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?
Yes. After the second proviso was inserted in 1995, s.133(6) may be invoked when no proceeding is pending at all. The Supreme Court held that no enquiry need have commenced before the sub-section is used, and that the only safeguard is the prior approval of the Director or Commissioner. An omnibus notice to a bank about its customers is within the power.
Decided by the Supreme Court (B.N. Kirpal J and Arijit Pasayat J) on 2002-02-25, reported as (2002) 255 ITR 508 (SC); (2002) 9 SCC 106; AIR 2003 SC 2096 (Special Leave Petitions; numbers not printed in the order). It bears on section 133(6), section 133 of the Income Tax Act 1961, in Evidence & Burden of Proof and Assessment & Scrutiny matters.
This is the Supreme Court's own construction of s.133(6) and it closes the argument most commonly made against these notices - that nothing is pending, so nothing can be asked. It also settles that a notice about other people's accounts is not for that reason bad.
Binding on every court and authority in India.
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The Karnataka Bank was served with a notice dated 7 July 2000 under s.133(6) requiring information about repayment of loans by its customers for the periods stated in the notice. The notice recorded that the information was sought at the instance of the Director of Income-tax (Investigation). The bank's case was that no enquiry was pending, and that an omnibus notice requiring information about the bank's customers was not within the sub-section. A single judge of the Karnataka High Court and then a Division Bench rejected that construction, and the bank came to the Supreme Court by special leave.
The special leave petitions were dismissed. The Court set out s.133(6) as it reads after the second proviso and held that it is not necessary that any enquiry should have commenced, by notice or otherwise, before the sub-section can be invoked; the power is given in order to collect information. Such information can be called for even when no proceeding under the Act is pending, the only safeguard being that the approval of the Director or the Commissioner must first be obtained. The Court expressly agreed with the construction placed on the section by the single judge and the Division Bench of the Karnataka High Court (paras 2 to 4).
The Court reproduced the sub-section together with both provisos (para 2) and reasoned from the text alone. The first limb of its reasoning is that the words of s.133(6) do not presuppose a pending enquiry: the power exists in order to collect information, and includes a power to require a banking company to furnish information on such points or matters as may be useful or relevant (para 3). The second limb is the second proviso itself, which the Court read as the legislature's own confirmation that the power reaches cases where no proceeding is pending, subject to the single condition of prior approval (para 3). The Court noted that the notice recorded that it was issued at the instance of the Director of Income-tax (Investigation) (para 3). It then adopted the High Court's construction and dismissed the petitions (para 4).
such information can be sought for even when no proceeding under the Act is pending
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Handle my notice → Ask a CA on WhatsAppYes. After the second proviso was inserted in 1995, s.133(6) may be invoked when no proceeding is pending at all. The Supreme Court held that no enquiry need have commenced before the sub-section is used, and that the only safeguard is the prior approval of the Director or Commissioner. An omnibus notice to a bank about its customers is within the power. This was decided by the Supreme Court (B.N. Kirpal J and Arijit Pasayat J) and bears on section 133(6), section 133 of the Income Tax Act 1961. It is reported as (2002) 255 ITR 508 (SC); (2002) 9 SCC 106; AIR 2003 SC 2096 (Special Leave Petitions; numbers not printed in the order). This is the Supreme Court's own construction of s.133(6) and it closes the argument most commonly made against these notices - that nothing is pending, so nothing can be asked. It also settles that a notice about other people's accounts is not for that reason bad. If it applies to you, the first step is this: Stop arguing that no proceeding is pending; after 1995 that is not an objection to a s.133(6) notice.
The Karnataka Bank was served with a notice dated 7 July 2000 under s.133(6) requiring information about repayment of loans by its customers for the periods stated in the notice. The notice recorded that the information was sought at the instance of the Director of Income-tax (Investigation). The bank's case was that no enquiry was pending, and that an omnibus notice requiring information about the bank's customers was not within the sub-section. A single judge of the Karnataka High Court and then a Division Bench rejected that construction, and the bank came to the Supreme Court by special leave. The matter was decided on 2002-02-25 by the Supreme Court (B.N. Kirpal J and Arijit Pasayat J). On those facts the Supreme Court held as follows. The special leave petitions were dismissed. The Court set out s.133(6) as it reads after the second proviso and held that it is not necessary that any enquiry should have commenced, by notice or otherwise, before the sub-section can be invoked; the power is given in order to collect information. Such information can be called for even when no proceeding under the Act is pending, the only safeguard being that the approval of the Director or the Commissioner must first be obtained. The Court expressly agreed with the construction placed on the section by the single judge and the Division Bench of the Karnataka High Court (paras 2 to 4).
