Section 133(6) of the Income Tax Act authorizes the Income Tax Department to request information or documents from individuals or entities regarding their financial transactions. This provision empowers the department to issue notices requiring the submission of records relevant to a taxpayer’s income or financial dealings. It plays a vital role in tax inquiries, assessments, and verification processes.
This section allows the department to:
Scrutinize financial transactions,
Verify declared income,
Ensure accuracy and compliance in taxation,
And conduct investigations even when no active proceedings are pending—subject to approval from higher authorities.
Key Stakeholders:
Income Tax Department: Exercises authority to issue notices and initiate inquiries.
Taxpayers or Third Parties: Required to furnish the requested information or documentation.
By leveraging Section 133(6), the department strengthens transparency in tax administration and ensures adherence to tax laws. It serves as a critical mechanism for gathering data that supports enforcement and assessment efforts, thus safeguarding the integrity of the taxation system.
Provisions Under Section 133(6) of the Income Tax Act
Section 133(6) empowers specified income tax authorities to issue notices to any person, including the assessee, to obtain information or documents deemed relevant to any inquiry or proceeding under the Income Tax Act.
Key Provisions:
Scope of Information: Authorities can request information or records on any matter they consider relevant or useful to an inquiry, assessment, or investigation.
No Need for Pending Proceedings: Information can be sought even if no formal proceedings are currently pending against the person concerned.
Broad Applicability: This provision applies not only in cases where proceedings are active but also to assess whether proceedings should be initiated.
No Time Restriction: There is no specific time limit prescribed for requesting such information under this section.
Common Reasons for Receiving a Notice Under Section 133(6):
Non-filing of income tax returns
Mismatch between declared income and financial transactions
Inconsistencies in data shared with tax authorities
Suspected tax evasion or concealment of income
Incomplete or missing details in filed tax returns
Such notices often serve as a preliminary step to assess compliance and verify financial details before initiating further action or proceedings
Steps to Take After Receiving a Section 133(6) Notice
Review the Notice Carefully
Understand the specific information or documents requested by the Income Tax Department.Gather Relevant Financial Records
Collect all necessary documents such as bank statements, tax returns, investment proofs, and other supporting financial data.Consult a Tax Professional
Seek advice from a qualified chartered accountant or tax lawyer to ensure an accurate and compliant response.Comply Within the Deadline
Ensure that all requested information is submitted within the time frame mentioned in the notice to avoid penalties.Submit Accurate and Complete Information
Double-check that all details provided are correct, up to date, and complete to prevent further scrutiny.Maintain Transparency
Respond honestly and be prepared to answer follow-up questions or provide additional documentation if needed.Keep Proper Records
Retain copies of the notice, submitted documents, and any correspondence with the tax department for future reference
Types of Information to Be Submitted Under the Income Tax Act
Under the Income Tax Act, individuals and entities may be required to submit a wide range of information, including:
Personal details: Name, address, Permanent Account Number (PAN), and contact information.
Financial data: Income from various sources (salary, business, capital gains, etc.), investments, assets and liabilities, and previous tax filings.
Business-related information: Details about business operations, ownership structures, partnerships, and significant financial transactions.
Supporting documentation: Bank statements, invoices, contracts, investment proofs, and other documents substantiating the declared information.
All data must be accurate, complete, and submitted within the specified deadline, ensuring full compliance and transparency as per the Act’s requirements.
Terms and Conditions Under Section 133(6) of the Income Tax Act
Authorized Issuance: Notices can only be issued by tax authorities empowered under the Act.
Purpose-Specific Inquiry: Information is sought for the purpose of assessment, verification, or scrutiny.
Reasonable Grounds: Issuance is based on legitimate concerns regarding compliance or discrepancies.
Mandatory Timeline: Taxpayers are obligated to respond within the specified period mentioned in the notice.
Consequences of Non-Compliance: Failure to respond may result in penalties or further legal action.
Confidentiality Assurance: Information provided is handled confidentially by the authorities.
Legal Boundaries: Authorities must operate strictly within the framework of the law when exercising powers under this section.
Frequently Asked Questions (FAQs)
1. What happens if there is a failure to comply with Section 133(6) of the Income Tax Act?
Failure to comply with the notice under Section 133(6) means not providing the requested financial information. This can lead to penalties or other legal actions for non-compliance.
2. How should I respond to a Section 133(6) notice?
You should respond promptly, ensuring that you provide accurate and complete financial details as requested. It’s advisable to seek professional guidance, such as from a tax expert or lawyer, if necessary, to ensure full compliance within the given timeframe.
3. What is Rule 133 of the Income Tax Rules?
Rule 133 outlines the procedures and format for issuing notices under Section 133(6) of the Income Tax Act. It specifies the type of information that must be provided and the guidelines for complying with the notice.
4. Is there any exemption under Section 133 of the Income Tax Act?
Section 133(6) does not provide any specific exemptions. All relevant individuals and entities must comply with the requirements when a notice is issued.
5. What is Section 133 of the Civil Procedure Code?
Section 133 of the Civil Procedure Code pertains to the powers of courts to conduct inquiries and investigations in the interest of justice. It is unrelated to Section 133(6) of the Income Tax Act.
6. What is the statement of jurisdiction under Article 133?
Article 133 refers to the jurisdiction of the Supreme Court of India, granting it authority to hear appeals that involve significant legal questions of general importance.
7. What is Section 133 related to the prevention of encroachment?
This section addresses the prevention and removal of encroachments on public or government land and is unrelated to the provisions of Section 133(6) of the Income Tax Act.
