TMI Blog2018 (1) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the order imposing penalty cannot be quashed. - Decided in favour of revenue. - I.T.A. No.473 & 544/Coch/2015, ITA 243/Coch/2013, ITA 190/Coch/2016, ITA 126 , 158 , 153 , 146 200 , 198 , 201 , 217 , 194 , 159 , 197 , 196 , 195 , 152 , 204 ,206 , 202/Coch/2017 - - - Dated:- 23-8-2017 - M/s. Elavally Service Co-op Bank Ltd. , M/s. Vallapuzha Service Co-op Bank Ltd., M/s. Orumanayur Service Co-op Bank Ltd., M/s. Athanavad Service Cooperative Bank Limited, M/s. Mullassery Service Cooperative Bank Ltd., M/s. Purathur Service Cooperative Bank Ltd., M/s. Triprangode Service Cooperative Bank Ltd., M/s. Tirunnavaya Service Cooperative Bank Ltd., M/s. Chavakkad Service Cooperative Bank Ltd., M/s.Kurumbathur Service Cooperative Bank Ltd., M/s. Kalpakanchery Service Cooperative Bank Limited, M/s. Edarikode Service Cooperative Bank Ltd., 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of penalty was initiated on 12-08-14, the date of notice issued by the Income Tax Officer (Intelligence), Kochi for the initiation of such proceedings. 6. The Appellant prays that the penalty of ₹ 11,400/- imposed by the Joint Director of Income Tax(Intelligence), Kochi in respect of nonfurnishing of information called for u/s. 133(6) by the Income Tax Officer(Intelligence), Kochi be deleted. 7. The Appellant craves leave to add, amend, alter vary and/or withdraw any or all the above grounds of Appeal. 4. It was submitted by both the sides that the appeal in I.T.A. No. 473/Coch/2015 concerning M/s Kakoor Service Cooperative Bank Ltd., may be taken up for adjudication first and the decision rendered therein would have application in other appeals as well. 5. The facts in relation to I.T.A. No. 473/Coch/2015 are as follows: The assessee is a Primary 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities mentioned in Section 133(6) of the Income Tax Act, 1961. Income Tax Officer (Intelligence) who issued the notices does not belong to any of the authorities mentioned in the said Section. As per the Act specific power is issued the in the section to the officers who are 1) Assessing Officer 2) The Deputy Commissioner (Appeals) 3) The Joint Commissioner or Commisisoner(Appeals) 4) Director General 5) Chief Commissioner and 6) The Director. There are other nomenclature officers similar or above the said authorities but they do not have the power u/s. 133(6). But the Notification NO. 77/2014 [F. NO. 187/37/2014(I.T.A. I)/SO 3125(E), DATED 10-12-2014 of CBDT authorizes the Director (I CI) Kochi to delegate and issue orders in writing to the income-tax authorities subordinate to them for the exercise of such powers and functions mentioned in Section 133(6). This notification dated 10.12.2014 has no retrospective effect and therefore the notices issued by any ITO(Intelligence) before the Notification is without 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Officer(Intelligence) power of an Assessing Officer u/s. 2(7)(A) and cannot be construed as an authorization under Sub section (2) of Section 120. No where the authorization letter is produced. 5. We submit that inquiry and enquiry have different meaning in the Income Tax Act 1961 and refers to different contexts and therefore the information for the purpose of the Act which is useful for or relevant to any enquiry under the Act only shall be called for u/s. 133(6). Here the onus is for the Income Tax Officer to prove that the information called for is for the specific purpose of an inquiry under this Act. The Courts and Authorities which upheld the notices u/s. 133(6) had no occasion to consider this aspect. The present inquiry u/s. 133(6) has no nexus with any enquiry under the Act and therefore is bad in law. Hon ble Supreme Court in Union of India (UOI) and Ors. Vs. Gopal Das Gupta reported in [1987] 167 ITR 39 (SC) has clearly differentiated the scope of enquiry in its ordinary parlance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of notices issued under section 133(6) and we were under bona fide belief that the issue was yet to be resolved. We understand that the dispute is still under consideration of the Division Bench of Hon ble High Court and remains Res Integra. Failure to furnish the information is not intentional as the subject matter is under judicial review. Therefore, the order of penalty u/s. 272(A)(c) is to be kept in abeyance till the decision come from the Hon ble High Court. 11. The information is sought for curbing Money laundering. The question is that whether there is any provision to assess black money under the Act. 7.1 The Ld. DR on the other hand, has also filed written submission which reads as follows:- The Appeal is against the order of the CIT(Appeals)-III, Kochi who confirmed the levy of Penalty u/s.274 r.w.s. 272(2)(c) of the Income Tax Act. The Income Tax Officer (Intelligence), Kochi with permission of the Director of Income Tax (Intelligence) had issued notice u/s. 133(6) to the assessee on 10/09/2013. 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear. The department under the said section has power to call for information in relation to such points or matters which would be useful for, or relevant to any proceeding under the Act, from 'any person' including a 'Banking Company' or 'any Officer' thereon. Later, an amendment was introduced as per the Finance Act, 1995 whereby, the words enquiry or were inserted before the word proceeding in Section 133(6), also adding the '2nd proviso' to the said provision, with effect from 1. 7.1995. The effect of the said amendment is that, the power to call for information under the un-amended Act, which was confined only in relation to a 'pending proceeding' came to be widened, and even in a case where no proceeding was pending, such information could be called for as part of the enquiry, subject to the rider that, such power was not to be exercised by any income tax authority below the rank of Director or Commissioner without the prior approval of the Director or the Commissioner, as the case may be. The said amendment was brought about as a measure to tackle tax evasion effectively, as clarified by the Central Board of Direct Taxes (CBDT) v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to such points or matters which the assessing authority issuing notices requires. This clearly illustrates that the information of general nature can be called for and names and addresses of depositors who hold deposits above a particular sum is certainly permissible. 20. In the instant case, by the impugned notice the assessing authority sought for information in respect of its customers which have cash transactions or deposits of ₹ 1,00,000 or above for a period of three years, without reference to any proceeding or enquiry 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 the 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 133(6) of the Act. Many of the notices issued by the ITO (Intelligence) were never responded to by the assessee. In many instances the Assessing Officer has mentioned that when they had approached, the assessee Society, for seeking information u/s 133(6) of the Act, there was total lack of co-operation on the part of the assessee society as well as threat (reference order imposing penalty u/s 272A(2)(c ) in appeals ITA No.202/C/2017 and ITA NO.217/C/2017). Since there is no reasonable cause furnished by the assessee as mentioned u/s 273B of the I T Act for non furnishing of information sought by the ITO(intelligence) u/s 133(6) of the Act, I am of the view that the order imposing penalty cannot be quashed. It is ordered accordingly. 9 In the result, the appeal in ITA No.473/Coch/2015 is dismissed. 10 Both the parties have agreed that the facts considered by the Tribunal in ITA No 473/C/2015 are identical to the facts of the other appeals. Therefore, for the reasons stated in para 8 to 8.6, the appeals in ITA Nos 243/Coch/2013, 544/Coch/2015, 190/Coch/2016,126/Coch/2017, 158/Coch/2017,153/Coch/2017, 146/C/2017,194/C/2017,159/C/2017, 197/C/2017, 196/C/2017, 195/C/2017, 152/C/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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