Power to call for information by prescribed income-tax authority
(1) The prescribed income-tax authority45 may, for the purposes of verification of information in its possession relating to any person, issue a notice to such person requiring him, on or before a date to be specified therein, to furnish information or documents verified in the manner specified therein, which may be useful for, or relevant to, any inquiry or proceeding under this Act.
(2) Where any information or document has been received in response to a notice issued under sub-section (1), the prescribed income-tax authority may process and utilise such information and document in accordance with the scheme notified under sub-section (3) or the provisions of section 135A.
(3) The Board may make a scheme for centralised issuance of notice and for processing of information or documents and making available the outcome of the processing to the Assessing Officer.
(4) The scheme made under sub-section (3) shall cease to have effect from the date on which the scheme notified under section 135A in respect of this section comes into effect.
Explanation.—In this section, the term “proceeding” shall have the meaning assigned to it in clause (b) of the Explanation to section 133A.
Lets understand the provisions of above section 133C of Income Tax Act, 1961 : Power to call for information by prescribed income-tax authority
Section 133C of the Income Tax Act 1961 simplifies the process of verifying information related to individuals. Here’s an explanation in plain language:
The tax authorities can send a notice to someone, asking them to provide certain information or documents by a specified date. This information is needed for any investigation or legal action related to taxation.
If the person responds to the notice and provides the requested information or documents, the tax authorities can use this information according to a specific plan or the rules in Section 135A.
The government can create a system where notices are sent centrally, and information is processed and shared with the tax assessors.
This central system will stop operating when a new scheme under Section 135A is put into effect.
For example, let’s say the tax department receives information that suggests a taxpayer might not be paying their taxes correctly. They can send a notice to that person, asking for more details about their income and expenses. If the person complies and provides the necessary documents, the tax authorities can use that information to investigate and determine if the taxpayer owes more taxes. This process is part of Section 133C of the Income Tax Act 1961.
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