Section 133 of Income Tax Act 1961

Power to call for information

The Income Tax Department takes a vigilant stance on tax filings, demonstrating a commitment to swift and stringent actions against potential wrongdoers. In the month of July 2023 alone, the department issued over 100,000 notices to taxpayers suspected of underreporting or misreporting their income in their tax filings. Section 133 of the Income Tax Act empowers the department to dispatch notices to any taxpayer whose filed returns raise suspicions.

In case you find a notice in your mailbox, it’s crucial to understand the intricacies of Section 133 , including its provisions, the stipulated time limit, relevant case laws, and the nature of such notices. This guide will walk you through the essential aspects, ensuring you are well-equipped to formulate an appropriate and effective response.

What is Section 133 of the Income Tax Act, 1961 ?

Section 133 of the Income Tax Act, 1961 states as follows:

The Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or ⁴¹[the Joint Commissioner (Appeals) or] the Commissioner (Appeals) may, for the purposes of this Act,—

(1) require any firm to furnish him with a return of the names and addresses of the partners of the firm and their respective shares;

(2) require any Hindu undivided family to furnish him with a return of the names and addresses of the manager and the members of the family;

(3) require any person whom he has reason to believe to be a trustee, guardian or agent, to furnish him with a return of the names of the persons for or of whom he is trustee, guardian or agent, and of their addresses;

(4) require any assessee to furnish a statement of the names and addresses of all persons to whom he has paid in any previous year rent, interest, commission, royalty or brokerage, or any annuity, not being any annuity taxable under the head “Salaries” amounting to more than one thousand rupees, or such higher amount as may be prescribed, together with particulars of all such payments made;

(5) require any dealer, broker or agent or any person concerned in the management of a stock or commodity exchange to furnish a statement of the names and addresses of all persons to whom he or the exchange has paid any sum in connection with the transfer, whether by way of sale, exchange or otherwise, of assets, or on whose behalf or from whom he or the exchange has received any such sum, together with particulars of all such payments and receipts ;

(6) require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or ⁴²[the Joint Commissioner (Appeals) or] the Commissioner (Appeals), giving information in relation to such points or matters as, in the opinion of the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or ⁴²[the Joint Commissioner (Appeals) or] the Commissioner (Appeals), will be useful for, or relevant to, any enquiry or proceeding under this Act:

Provided that the powers referred to in clause (6), may also be exercised by the Principal Director General or Director-General, the Principal Chief Commissioner or Chief Commissioner, the Principal Director or Director or the Principal Commissioner or Commissioner or the Joint Director or Deputy Director or Assistant Director:

Provided further that the power in respect of an inquiry, in a case where no proceeding is pending, shall not be exercised by any income-tax authority below the rank of Principal Director or Director or Principal Commissioner or Commissioner, other than the Joint Director or Deputy Director or Assistant Director, without the prior approval of the Principal Director or Director or, as the case may be, the Principal Commissioner or Commissioner:

Provided also that for the purposes of an agreement referred to in section 90 or section 90A, an income-tax authority notified under sub-section (2) of section 131 may exercise all the powers conferred under this section, notwithstanding that no proceedings are pending before it or any other income-tax authority.

Notice under section 133 of Income Tax Act

Have you received notice under section 133 ?

Lets understand why did you receive notice under section 133.

The Income Tax departement can basically issue you a notice requiring you to disclose any information that they deem fit which might help the departement in making an assessement of Income.

For example: You have not filed Income Tax Returns but you purchased a property worth Rs 50 Lakhs. Then in such case the departement can issue you a notice under section 133 to furnish details with respect to the source of money. That is you will need to inform the departement as to from where these Rs 50 Lakhs came ?

Usually Notice under section 133 is issued by Income Tax Departement in case where the Income Tax Officers and the Income Tax Department thinks that you have not disclosed certain income in your Income Tax Return or have claimed wrong deductions. Hence, they issue a notice under section 133 of Income Tax Act to ask for information with respect to such Income. The information asked may vary on case to case basis depending on the nature of your case.

Who can issue notice under section 133 of the Income Tax Act 1961?

The following Income Tax Officers may issue notice under section 133 of Income Tax Act:

Assessing Officer,
Deputy Commissioner (Appeals),
Joint Commissioner,
Joint Commissioner (Appeals),
Commissioner (Appeals),
Principal Director General,
Director-General,
Principal Chief Commissioner,
Chief Commissioner,
Principal Director,
Director,
Principal Commissioner,
Commissioner,
Joint Director,
Deputy Director, or
Assistant Director.

What information may be asked under section 133 of the Income Tax Act 1961?

Any of the below information may be asked under section 133 of the Income Tax Act 1961

Details about firms: Names and addresses of partners, their share percentages.
Details about Hindu Undivided Families (HUFs): Names and addresses of the manager and family members.
Details about trustees, guardians, or agents: Names and addresses of the persons they represent.
Details about payments made: Names and addresses of people to whom rent, interest, commission, royalty, brokerage, or annuities (not taxable as salary) exceeding a certain amount have been paid, along with payment details.
Details about transactions in stock or commodity exchanges: Names and addresses of people involved in transactions, along with payment and receipt details.
General Information: Any information, accounts, or statements that the tax officer believes are relevant to an inquiry or proceeding under the Income Tax Act. This includes information from banks and their officers.

How to respond to the notice under section 133 of the Income Tax Act 1961?

While responding to a notice under section 133 of the Income Tax Act, following points are to be kept in mind.

Comply with the notice: Provide the requested information within the specified time limit.
Seek clarification: If you have any doubts about the notice or need more time to comply, contact the issuing officer for clarification.
Non-compliance: Failure to comply with the notice without reasonable cause can lead to penalties. Further, it is the best opportunity with the assessee to provide the detailed information to avoid any adverse assessement proceedings under any of the section of the Income Tax Act including section 144, 147, 148, 153, 271 etc

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