proceedings under the Act.

If the enquiry is pending and during the pendency of the enquiry proceedings information is sought, then the power u/s 133(6) could be

exercised. If proceeding is not pending power in respect of an enquiry could be exercised by virtue of the second proviso of Section 133(6). That

enquiry could be even in a case where no proceedings are pending. It has not come on record that the Commissioner or the Director has given the

approval in the present case. From the notice issued it is not evident that any proceeding under the Act were pending or for the purpose of the

enquiry the approval of the Commissioner or the Director were taken.

In these circumstances, the notice issued is quashed. The respondent would be free to issue notice after taking approval from the Director or the

Commissioner as the case may be.