A s.133(6) notice has come asking for six years of records about a supplier who is under investigation, and no proceeding is pending against me. Must I answer it, how much of it, and can my own reply be used to reopen my years?
The client is a private limited company trading in packaging film, assessed at a ward in Surat, turnover about Rs 14 crore a year. On 28 August 2026 a notice under s.133(6) issued over the signature of an Income-tax Officer requiring the company to furnish within seven days, for the six financial years 2019-20 to 2024-25, the ledger account of one named supplier, copies of every purchase invoice and e-way bill, transport and weighbridge records, statements of all bank accounts for all six years, a list of every party from whom purchases exceeded Rs 10,00,000 in each year, and the PANs of all directors. The notice says only that the information is required in connection with enquiries in the case of that supplier. No assessment or reassessment is pending against the company for any of the six years; the AY 2025-26 return was processed under s.143(1) on 4 July 2026 with no adjustment. The notice does not say that any approval was obtained or by whom. Purchases from the supplier across the six years total Rs 1,42,80,000, every rupee paid through the bank, with input credit taken in GST and never reversed. A notice in the same terms has gone to the company's own tax consultant, asking him to produce the company's books.
Do two things before drafting a line of reply. Put a written acknowledgement on record within the seven days, even if it is only an interim reply asking for four weeks, because the default under s.133(6) is a continuing one charged at Rs 500 a day and a late answer and no answer are not the same order of exposure. Then establish, year by year, whether any proceeding is actually pending - not because a pending proceeding is needed for the power, since the Supreme Court has held it is not, but because where nothing is pending the proviso puts the officer's approval in issue, and that single fact decides what is worth asking about and how much of the six-year demand can be justified at all.
s.133(6) lets an income-tax authority require any person to furnish information useful for, or relevant to, any enquiry or proceeding under the Act. The Supreme Court has held that after the second proviso was inserted in 1995 the sub-section may be invoked when no proceeding is pending at all, that no enquiry need have commenced before it is used, and that the only safeguard is the prior approval of the Director or the Commissioner. So the fact that nothing is pending against the company is not an objection; the approval is the only thing the sub-section conditions the power on. A notice signed by an Income-tax Officer, for years in which nothing is pending, and silent about approval, is therefore a notice whose foundation should be asked about - in the reply itself, politely, and without refusing to answer. Ask for the date of the approval and the rank of the authority who gave it, and furnish the information without prejudice to that request. If the approval exists the question costs nothing; if it does not, the answer is on the record before anything is built on the reply.
Three of the obvious ones have gone. That the officer is not your Assessing Officer is not an objection: a Division Bench held that the expression 'income-tax authorities' is of wide amplitude, that the s.133(6) procedure is akin to a survey, and that the powers are in the nature of a survey and a general enquiry to identify persons who are likely to have taxable income, and it upheld notices issued by an Income-tax Officer (Intelligence). That the letter cites the wrong provision is not an objection either: a High Court sustained a letter purporting to be issued under a sub-section that does not exist as referable to s.133(6) read with s.135, holding that a notice under a wrongly cited or non-existent provision is not invalid if the authority had the power under an appropriate one. And that the department already holds the information is not an objection: a High Court rejected that argument and held that a duty of secrecy yields to disclosure under compulsion of law. What is worth establishing is which power is being used, because a notice from a centralised unit under s.133C is a different instrument - it verifies information already in the department's possession, the authority is prescribed by Rule 12D as an income-tax authority not below the rank of Assistant Commissioner authorised by the Board, and what comes back is processed under the scheme notified under s.133C(3) or under s.135A.
The consequence of a failure to furnish information called for under s.133(6) is a penalty under s.272A(2)(c), and the charge is for every day during which the failure continues - so the exposure on a six-limb, six-year notice grows while the file sits on a desk. The rate is Rs 500 for every day of default, the figure substituted for Rs 100 by the Finance Act 2022 with effect from 1 April 2022, so the sums in the reported orders, which all apply the old figure, are no guide to what a current default costs: a default running from late September to early February cost Rs 49,900 at the old rate and would cost five times that now. s.273B relieves the penalty where the person proves reasonable cause, and reasonable cause is the whole defence. What the orders on this sub-section show is how little survives without it. A Bench dismissed twenty-one appeals of co-operative banks that had ignored notices from an Income-tax Officer (Intelligence), holding that he had jurisdiction, that the penalty orders were within the limitation in s.275(1)(c), and that no valid reason having been offered there was no reasonable cause within s.273B; the same Bench dismissed nine more on the same footing two years later. The neighbouring sub-section is where the assessee-side material is: one Bench deleted a penalty where an adjournment request had never been rejected by a speaking order, another where compliance came late but before the order was framed and the officer used the reply, and a third applied s.273B default by default rather than all or nothing - while a fourth upheld one penalty for each notice where the assessee simply did not reply.
