The officer wrote to my bank for my account before any return or proceeding existed, and reopened on what came back. Was he allowed to?
Not without the approval required by the second proviso. The Tribunal found that no proceeding was pending when the enquiry letter went out, that nothing on record showed the prior approval of the Director or Commissioner had been taken, and that the letter itself made no mention of any approval. Exercising the power in that state of affairs was held to be an illegal exercise of power, and the reassessment built on it was cancelled.
Decided by the ITAT (A.D. Jain, Judicial Member) on 2016-05-11, reported as ITA No. 630(Asr)/2015, assessment year 2006-07. It bears on section 133(6), section 147, section 148, section 133 of the Income Tax Act 1961, in Reassessment & Reopening and Evidence & Burden of Proof matters.
This is the decision that gives the proviso teeth. It converts the approval from a departmental formality into something the assessee can put in issue, and it is the authority other Benches have followed when quashing reassessments founded on pre-proceeding enquiries.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee had not filed a return of income. On 13 March 2008 the Income-tax Officer issued an enquiry letter calling for information, and the reassessment for assessment year 2006-07 was subsequently initiated on the footing of bank deposits. The assessee contended before the Tribunal that no proceeding of any kind was pending when the enquiry letter was issued, that the officer was below the rank at which the power may be exercised without approval, and that the prior approval required by the second proviso to s.133(6) had never been obtained.
The appeal was partly allowed (para 52), Ground No.1 not having been pressed. The Tribunal recorded that, the assessee not having filed any return, no proceeding whatsoever was pending before the authority at the relevant time (para 27). It held that an income-tax authority below the rank of Director or Commissioner can exercise the power in respect of an enquiry only with the prior approval of the Director or the Commissioner (para 17), that there was nothing on record to suggest any such approval was obtained and the letter itself made no mention of one, so that the power exercised without compliance with the second proviso amounted to an illegal exercise of power (para 19). The reasons recorded to initiate proceedings under s.147 and all proceedings pursuant to them, culminating in the impugned order, were cancelled and Ground No.2 was accepted (para 50); none of the remaining grounds survived for adjudication and Ground No.1 had not been pressed (para 51), so the appeal was partly allowed (para 52).
The Tribunal treated the second proviso as a condition on the exercise of the power rather than as an internal administrative step. Because the assessee had filed no return, the case fell squarely within the words 'in a case where no proceeding is pending', and the rank of the officer brought the approval requirement into play. Approval not being shown on the record, and the letter not reciting one, the enquiry was an exercise of power outside the section. The Tribunal then carried that conclusion into the reassessment: the material on which the reasons were recorded having been gathered by an unlawful exercise of power, and the reasons themselves disclosing no rational nexus between bank deposits and escaped income, the jurisdiction to reassess was not validly assumed.
without compliance with the second proviso to section 133(6), would tantamount to an illegal exercise of power
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Handle my notice → Ask a CA on WhatsAppNot without the approval required by the second proviso. The Tribunal found that no proceeding was pending when the enquiry letter went out, that nothing on record showed the prior approval of the Director or Commissioner had been taken, and that the letter itself made no mention of any approval. Exercising the power in that state of affairs was held to be an illegal exercise of power, and the reassessment built on it was cancelled. This was decided by the ITAT (A.D. Jain, Judicial Member) and bears on section 133(6), section 147, section 148, section 133 of the Income Tax Act 1961. It is reported as ITA No. 630(Asr)/2015, assessment year 2006-07. This is the decision that gives the proviso teeth. It converts the approval from a departmental formality into something the assessee can put in issue, and it is the authority other Benches have followed when quashing reassessments founded on pre-proceeding enquiries. If it applies to you, the first step is this: Establish first that nothing was pending when the enquiry letter went out - no return filed, no notice issued.
The assessee had not filed a return of income. On 13 March 2008 the Income-tax Officer issued an enquiry letter calling for information, and the reassessment for assessment year 2006-07 was subsequently initiated on the footing of bank deposits. The assessee contended before the Tribunal that no proceeding of any kind was pending when the enquiry letter was issued, that the officer was below the rank at which the power may be exercised without approval, and that the prior approval required by the second proviso to s.133(6) had never been obtained. The matter was decided on 2016-05-11 by the ITAT (A.D. Jain, Judicial Member). On those facts the ITAT held as follows. The appeal was partly allowed (para 52), Ground No.1 not having been pressed. The Tribunal recorded that, the assessee not having filed any return, no proceeding whatsoever was pending before the authority at the relevant time (para 27). It held that an income-tax authority below the rank of Director or Commissioner can exercise the power in respect of an enquiry only with the prior approval of the Director or the Commissioner (para 17), that there was nothing on record to suggest any such approval was obtained and the letter itself made no mention of one, so that the power exercised without compliance with the second proviso amounted to an illegal exercise of power (para 19). The reasons recorded to initiate proceedings under s.147 and all proceedings pursuant to them, culminating in the impugned order, were cancelled and Ground No.2 was accepted (para 50); none of the remaining grounds survived for adjudication and Ground No.1 had not been pressed (para 51), so the appeal was partly allowed (para 52).
