I-T- Fishing and Roving Enquiry - Permissible?
THE Supreme Court recently delivered a very important judgement on the ITO's power to conduct roving enquiries.
Assessee is a Co-operative Rural Bank. The Income Tax Officer (ITO)(CIB), Calicut issued a notice to the assessee u/s 133(6) calling for general information regarding details of all persons (whether resident or non- resident) who have made (a) cash transactions (remittance, transfer, etc.) of Rs. 1,00,000/- and above in any account and/or (b) time deposits (FDs, RDs, TDs, etc.) of Rs. 1,00,000/- or above for the period of three years between 01.04.2005 and 31.03.2008, dated 02.02.2009. It was expressly stated that the failure to furnish the aforesaid information would attract penal consequences. The assessee objected to the said notice on grounds that such a notice seeking information which was unrelated to any existing or pending proceeding against the assessee could not be issued under the provisions of the Act and requested for withdrawal of the said notice by its letter-in-reply, dated 26.02.2009.
The AO rejected the objections and the case reached the Supreme Court.
THE issues before the Supreme Court are - Whether provisions of Sec 133(6) vest powers in Assessing Officers to indulge in fishing information of general nature and there is no need for assessee to cooperate only if there is any assessment proceeding pending; Whether power to gather information u/s 133(6) applies to specific areas only; Whether issue of notice for collecting information u/s 133(6), without the approval of Commissioner is valid and Whether enquiry of general nature can also be made by issuing such a notice.
And the verdict favours the Revenue.
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