The reflex is to say that a demand for six years of everything is a fishing enquiry outside a power given for information useful for, or relevant to, an enquiry. It will not run. A Division Bench held that the object of a s.133(6) notice is to collect information useful for or relevant to an enquiry for widening the tax base and unearthing undisclosed money, and that a demand for the names and addresses of every depositor above a threshold is within that object; the Supreme Court, construing the amended sub-section, agreed with that construction and upheld an omnibus notice to a bank about its customers. Another Division Bench described the procedure as akin to a survey and the powers as in the nature of a general enquiry to identify persons likely to have taxable income. An exemption elsewhere in the Act is no exemption from furnishing: a society not required to deduct tax under s.194A(3)(viia) was held to have no corresponding relief from s.133(6). What the courts do give is time - faced with a demand for depositor details going back years, a Division Bench upheld the notices and granted two further months to comply. So ask for time, furnish the supplier file in full, and furnish the wider items too unless there is a reason better than inconvenience. Setting out in the covering letter why the all-accounts and all-parties items are not connected to the stated enquiry is still worth doing, because it is the only record you will have if the reply is later used as the foundation of something else, but state it as a position and not as a ground, and do not withhold on it.
A s.133(6) reply about purchases from a party under investigation is almost always the record on which a later s.69C or s.68 addition is fought, and what decides those cases is documents rather than denials. A Tribunal deleted a bogus-purchase addition on a wide evidentiary base in which the officer's own s.133(6) notices came back with direct confirmations from every supplier and the primary documents were complete. On the other side, a High Court set aside a Tribunal's order restricting an addition to a profit percentage and restored the Assessing Officer's disallowance of the entire Rs 20.06 crore under s.69C, and the Supreme Court dismissed the assessee's petition; another High Court set aside a three per cent estimate and restored the whole disallowance, and what decided it was a list of documents that had not been produced, beginning with any evidence of actual delivery. So assemble the lorry receipts, weighbridge slips, stock movement and payment trail now, while they still exist, and get a confirmation on the supplier's own letterhead carrying its GSTIN.
It can be, and the argument that it cannot will not run. Under the substituted regime the trigger is information which suggests that income chargeable to tax has escaped assessment, and the statutory list of what counts is wide - a High Court has held that the risk management strategy is merely a phrase for an evolving departmental strategy covering all the sources from which information may be collated, and that no limitation should be placed on it. The department's own e-verification instruction tells officers that what verification hands them is Information within that list and that they are to invoke s.147. So limitation and threshold, not the character of the source, are the real filter: s.149 as substituted from 1 September 2024 fixes the outer dates, the fifty-lakh limb decides whether the longer period is available, and s.151 makes prior approval a condition of issue. Run all three for each of the six years before filing, because for the oldest years the answer may be that nothing can be done with the reply, and that changes what is worth arguing now rather than later. One more reason to answer fully: the reply is what defeats a careless reopening later. A High Court set aside a s.148A order and the consequential notice where the assessee had already told the officer, in answer to a s.133(6) notice, that a property had been purchased and not sold and the reopening proceeded on the footing that it had been sold; another quashed a s.148A order and the s.148 notice that went with it where the officer had repeated an allegation of non-response to a s.133(6) notice the assessee had never received while ignoring the purchase invoices, bank statements and ledger confirmations actually filed.
s.133(6) is addressed to a person and requires that person to furnish information. A consultant holding a client's books holds them for the client; they are not his information, and handing them over on his own initiative is a step he is not obliged to take and should not take without written instructions. What he must do is reply within the time: confirm the engagement and the years it covers, furnish what is genuinely his own record - the period of engagement and the returns he filed - and state that the accounting records belong to the named assessee, who has been informed the same day, and to whom the officer is directed for them. Doing that in writing before the due date removes the daily default from the consultant's own file and leaves the officer to serve the company, which he can do and in this case already has. Nor can he answer with a refusal founded on confidentiality: a High Court has held, of a bank asked for its customers' particulars, that a duty of secrecy yields to disclosure under compulsion of law.
If the enquiry is going anywhere it is going towards an addition founded on something said or found in the supplier's case. A statement recorded under summons is a sworn statement, so the objection that a survey statement carries no evidentiary value is not available; what is available is that it was made behind the company's back, that it must be supplied, and that the maker must be produced for cross-examination. Asking now costs nothing and puts the request on the record months before any notice, so that a later refusal is a documented refusal. The Board has told field offices that the officer must satisfy himself as to the true nature and source of amounts before invoking a deeming section, and that the necessary enquiry is his own obligation - which is the answer to a reply treated as an admission rather than as evidence. Where the reporting is itself wrong, an AIS or SFT entry against the company's PAN that is not its own, displace it through the feedback route in parallel, because an uncorrected entry will be quoted.
Most of these end where they start. The information is furnished, it corroborates the return, and nothing further happens, because the officer is verifying a list of counterparties and the company is one name on it. The next commonest outcome is a s.148A show-cause a year or two later for one or two of the six years, built on whatever the supplier's own file produced, at which point the value of the reply is that the documents were assembled while they still existed and that the company's account of the transactions is already on the record - the two reported cases in which a s.148A order was set aside on this material both turned on the officer ignoring what the assessee had said in answer to a s.133(6) notice. The bad outcome belongs to the file answered thinly or not at all: a penalty under s.272A(2)(c) at Rs 500 a day accruing unnoticed, and a reassessment in which the company is trying to prove delivery from six-year-old records it no longer holds. Challenges to the notice itself essentially do not succeed. Where purchases are held to be accommodation entries the addition is usually the whole of them, not a profit percentage, and the recent appellate history has moved against the assessee.
