Section 133(6) in The Income Tax Act: A Detailed Guide 

The Income Tax Department has significantly made the required changes in its approach in these years. The department now majorly relies on data analysis tools and artificial intelligence to broaden its taxpayer reach. 

Through Statement of Financial Transactions (SFT) information, they are effectively targeting those who try to avoid taxes. They match the details from our filed Income Tax returns with the information they have existing in their systems. 

In case there is any discrepancy found, then they may issue tax demands within a specific timeframe. However, to ease the approach for the income tax department, section 133 and section 148 of the Income Tax Act 1961 have been given to them. 

The tax department is sending notices to the taxpayers under sections 133(6) & 148 of the Income Tax Act, 1961. These notices are only being sent to those taxpayers who have not filed their tax returns. 

In this article, we have discussed all section 133(6) of the Income Tax Act, 1961.

What is section 133(6)?

Section 133(6) is a provision of the Income Tax Act that gives the power to the assessing officers (AO) with investigative abilities. This section allows the assessing officers to demand the relevant information for proceedings under the Act. 

They can also conduct inquiries & verify cash deposits, especially under initiatives like 'Operation Clean Money'. Assessing authorities can issue income tax notices to collect the general details for inquiry when there are no pending tax liabilities or obligations.

What are the provisions u/s Section 133(6)?

The key features and provisions of Section 133(6) are outlined below:

1. Notice Issuance: Any individual, including the assessee, can receive a notice under Section 133(6).

2. Relevant Information: This section allows authorities to request information on any point, account, or matter that they deem useful or relevant to an inquiry or proceeding under the Income Tax Act.

3. Not Limited to Pending Proceedings: The information can be sought whether or not proceedings are currently underway.

4. Checking Pending Proceedings: The information can be sought to verify both pending and non-pending proceedings.

5. No Time Limit: There is no specific time limit for requesting information.

These provisions offer insights into the scope and operation of Section 133(6) of the Income Tax Act.

Eligibility required under section 133(6)

As per section 133(6), there are eligibility criteria set to be eligible for the power to call. Power to call is only for the following conditions:

Under sections 1 to 5 of section 133, the power to request information can be exercised by the Assessing Officer (AO), Joint Commissioner, or Commissioner.

In section 133(6), the power to request information is extended to the AO, Joint Commissioner, Commissioner, Director, Commissioner and Director General, or Chief Commissioner.

In cases involving the Double Taxation Avoidance Agreement (DTAA) under section 90, the authority to exercise the powers of section 133(6) is limited to those above the rank of Assistant Director or Assistant Commissioner, as specified in section 131(2). This applies regardless of whether there are pending proceedings or involvement of any other income-tax authority.

Calling for Information:

This section grants certain officers the power to request information from:

• Any person as defined under section 2(31) of the Income Tax Act, 1961, including banking officers or relevant officers.
• Individuals who have made term or recurring deposits of Rs. 50,000 or more in cooperative banks, along with their addresses.
• Individuals who are trustees, guardians, or agents, provide information about the people for whom they are trustees, guardians, or agents, along with their addresses.

Type of Information:

The information that can be requested is related to "matters" or specific points. This includes producing verified statements of accounts and affairs by the mentioned authorities in a specific manner.

Terms and Conditions:

• The power to request information can only be exercised after approval from the Director of Investigation or Commissioner of Income Tax.

• The ITD system generates a notice; handwritten notices are not accepted.
• According to section 133(6), the person under verification must reply to the notice online.
• The verification under the 'Operation Clean Money' is done through the Online Verification Portal following the SOP (Standard Operating Procedure).
• If the person under verification doesn't respond within the given time frame regarding cash deposits in their bank accounts, the case will be marked as "Not Acceptable," and further actions will be taken following CBDT's SOP.

Also Read: Taxpayers Alert: SMS From Income Tax Department & How to Respond To

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