The Court reproduced the sub-section together with both provisos (para 2) and reasoned from the text alone. The first limb of its reasoning is that the words of s.133(6) do not presuppose a pending enquiry: the power exists in order to collect information, and includes a power to require a banking company to furnish information on such points or matters as may be useful or relevant (para 3). The second limb is the second proviso itself, which the Court read as the legislature's own confirmation that the power reaches cases where no proceeding is pending, subject to the single condition of prior approval (para 3). The Court noted that the notice recorded that it was issued at the instance of the Director of Income-tax (Investigation) (para 3). It then adopted the High Court's construction and dismissed the petitions (para 4). In the words reproduced by the source cited on this page: "such information can be sought for even when no proceeding under the Act is pending"
It was decided by the Supreme Court on 2002-02-25 and is reported as (2002) 255 ITR 508 (SC); (2002) 9 SCC 106; AIR 2003 SC 2096 (Special Leave Petitions; numbers not printed in the order). Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 133(6), 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 department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The special leave petitions were dismissed. The Court set out s.133(6) as it reads after the second proviso and held that it is not necessary that any enquiry should have commenced, by notice or otherwise, before the sub-section can be invoked; the power is given in order to collect information. Such information can be called for even when no proceeding under the Act is pending, the only safeguard being that the approval of the Director or the Commissioner must first be obtained. The Court expressly agreed with the construction placed on the section by the single judge and the Division Bench of the Karnataka High Court (paras 2 to 4). It arises in Evidence & Burden of Proof and Assessment & Scrutiny matters, on section 133(6), section 133 of the Income Tax Act 1961, and was decided by B.N. Kirpal J and Arijit Pasayat J. 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. Check instead whether the officer is below the rank of Principal Director/Director or Principal Commissioner/Commissioner and, if so, whether the proviso's approval was taken - that is the only condition the Court identified. Where the notice is to a bank about customers, record that the customers' identities are being disclosed under compulsion of law, and say so in the reply. Answer within time; the merits of the demand are not a defence to the penalty for not answering.
Still good law. Followed by the Kerala High Court in Kechery Service Co-operative Bank Ltd v CIT (CIB), decided 25 February 2003, which reproduced the operative passage; relied on by the Amritsar Bench of the Tribunal in Amrik Singh v ITO, decided 11 May 2016, for the proposition that the approval is a condition of the power. Nothing overruling or doubting it was found. 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.
This is a short order of four numbered paragraphs, not a full judgment, but it is reasoned and it is the Supreme Court's own construction of the sub-section. The order as reproduced does not name the Judges or the SLP numbers in its own text; the Bench recorded here is taken from the report heading and could not be confirmed from the order. The section as quoted in the order is in the pre-2013 nomenclature - Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner, Commissioner (Appeals), and Director General, Chief Commissioner, Director and Commissioner in the first proviso. The ranks were re-lettered by the Finance Act 2013 to add the Principal Director/Principal Commissioner tier; the substance of the proviso is unchanged. The Amritsar Bench in Amrik Singh cites this decision as '255 ITR 508 (SC)', which matches. 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 special leave petitions were dismissed. The Court set out s.133(6) as it reads after the second proviso and held that it is not necessary that any enquiry should have commenced, by notice or otherwise, before the sub-section can be invoked; the power is given in order to collect information. Such information can be called for even when no proceeding under the Act is pending, the only safeguard being that the approval of the Director or the Commissioner must first be obtained. The Court expressly agreed with the construction placed on the section by the single judge and the Division Bench of the Karnataka High Court (paras 2 to 4).
TaxSphere, “Karnataka Bank Ltd v Secretary, Government of India”, https://taxnotice.vittsphere.com/caselaw/case/karnataka-bank-v-secretary-govt-of-india-133-6-no-proceeding-pending/ (validity last checked 2026-09-17)
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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?
The notice came from an Income-tax Officer (Intelligence), not from my Assessing Officer. Does he have the power?
