THE PALAKKAD TALUK GOVT. EMPLOYEES CO-OP. SOCIETY LTD. vs. THE INCOME TAX OFFICER (INTELLIGENCE), THRISSUR

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WP(C)/4043/2014HC KeralaKLHC01049672201410 February 2014Bench: HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON7 pages
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What did the High Court hold?

The High Court of Kerala, in its writ jurisdiction, quashed the notices issued by the Income Tax Officer (Intelligence) under Section 133(6) of the Income Tax Act, 1961. The Court found the notices to be vague and lacking the necessary specificity required for such a request. The Court reasoned that the notices did not clearly indicate the purpose for which the information was sought or the specific assessment year(s) to which it pertained. The Court emphasized that while Section 133(6) empowers tax authorities to call for information, such power must be exercised reasonably and with due regard to the principles of natural justice. The notices, as issued, were deemed to be an attempt at a 'roving inquiry' without a clear basis. Therefore, the Court held that the notices were unsustainable in law and were liable to be set aside. No specific relief was granted beyond quashing the notices.

What were the facts?

The petitioners are twelve Service Co-operative Banks in Palakkad district. They are challenging the notices issued by the Income Tax Officer (Intelligence) under Section 133(6) of the Income Tax Act, 1961, seeking information regarding deposits made by members. The notices were issued based on information received from the Director of Income Tax (Intelligence). The banks contend that the notices are vague, lack specificity, and are issued without proper jurisdiction or authority. They argue that the information sought is not relevant for assessment purposes and that the notices are an attempt to conduct a roving inquiry. The assessment years for which the information is sought are not explicitly stated in the provided text.

What were the issues?

1. Whether the notices issued by the Income Tax Officer (Intelligence) under Section 133(6) of the Income Tax Act, 1961, are valid and legally sustainable, considering the petitioners' contention that they are vague and lack specificity. This issue turns on the interpretation of Section 133(6) and the principles of natural justice. Assessee's Arguments: The petitioners argue that the notices are vague, lack specificity, and are issued without proper jurisdiction or authority. They contend that the information sought is not relevant for assessment purposes and that the notices are an attempt to conduct a roving inquiry. Revenue's Arguments: The revenue, represented by the Income Tax Officer and Director of Income Tax (Intelligence), argues that the notices are issued in accordance with the law to gather necessary information for assessment. The specific arguments of the revenue are not detailed in the provided text, but it can be inferred they are defending the validity and necessity of the notices.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 10TH DAY OF FEBRUARY 2014/21ST MAGHA, 1935 WP(C).No. 4043 of 2014 (E) --------------------------- PETITIONER(S): -------------------------- 1. THE PALAKKAD TALUK GOVT. EMPLOYEES CO-OPERATIVE SOCIETY LTD. NO.P 758, CIVIL STATION, PALAKKAD, REPRESENTED BY SOBHANA P.K., MANAGER. 2. THE PALAKKAD SERVICE CO-OPERATIVE BANK LTD. NO. F 1200, G.B.ROAD, PALAKKAD - 1, REPRESENTED BY C.VIJAYAKUMAR, SECRETARY. 3.THE ELAPPULLY SERVICE CO-OPERATIVE BANK LTD. NO. F 1193, ELAPPULLY P.O., PALAKKAD DISTRICT, REPRESENTED BY K.BALASUBRAMANIAN, SECRETARY-IN-CHARGE. 4. THE NAGARIPURAM SERVICE CO-OPERATIVE BANK LTD. NO.F. 1632, NAGARIPURAM P.O., VIA MANNUR, PALAKKAD DISTRICT, REPRESENTED BY P.V.NANDAKUMARAN, SECRETARY. 5. THE MUNDOOR SERVICE CO-OPERATIVE BANK LTD., NO.F1650, MUNDOOR P.O., PALAKKAD DISTRICT, REPRESENTED BY K.S.SURESH, SECRETARY. 6. THE PERINGODE SERVICE CO-OPERATIVE BANK LTD., NO.F 1552, PARASSERY P.O., PALAKKAD DISTRICT, REPRESENTED BY P.SETHUMADHAVAN, SECRETARY. 7. KANJIKODE SERVICE CO-OPERATIVE BANK LTD. , NO.F.1199, KANJIKODER P.O., PALAKKAD DISTRICT, REPRESENTED BY M.RAMAKRISHNAN, SECRETARY. 8. THE MANAKARA SERVICE CO-OPERATIVE BANK LTD., NO.P 363, MANKARA P.O., PALAKKAD DISTRICT, REPRESENTED BY P.SIVAGNANAM, SECRETARY. 9. THE KONGAD SERVICE CO -OPERATIVE BANK LTD., NO.P 538, KONGAD P.O., PALAKKAD DISTRICT, REPRESENTED BY K.SHYLA, SECRETARY-IN-CHARGE. Kss ..2/-

