TMI Blog1993 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... igned by the cardholders. On the basis of such charge slips, the petitioner prepares a statement of account every month in respect of each of the cardholders and forwards the same to the cardholders. If the payment is received, it is credited to the account of the cardholders. Otherwise, the amount is carried forward to the next month. The entire operation of the collection system has been computerised. The petitioner collects its commission from the establishment members. The ledgers which are maintained in respect of cardholders are termed as "open item ledgers". A new ledger is prepared at the end of every month in respect of the account of a cardholder, e.g., after the debit of purchases made by a cardholder is squared off by payment in the next month, this amount will not appear in the ledger of the following month. In case the petitioner wants to collect details of the amounts paid to it by individual cardholders during the year, it will have to collect the information from general ledgers used during the year for that cardholder. The total number of accounts handled every month varies from 40,000 to 50,000. In January, 1984, an inspector from the Income-tax Department vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961. Chapter XIII deals with income-tax authorities. Part A of Chapter XIII deals with appointment and control of income-tax authorities. Part B deals with their jurisdiction and Part C deals with their powers. We are concerned with Part C. It starts with section 131 and ends at section 136. Section 131 provides that officers mentioned therein shall, for the purpose of the Income-tax Act, have the same powers regarding discovery, production of evidence, etc., as are vested in a court under the Code of Civil Procedure when trying a suit in respect of matters set out in that section. These powers can be exercised in respect of a pending proceeding before the income-tax authorities. Sub-section (1A) of section 131 permits the officers mentioned therein to exercise the powers conferred under section 131(1) notwithstanding that no proceedings with respect to such person or class of persons are pending before them or any other income-tax authority. Section 132 deals with search and seizure. Section 132A deals with requisition of books of account, etc. Section 132B deals with application of retained assets. Section 133 deals with power to call for information. Section 133A deals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of any hypothetical proceedings in future which may or may not take place. In the present case, for instance, the respondents accept the position that after obtaining the information which they have sought from the petitioner, they will decide whether a proceeding should or should not be instituted in respect of any one or more of such persons whose names and addresses are furnished by the petitioners. Therefore, in the present case, against several thousand members of the petitioners whose names and addresses are so required to be furnished, the respondents are not even contemplating any proceedings. The decision whether to initiate proceedings or not is yet to be taken and that too on the basis of information which will be supplied by the petitioner. This kind of power to seek "fishing" information which is unrelated to any proceedings or which may enable the respondents to decide whether to institute proceedings or not, is not contemplated under section 133(6). A proceeding under the Act, by its very nature, must be specified and it must relate to a specific individual or entity or a class of individuals under the income-tax Act. It is also necessary to note that under Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Dwijendra Lal Brahmachari v. New Central jute Mills Co. Ltd. [1978] 112 ITR 568, in support of his conclusion, which are relevant. These are to the effect that all statutory bodies must act for the purposes of the statute. Secondly, a statutory power cannot be exercised without application of mind to the question of relevancy of the documents to the lis involved in the matter before the Income-tax Officer. The power can be exercised provided the officer is satisfied that the order made is relevant for the purpose of deciding the case pending before him. That power cannot be exercised in a naked or arbitrary manner. Therefore, information under section 131(1) cannot be asked for in order to decide whether any proceeding should be initiated in future. The same reasoning would apply with greater force to the present case also. In fact, under section 133(6) which is before us, unlike section 131(1), there is an express reference to the relevance of the information sought to a proceeding under this Act. The power under section 133(6) has, therefore, to be exercised with reference to a proceeding which is in existence. This power cannot be exercised to gather information on the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding is included in the term "proceeding". The question whether this definition can at all apply to section 133(6) was not raised and hence not considered by the Full Bench. Hence, the decision of the Punjab and Haryana High Court is not of any assistance to us. It is pointed out by Mr. Dastur, learned counsel for the petitioners, that the observations of the Full Bench to the effect that the Income-tax Officer had been quite fair in not launching proceedings under section 147 of the Act straightaway and had decided to first ascertain the value of the mill with the assistance of the company in order to decide whether, on the basis of the information supplied by the company, there was any need for reopening the assessment, run counter to the observations of our High Court in the case of jamnadas Madhavji and Co. [1986] 162 ITR 331, where the court has stated that information cannot be sought for in order to decide whether an assessment should be reopened or not. The Income-tax Officer must arrive at his own satisfaction as to whether the assessment requires to be reopened or not on the basis of information in his possession. Be that as it may, we are not concerned with this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the assessee did not comply with the requirements of the notice under section 133(4), they could be penalised. Non-supply of information cannot be a ground for not granting them a deduction if the facts otherwise showed that such amounts had, in fact, been paid. Once again the court refused to interfere with the findings of the Tribunal. In both cases the information was asked for in pending assessment proceedings. We do not see how these judgments can help the respondents. In the premises, in our view, in the present case, the requirements of section 133(6) are not satisfied as the respondents have asked the petitioners to furnish general information unrelated to any existing proceeding. It is also submitted by the respondents that the persons who have paid Rs. 5,000 or Rs. 20,000 or more to the petitioners constitute a class of persons in respect of whom information can be asked for under section 133(6). But whether these persons constitute a class of persons has to be determined with reference to the Income-tax Act. Clearly, each of these persons is or would be an assessee by himself. Simply because each of them holds a credit card of the petitioners, such persons do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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