The Tribunal treated the second proviso as a condition on the exercise of the power rather than as an internal administrative step. Because the assessee had filed no return, the case fell squarely within the words 'in a case where no proceeding is pending', and the rank of the officer brought the approval requirement into play. Approval not being shown on the record, and the letter not reciting one, the enquiry was an exercise of power outside the section. The Tribunal then carried that conclusion into the reassessment: the material on which the reasons were recorded having been gathered by an unlawful exercise of power, and the reasons themselves disclosing no rational nexus between bank deposits and escaped income, the jurisdiction to reassess was not validly assumed. In the words reproduced by the source cited on this page: "without compliance with the second proviso to section 133(6), would tantamount to an illegal exercise of power" The decision followed or applied Karnataka Bank Ltd v Secretary, Govt. of India, 255 ITR 508 (SC) - relied on for the construction of s.133(6) and the proviso; ITO v Lakhmani Mewal Das, 103 ITR 437 (SC) - applied on the nexus required in the reasons recorded; Bir Bahadur Singh Sijwali v ITO, 53 taxmann.com 366 (Delhi Trib.) - relied on; Jamnadas Madhavji & Co. v J.B. Panchal, 162 ITR 331 (Bom) - relied on.
It was decided by the ITAT on 2016-05-11 and is reported as ITA No. 630(Asr)/2015, assessment year 2006-07. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 133(6), section 147, section 148, section 133, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was partly allowed (para 52), Ground No.1 not having been pressed. The Tribunal recorded that, the assessee not having filed any return, no proceeding whatsoever was pending before the authority at the relevant time (para 27). It held that an income-tax authority below the rank of Director or Commissioner can exercise the power in respect of an enquiry only with the prior approval of the Director or the Commissioner (para 17), that there was nothing on record to suggest any such approval was obtained and the letter itself made no mention of one, so that the power exercised without compliance with the second proviso amounted to an illegal exercise of power (para 19). The reasons recorded to initiate proceedings under s.147 and all proceedings pursuant to them, culminating in the impugned order, were cancelled and Ground No.2 was accepted (para 50); none of the remaining grounds survived for adjudication and Ground No.1 had not been pressed (para 51), so the appeal was partly allowed (para 52). It arises in Reassessment & Reopening and Evidence & Burden of Proof matters, on section 133(6), section 147, section 148, section 133 of the Income Tax Act 1961, and was decided by A.D. Jain, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask for the approval under the second proviso by name in your s.148A reply or before the Tribunal, and put the department to proof; the burden of showing it exists is on the department. Read the enquiry letter: if it does not itself recite an approval, say so on the record, as the Tribunal did here. Run the point together with the quality of the reasons recorded; here the two grounds were taken together and the whole reassessment fell.
Still good law. Followed by the Delhi Bench in Harmeet Singh v ITO, decided 10 February 2017, which reproduced these paragraphs and decided the legal issue as squarely covered by them, and by the Agra Bench in Pushpa v ITO, decided 22 March 2019, which quashed the assessments as void ab initio on the same reasoning. No decision doubting or overruling it was found, and no High Court decision either way on the consequence of a missing approval was located. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The paragraph numbering in this order runs to para 52: the passages relied on are at paras 17, 19 and 27, the operative direction is at para 50, and the disposal is at para 52. The Tribunal cites Karnataka Bank Ltd as reported at 255 ITR 508 (SC); the Supreme Court order of 25 February 2002 carries that citation, and the Karnataka High Court Division Bench decision in the same litigation is reported at 255 ITR 502. Note that the reassessment was cancelled on two grounds taken together - the s.133(6) illegality and the absence of a rational nexus in the reasons recorded - so this is not authority that a missing approval by itself and without more destroys a reassessment. A check against the document corrected the disposition and the numbering: the last paragraph is para 52, 'In the result, the appeal is partly allowed', not simply allowed, and para 51 explains why - none of the remaining grounds survived and Ground No.1 had not been pressed. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was partly allowed (para 52), Ground No.1 not having been pressed. The Tribunal recorded that, the assessee not having filed any return, no proceeding whatsoever was pending before the authority at the relevant time (para 27). It held that an income-tax authority below the rank of Director or Commissioner can exercise the power in respect of an enquiry only with the prior approval of the Director or the Commissioner (para 17), that there was nothing on record to suggest any such approval was obtained and the letter itself made no mention of one, so that the power exercised without compliance with the second proviso amounted to an illegal exercise of power (para 19). The reasons recorded to initiate proceedings under s.147 and all proceedings pursuant to them, culminating in the impugned order, were cancelled and Ground No.2 was accepted (para 50); none of the remaining grounds survived for adjudication and Ground No.1 had not been pressed (para 51), so the appeal was partly allowed (para 52).
TaxSphere, “Amrik Singh v ITO”, https://taxnotice.vittsphere.com/caselaw/case/amrik-singh-v-ito-133-6-enquiry-without-prior-approval/ (validity last checked 2026-09-17)
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The bank has a s.133(6) notice asking for customer loan-repayment details and there is no assessment pending on anyone. Can the officer do that?
We are exempt from deducting tax on these deposits. Does that also mean we need not give the information?
Our counsel wants to cite a Bombay case that says s.133(6) cannot be used for a fishing enquiry. Is it still good?
The letter from the Investigation wing cites a provision that does not exist. Is it void for that?