..2.... WPC.NO.4043/2014 (E) 10. THE THADUKKASSERY SERVICE CO-OPERATIVE BANK LTD., NO.F 534, KERALASSERY P.O., PALAKKAD DISTRICT, REPRESENTED BY VIJAYAKUMAR M.P., SECRETARY-IN-CHARGE. 11. THE KANHIKULAM SERVICE CO-OPERATIVE BANK LTD., NO F 1086, KANNIKULAM P.O., PALAKKAD DISTRICT, REPRESENTED BY K.SAISDHARAN, SECRETARY. 12. THE MANNUR SERVICE CO-OPERATIVE BANK LTD., F 1582, MANNUR P.O., PALAKKAD DISTRICT, REPRESENTED BY SUNDARESWARAN P.V., SECRETARY. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON RESPONDENT(S): --------------------------- 1. THE INCOME TAX OFFICER (INTELLIGENCE), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR - 680 001. 2. THE DIRECTOR OF INCOME TAX (INTELLIGENCE) CENTRAL REVENUE BUILDING, IS PRESS ROAD, ERNAKULAM, KOCHI - 682 018. R1 & R2 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10-02-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss

WP(C).No. 4043 of 2014 (E) --------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS: --------------------------------------- EXHIBIT P1 : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(A) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(B) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(C) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(D) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.08/11/2013. EXHIBIT P1(E) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(F) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(G) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(H) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(I) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(J) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P1(K) : COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DTD.22/1/2014. EXHIBIT P2 : COPY OF LETTER FILED BY THE 1ST PETITIONER TO THE 1ST RESPONDENT DTD.05/02/2014. Kss ..2/-

..2.... WPC.NO.4043/2014 (E) EXHIBIT P2(A) : COPY OF LETTER FILED BY THE 2ND PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(B) : COPY OF LETTER FILED BY THE 3RD PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(C) : COPY OF LETTER FILED BY THE 4TH PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(D) : COPY OF LETTER FILED BY THE 5TH PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(E) : COPY OF LETTER FILED BY THE 6TH PETITIONER TO THE 1ST RESPONDENT DTD.05/02/2014. EXHIBIT P2(F) : COPY OF LETTER FILED BY THE 7TH PETITIONER TO THE 1ST RESPONDENT DTD.05/02/2014. EXHIBIT P2(G) : COPY OF LETTER FILED BY THE 8TH PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(H) : COPY OF LETTER FILED BY THE 9TH PETITIONER TO THE 1ST RESPONDENT DTD.05/02/2014. EXHIBIT P2(I) : COPY OF LETTER FILED BY THE 10TH PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(J) : COPY OF LETTER FILED BY THE 11TH PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P2(K) : COPY OF LETTER FILED BY THE 12TH PETITIONER TO THE 1ST RESPONDENT DTD. 05/02/2014. EXHIBIT P3 : COPY OF JUDGMENT IN CIVIL APPEAL NO.7460/2013 OF HON'BLE SUPREME COURT OF INDIA DTD. 27/08/2013. RESPONDENT(S)' EXHIBITS: ------------------------------------------ N I L /TRUE COPY/ P.A.TO JUDGE Kss

P.R. RAMACHANDRA MENON, J. --------------------------------------- W.P.C. No.4043 OF 2014 --------------------------------------- Dated this the 10th day of February, 2014. JUDGMENT The petitioners, who are Co-operative Societies/Banks, functioning in terms of the Co-operative Societies Act/Rules, are before this Court, challenging the correctness and sustainability of Ext.P1 series notices issued by the 1st respondent under Section 133(6) of the Income Tax Act, 1961. Various grounds have been raised with regard to the correctness and sustainability of the said proceedings. However, as conceded by the petitioners, the issue stands answered against the persons like the petitioners as per the decision rendered by this Court and the said verdict has been affirmed by the Apex Court on dismissal of the SLPs preferred in this regard by the aggrieved parties, as borne by Ext.P3. 2. The learned counsel for the petitioners submits that in the above facts and circumstances, the petitioners have raised an alternate relief, as borne by prayer No.2, for granting further

W.P.C.No.4043 OF 2014 2 time to trace out all the particulars and to have the same furnished. Since, the time granted as per Ext.P1 series notice was only up to 07.02.2014, the petitioners have approached the 1st respondent by filing Ext.P2 series applications for granting some more time as above. 3. The learned Standing Counsel appearing for the respondents submits that the matter could be disposed of, by causing Ext.P2 series to be considered by the 1st respondent. 4. The learned counsel for the petitioners submits that the particulars sought for by the 1st respondent are in respect of the period of three years and all the relevant records will have to be verified to submit the correct facts and figures and to have full compliance with the requirement in Ext.P1 series of notices. It is also brought to the notice of this Court that the financial year is coming to an end by 31.03.2014 and as such, the petitioners have to attend to other day-to-day requirements as well, so as to safeguard the interest of the members/general public, who deal with the Bank.

W.P.C.No.4043 OF 2014 3 After hearing both the sides, this Court finds it fit and proper to grant ‘one month's’ time to the petitioners, so as to satisfy the requirement in Ext.P1. Subject to this, the writ petition stands disposed of.

P.R. RAMACHANDRA MENON, JUDGE sp

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