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AO can issue Sec. 133 notice to financial institutions seeking info. of depositors on deposit above 1 lakh

Written By Admin on Wednesday, 13 November 2013 | Wednesday, November 13, 2013

The ITO issued a issued a notice u/s 133(6) to the assessee-bank u/s 133(6) of the Act calling for general information regarding details of all persons who have made cash transactions and time deposits of Rs. 1,00,000/- and above for the period of three years between 01.04.2005 and 31.03.2008. The assessee claimed that s. 133(6) does not empower the ITO to conduct a roving or fishing enquiry into the affairs of the assessee or regarding the deposits made by its customers. It was also contended that the AO can only seek “case specific” or “area specific” information u/s 133(6). The High Court dismissed the Writ Petition. On appeal by the assessee to the Supreme Court HELD dismissing the appeal:

The Supreme Court held as under:

1) Powers under section 133(6) are in the nature of survey and a general enquiry to identify persons who are likely to have taxable income and whether they are in compliance with the provisions of the Act;

2) It would not fall under the restricted domains of being ‘area specific’ or ‘case specific’;

3) Section 133(6) does not refer to any enquiry about any particular person or assessee, but pertains to information in relation to ‘such points or matters’ which the assessing authority issuing notices requires;

4) This clearly illustrates that the information of general nature can be called for. Seeking names and addresses of depositors who hold deposits above a particular sum is certainly permissible.

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