ORDER
Tirath Singh Takur, J.
The petitioners are banking companies carrying on their business in the State of Karnataka. They have in these petitions called in question the validity of notices issued by the concerned Income Tax Officers demanding information in regard to “Term deposits” of Rs. 50,000 and above. The information called for is to the following extent :
(a) Name and full address of the “Term deposit” (in case of minors, guardians name be given) ;
(2) Amount deposited with the date and mode (i.e., by cash or by cheque) of deposit ;
(3) nature of deposit/rate of interest
(4) Period of deposit.
The notices specifically record that the information being called for is in terms of section 133(6) of the Income Tax Act, 1961, with the prior approval of the Director of Income Tax (Investigation), Bangalore. The validity of a similar notice was challenged in Controllerate of Quality Assurance Electronics (Coal) Campus Employees Credit Co-operative Society Ltd. v. ITO (W.P. No. 38360/1999). That was also a case where information had been summoned by the Income Tax Officer in terms of section 133(6) in regard to deposits made with the petitioner-company. The notices were assailed on the ground :
(a) that the petitioner is not a ‘person’ or ‘banking company’ and therefore, it cannot be required to furnish the information ;
(b) that before seeking information the authorised officer, who issues the notice, should record his opinion that the information will be useful for or relevant to any enquiry or proceedings under the Act. Recording of such opinion has not been referred or stated in the notice :
(c) that the power under section 133(6) cannot be used to make a sweeping or roving enquiry, by calling for information in regard to all deposit-holders. The power under the section can only be used to call for information relating to the person’ that is in this case about the finance of the petitioner and not in respect of the depositors or (sic).
All these contentions were repelled by Raveendran J, by his judgment dated 3-11-1999. The court held that section 133(6) of the Act, specifically empowered the assessing officer or any other officer referred to in the said section to require any person to furnish information relating to such points or matters or to furnish a statement of accounts or affairs which may be useful or relevant for any enquiry under the Act. The provision declared the court was wide enough to empower the assessing officer to call for information in regard to deposits made with the petitioner. The decision of the Bombay High Court relied upon by the petitioner in DBS Financial Services v. Smt. M. George (1994) 207 ITR 1077 (Bom) was distinguished, as one interpreting section 133(6) before its amendment with effect from 1-7-1995. The court held that since the provision had been amended, enabling the specified officer to require information useful for or relevant any proceedings pending before him for any enquiry that may be initiated under the Act, information sought could be general information also. Reliance in support was placed upon an earlier decision of this court in South Canara District Central Co-operative Bank Ltd. v. ITO (W.P. No. 37905 of 1998) [(2000) 158 CTR (Karn) 181-Ed.]. That was a case where the court had in a petition challenging a similar notice held that the word “enquiry” used in section 133(6) had a different connotation distinct from the term “proceedings.” An enquiry could be during the pendency of a proceeding or even prior to any such proceedings. The challenge to the notice was accordingly repelled. Writ Appeal No. 8,443/1999 filed against that decision was dismissed by a Division Bench of this court by its order dated 7-12-1999.
2. The challenge to the validity of the notices in the present batch of cases is no different. It was argued that the demand for information by the officers concerned was tantamount to making a moving enquiry in the proceedings before it. It was also contended that the information sought by the respondent was already available with them in one from or the other and that any further information without disclosing the basis on which the same was being demanded need not be furnished. The decision of this court referred to earlier in my opinion squarely covers both these aspects. Section 133(6) is wide enough to empower the officer concerned to call for information even when no proceedings are actually before him. Any such information may be relevant for initiating proceedings against such of the depositors as may have made deposits with the bank but not disclosed the same to the income-tax authorities. The fact that any such information as and when provided by the petitioners can constitute the basis for an appropriate proceeding under the Act, cannot therefore be disputed. Indeed, the process of verification of deposits has been justified by the respondents on the ground that such deposits may represent amounts that are undisclosed for purposes of income-tax. Even the Reserve Bank of India appears to have examined the question whether the information available with a banker can be disclosed and the circumstances in which that can be done. A letter dated 16-5-1998 addressed by the Reserve Bank of India to all primary co-op banks a copy whereof has been produced by learned counsel for petitioners in the course of the hearing, clearly shows, that the obligation of the bank to maintain secrecy in banking transactions is subject to the exceptions enumerated in the said letter. One of the said exceptions is whether the disclosure is under the compulsion of law. In the instant case, as seen earlier, the provisions of section 133(6), empowers the authorities/officer to demand information from any person or banking companies like the petitioners. The power to demand necessarily carries with it an obligation for the banking company concerned to obey any direction issued in exercise of the same. The disclosures if any made by the bank would, therefore, be disclosure under obligation of law and would not violate the obligation which the banks otherwise have to (sicfollow).
3. It was lastly contended by the learned counsel for the parties that the power to direct furnishing of information could be exercised only with the prior approval of the Director or the Commissioner as the case may be. He urged that although the notices referred to the approval of the Director of Income Tax (Investigation), they did not go further to indicate whether the approval was for any specific or general information. This was according to the learned counsel necessary for the power to grant approval in terms of second proviso to section 133(6) of the Income Tax Act, could not be exercised mechanically or in a manner that would defeat the very purpose underlying grant of such approval. There is in my opinion no merit even in that submission.
4. It is not in dispute that the Director of Income Tax (Investigation) has granted approval. What is argued is that the approval may not have permitted calling for general information as is sought to be demanded by the officers concerned. The notices demanding information, however, specifically state that the approval of the Director of Income Tax, is granted to the demand of information on the points set out in the notices. There is, therefore, no scope for any equivocation in this regard. The approval granted is and must be deemed to be in regard to the information on the points that have been enumerated regardless whether the same constitutes specific or general information. What is important is that the demand for information has the approval of the Director in terms of section 133(6). So long as that is so, the requirement of law is satisfied. In the result these writ petitions must fail and are hereby dismissed but in the circumstances without any orders as to costs.
OPEN