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TMI Blog2018 (1) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... td., M/s. Ananthavoor Service Cooperative Bank Limited, M/s. Marakkara Service Cooperative Bank Ltd., M/s. Ariyallur Service Cooperative Bank Limited, versus The Ad. DIT(I&CI), Kochi., The Addl. DIT(Intelligence), Kochi. SHRI GEORGE GEORGE K. JUDICIAL MEMBER Assessee by Shri Shri Jojo C.A., Adv. Revenue by Shri A. Dhanaraj, Sr. DR O R D E R Per GEORGE GEORGE K.,JUDICIAL MEMBER: These 21 appeals filed by different assessee's are directed against various orders of the CIT(A)-III, Kochi for different assessment years. 2. Since common issues and identical arguments were raised in all these appeals, they were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity. 3. Identical grounds are raised in all these appeal and they read as follows: 1. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in arriving into a conclusion that the Income tax Officer (Intelligence) is an authority to call for information u/s. 133(6) of Income tax Act without appreciating the fact that power to call for information u/s. 133(6) is vested on the Assessing Officer, the Deputy Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imary Agricultural Co-operative Society. The Income Tax Officer(Intelligence), Kochi issued notice u/s. 133(6) of the I.T. Act vide letter dated 10/09/2013 to the Secretary of the assessee-Society wherein following information was sought for. Sl. No. Information Required 1 Details of depositors of cash exceeding Rs. 5 Lakhs during the F.Y. 2010-11, 2011-12 & 2012-13. (Information regarding cash deposits in SB account where the aggregate of cash deposits is Rs. 5 Lakhs or above for the concerned years. While furnishing the information, all the cash transaction in the account are to be reflected date wise and not merely the aggregate amount. 2. Details of the payment of interest exceeding Rs. 10,000/- made to the depositors including interest on Fixed deposits. The above information was not furnished to the Department. Therefore, the Joint Director of Income Tax (Intelligence), Kochi initiated penalty proceedings u/s. 272A(2)(c) of the Act. Though the Secretary of the assessee-Society appeared before the officer, in the course of penalty proceedings, assessee did not furnish the required information. Therefore, the Joint Director of Income Tax(Intelligence), Kochi imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout any authority. In the present case of the appellant the notice issued by ITO(Intelligence) is on 10.09.20123, therefore without any authority as mandated by the Act. Hence the proceedings itself is void abinitio. 2. By the Finance Act of 1987 (1998 amendment) the word income Tax Officer" was replaced by the "Assessing Officer". The implications of this amendment were: a) Before the 1988 amendment any Income Tax Officer had power u/s. 13(6) to call for information. After the amendment "an Income Tax Officer who is also an Assessing Officer" only has the power u/s. 133(6). The Income Tax Officer(Intelligence) is not an Assessing Officer or Jurisdictional Assessing Officer of the appellant. So the notice issued by the Income Tax Officer(Intelligence) u/s. 133(6) is without power and not valid. 3. A mere approval or permission of the Director of Income Tax to the Income Tax Officer(Intelligence) is not an authorization. As per S.120 there should be a delegation of power on the direction of the CBDT dated 10.12.2014 from the Superior Officer to the Sub-ordinate Officer. The Income Tax Officer(Intelligence) got the delegated power as per the CBDT direction on 10.12.2014. But th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlance and "enquiry under the Act". 6. There was no formation of opinion. Under Section 133(6) 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 the Act only shall be called for. Therefore opinion of anyone of the officers mentioned above on the usefulness or relevance of the information sought for, is a prerequisite to invoke power u/s. 133(6). Such opinion, as observed by Hon'ble Supreme Court in several other contexts cannot be mere whims and fancies of the officer who exercises the power. We most respectfully submit that the notices issued u/s. 133(6) by the Income tax Officer(Intelligence), was not in order in the absence of such formation of opinion. 7. There was no mention of the purpose or usefulness or relevance of the information sought for, expressly or implied, at any sage of the proceedings and therefore the inquiry was against the provision of Section 133(6). As observed by Hon'ble High Court of Bombay in G.M. Breweries Ltd. & Another vs. Union of India & Others on 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013. The Assessee failed to furnish the details called for by the Income Tax Officer. The Income Tax Officer (Intelligence) Alleppey again on 19/05/2014 request the society to furnish the details called for, informing the Society the failure to do so will attract penalty u/s. 272A(2). Even then no reply was filed. The Assessee has challenged the validity of notice u/s. 133(6) issued by the Income Tax Officer(Intelligence), Alleppey, stating that power to call for information u/s. 133(6) is vested with Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or the Commissioner(Appeals) and therefore the Income Tax Officer(Intelligence) is not an authority to invoke provision under the said section. Further argument is the penalty order passed by the Joint Director of Income Tax (Intelligence), Kochi was barred by limitation of time, therefore order is invalid. The legal position of issue of the notice u/s. 133(6) has been discussed by the Apex Court in its judgment in Civil Appeal No. 7460 of 2013 arising out of S.L.P.(C) No. 3976 of 2010 in the case of Kathiroor Service Co-op Bank Ltd. Vs Commissioner of Income Tax (CIB) (copy enclosed). In the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said amendment was brought about as a measure to tackle tax evasion effectively, as clarified by the Central Board of Direct Taxes (CBDT) vide Circular no. 717 dated 14.8.1995 , which reads as follows: "Power to call for information when no proceeding is pending.- . . . 41.2 At present the provisions of sub-section (6) of section 133 empower Income-tax authorities to call for information which is use ful for, or relevant to, any proceeding under the Act which means that these provisions can be invoked only in cases where the proceedings are pending and not otherwise. This acts as a limitation or a restraint on the capability of the Department to tackle evasion effectively. It is, therefore, thought necessary to have the power to gather information which after proper enquiry, will result in initiation of proceedings under the Act. 41.3 With a view to having a clear 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, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 8.3 In the light of the judgment of the Hon'ble Apex Court (supra) and the aforesaid reasoning, I am of the view that the ITO (Intelligence) has jurisdiction to issue notice u/s 133(6) of the I T Act. (ii) the order passed u/s 272A(2)(C) is barred by limitation; 8.4 Section 275(1)(c) of the Act prescribed the time limit for imposition of penalty u/s 272A(2)(c) of the I T Act. Section 275(1)(c ) of the I T Act, reads as follows: "275(1)........................................................... (c ) in any other case after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later." 8.5 Admittedly, penalty proceedings u/s 272A(2)(c) was initiated on 12.8.2014 by issuance of notice u/s 274 of the I T Act and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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