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2025 Supreme(Online)(Ker) 29995
IN THE HIGH COURT OF KERALA AT ERNAKULAM
,
The petitioner – Appellant
Versus
Income Tax Officer (TDS) – Respondent
Writ Petition
For the Appellants/Petitioners: Sri. Arun Raj S.
For the Respondents: Sri. Christopher Abraham
The court emphasized that tax compliance is mandatory under Section 133(6) and that the absence of ongoing proceedings does not invalidate notices with prior approval, affirming roles and responsibilities in assessing tax obligations.
Headnote:(A) Income Tax Act, 1961 - Sections 133(6), 194A(3)(viia), 272A(2)(c) - Jurisdiction of Income Tax Officer to issue notice for information - The petitioner contended the notice was illegal due to lack of jurisdiction. The court held that the issuance was valid with prior approval, emphasizing the importance of compliance in tax assessments. (Paras 1, 5, 11, 12, 14, 17)
(B) Penalty for non-compliance - The petitioner, a Primary Agricultural Credit Society, argued exemption from TDS. The court rejected this arguing that compliance with notices under Section 133(6) was mandatory for proper tax assessment, and penalties could be imposed for non-compliance. (Paras 4, 14, 16, 17)
Facts of the case:
The petitioner received a notice for information required as per Section 133(6) of the Income Tax Act, which was challenged on grounds of lack of jurisdiction and exemption from TDS. After failure to comply, a penalty of Rs.20,200/- was imposed.
Findings of Court:
The court affirmed the validity of the issued notice with prior approval and concluded that the petitioner was required to furnish requested information, emphasizing the integrative function of tax laws regarding compliance.
Issues: The main issues were about the jurisdiction of the Income Tax Officer under Section 133(6) and the applicability of TDS exemptions under Section 194A(3)(viia).
Ratio Decidendi: The court ruled that prior approval legitimized the Section 133(6) notice and that compliance is essential for tax assessment, maintaining that exemptions do not preclude obligations under the Act.
Result: Writ petition dismissed.
| Table of Content |
|---|
| 1. petitioner registered under kerala co-operative societies act. (Para 1) |
| 2. petitioner contends lack of jurisdiction for ext.p1 notice. (Para 2 , 4) |
| 3. penalty of rs.20,200 imposed for non-compliance. (Para 3) |
| 4. jurisdictional requirements under section 133(6) discussed. (Para 5 , 12 , 13 , 16) |
| 5. respondents argue validity of actions taken under statute. (Para 6 , 7 , 8) |
| 6. section 133(6) powers and conditions clarified. (Para 9) |
| 7. exemption claims under section 194a(3)(viia) analyzed. (Para 14 , 15) |
| 8. writ petition dismissed; penalty upheld. (Para 17) |
JUDGMENT
The petitioner, a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969 , is an assessee under the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short). The Income Tax Officer (TDS), the 1st respondent, issued Ext.P1 notice dated 8.1.2016 under Section 133 (6) of the Act, seeking information pertaining to AY 2015-16 regarding TDS/TCS compliance. The petitioner submitted objections on 21.01.2016, but the 1st respondent insisted on furnishing details through a letter dated 04.03.2016. The petitioner sought additional time to prepare and submit the statements.
2. The petitioner contends that the 1st respondent lacked jurisdiction to issue Ext.P1, as the 1st respondent is not the Assessing Officer. The Manual of Office Procedure clarifies that only the Assessing Officer, Additional/Joint Commissioner, or Commissioner (Appeals) can call for information under Section 133 (6) of the Act. Despite this, the 2nd respondent, the Joint Commissioner of Income Tax (TDS), issued Ext.P6 notice, dated 21.03.2016, under Section 274 r/w Section 272A (2)(c), proposing a penalty for failure to furnish information. The petitioner objected on 28.03.2016, but the 2nd respondent directed compliance by 25.07.2016, threatening the imposition of penalty.
3. The petitioner submitted the required details on 5.08.2016 (Ext.P9) and requested the dropping of proceedings (Ext.P10). However, the 2nd respondent imposed a penalty of Rs.20,200/- on 17.08.2016 (Exhibit P-11). The petitioner filed a waiver petition under Section 273A (4) before the Commissioner of Income Tax, Kottayam, which was transferred to the 3rd respondent. Through Ext.P13 order dated 8.1.2018 the 3rd respondent dismissed the waiver petition. Ext. P13 is under challenge in this writ petition.
4. Sri. Arun Raj S., the learned counsel for the petitioner argues that the 1st respondent lacked jurisdiction under Section 133 (6), rendering the notice illegal. The 2nd respondent erred in imposing the penalty, as the petitioner had furnished the required details. Additionally, the petitioner, being a Primary Agricultural Credit Society, is exempted from TDS under Section 194A (3)(viia), making the penalty unwarranted. The 2nd respondent’s reliance on the failure to furnish details under Sections 192 to 195 is unjustified.
5. The issuance of a notice under Section 133 (6) of the Act requires prior approval from the Director or Commissioner, which was obtained in this case, making the notice valid. However, the formation of an opinion by the relevant officer on the usefulness or relevance of the information is mandatory. An “enquiry” under the Act is a prerequisite for invoking (6), and the second proviso mandates prior approval for inquiries without pending proceedings. The existence of an enquiry and prior approval is essential to invoke (6) in cases without pending proceedings.
6. The learned counsel for the petitioner relied on the decisions in the Union of India (UOI) and Ors. v. Gopal Das Gupta reported in[(1987) 167 ITR 39 (SC)], G.M Breweries Ltd. & Another v. Union of India and Others (2000 (2) Bom CR 160) andKathiroor Service Co-operative Bank Ltd v. Commissioner of Income Tax (CIB) (MANU/SC/1172/2013).
7. Sri. Christopher Abraham, the learned Standing Counsel for the respondents contends that notice under Section 133 (6) was issued by the 1st responden
