Section 133(6) of Income Tax Act: Power to Call for Information Explained

In today’s data-driven tax ecosystem, the Income Tax Department leverages multiple sources of information to ensure accuracy and transparency in tax reporting. Section 133(6) of the Income Tax Act, 1961, is one such powerful tool that enables tax authorities to collect relevant information from various individuals and institutions even if they are not directly subject to tax proceedings.

If you or your business has received a notice under Section 133(6), don’t panic. This article explains what it means, when and why such notices are issued, how to respond, and the consequences of non-compliance.

What is Section 133(6) of the Income Tax Act?

Section 133(6) empowers the Assessing Officer (AO), the Joint Commissioner, the Principal Commissioner, or any other designated authority to call for information or documents from any person, banking company, or institution. This power can be exercised:

• During an ongoing income tax proceeding

• Even in the absence of any proceeding against the individual or entity from whom the information is sought, but with prior approval of a higher tax authority

This provision ensures that the Income Tax Department can collect supporting data to verify the authenticity of transactions reported in income tax returns or reflected in third-party records like bank accounts, mutual funds, property registries, and more.

Why Is a Notice Under Section 133(6) Issued?

The Income Tax Department issues notices under Section 133(6) for various reasons, including:

• To verify large transactions that may not match reported income

• To collect evidence during assessment or reassessment

• To examine bank transactions, high-value cash deposits or withdrawals

• To inquire about third-party involvement in a particular transaction

• To trace unexplained credits or income

• To monitor compliance in cases of suspected tax evasion

Example: A person may receive a notice asking for clarification on a high-value credit entry in their bank account that was flagged during data matching with the AIS (Annual Information Statement).

Who Can Receive a 133(6) Notice?

A notice under Section 133(6) can be issued to:

• Taxpayers (Individuals, Firms, Companies, LLPs, etc.)

• Banks and Financial Institutions

• Mutual Fund Houses

• Registrars and Sub-Registrars of Properties

• Telecom Operators

• Stockbrokers and Depositories

• Credit Card Issuers

• Insurance Companies

In short, even if you are not a direct party to an income tax proceeding, you may still receive a notice for providing relevant data.

Authority to Issue Notice and Approvals Required

The power to issue a 133(6) notice rests with tax officers of various ranks. However, there is a clear distinction in procedure depending on whether proceedings are ongoing or not.

• During Pending Proceedings: The AO can issue a notice on their own.

• No Proceedings Pending: Prior approval from the Commissioner, Principal Commissioner, or higher authority is mandatory.

This distinction helps prevent misuse of power and ensures checks and balances in the system.

What Information Can Be Demanded?

The information requested under Section 133(6) varies from case to case. Some common examples include:

• Bank account statements

• Fixed deposit details

• Investment records (stocks, mutual funds, etc.)

• Property purchase or sale documents

• Rent agreements

• Salary or employment details

• Insurance premium records

• Loan sanction and repayment documents

• Transaction details with a business entity

The notice usually specifies a timeframe within which the documents or information must be submitted.

How to Respond to a Notice Under Section 133(6)?

Here’s a step-by-step approach to handle a Section 133(6) notice:

1. Read the Notice Carefully
   Understand what information is requested and the due date for submission.

2. Collect Required Documents
   Ensure that the data you are submitting is accurate, complete, and consistent with your tax filings.

3. Respond via the Income Tax E-Filing Portal

   • Log in to https://www.incometax.gov.in/

   • Go to “e-Proceedings”

   • Choose the correct notice reference and upload your response

4. Keep Acknowledgment
   Maintain a digital and physical copy of your submission for future reference.

5. Seek Expert Help
   If the notice involves large or complex financial transactions, it’s advisable to consult a Chartered Accountant or legal expert.

Consequences of Non-Compliance

Ignoring or delaying a response to a notice under Section 133(6) may result in:

• Penalties for failure to furnish information

• Initiation of assessment or reassessment proceedings

• Issue of summons under Section 131

• Legal consequences under Section 272A(2)(c) with a penalty of Rs. 100 per day of default

The department may also assume adverse inference if the information is not provided, which can affect your tax liability.

Legal Backing & Judicial Stand

Indian courts have generally upheld the constitutionality and applicability of Section 133(6), provided that:

• The information sought is relevant

• The officer has jurisdiction

• Prior approvals (where required) are obtained

In the landmark case of Kathiroor Service Co-operative Bank Ltd. v. CIT (2013), the Supreme Court ruled that banks are obliged to furnish information under Section 133(6) even when no proceedings are pending, as long as proper approval is obtained.

FAQs on Section 133(6) of Income Tax Act

1. Is Section 133(6) applicable to non-taxpayers too?
   Yes, it can apply to non-taxpayers like banks, companies, and individuals who are not part of any tax proceedings.

2. Can I ignore the notice if I have already filed my return?
   No. Filing a return does not exempt you from providing additional information when requested.

3. What if the information requested is not available?
   You should respond with a proper explanation and evidence of why the data is unavailable.

4. Can the officer conduct a survey under Section 133(6)?
   No. This section only allows for calling of information, not survey or search operations.

5. Can a notice be served via email or SMS?
   Yes, under the faceless assessment regime, digital communications are valid.

6. What is the penalty for not responding to a 133(6) notice?
   A penalty of Rs. 100 per day of delay under Section 272A(2)(c) can be levied.

7. Can I seek an extension of time to respond?
   Yes, you may request an extension, but approval is at the discretion of the officer.

8. Is legal representation allowed while replying?
   Yes, you can have a CA or legal professional submit your reply on your behalf.

9. How long does the department take to act after submission?
   There’s no fixed timeline; it depends on the case’s complexity and department’s workflow.

10. Can I challenge the notice?
    Generally, these notices are investigatory and not appealable. However, misuse of power can be challenged via writ petitions in rare cases.

Need Help Replying to an Income Tax Notice?

At Tradeviser, we assist taxpayers in handling income tax notices professionally—from drafting replies to representation before the department. Don’t risk a penalty due to a missed or mishandled notice.

Talk to our experts today and respond to your tax notice with confidence.