Section 133 of ITA, 1961 : Section 133: Power To Call For Information

Explanation using Example

Imagine a situation where Mr. Sharma, an Assessing Officer from the Income Tax Department, is conducting an investigation into a firm suspected of concealing income. To gather more information, he exercises his powers under Section 133 of the Income-tax Act, 1961:

• Mr. Sharma requires the firm to provide a list of all partners, their addresses, and their respective shares in the firm to check if the income reported by each partner aligns with their share in the firm's profits.
• He suspects that the firm has made substantial payments to various individuals as commission, which have not been appropriately disclosed. Therefore, he asks the firm to furnish a statement detailing all payments made in the previous year to individuals as rent, interest, commission, etc., over one thousand rupees.
• Additionally, since the firm has engaged in numerous transactions through a stock broker, Mr. Sharma uses his authority to require the stock broker to provide a statement of all persons for whom the broker has executed transactions, along with the details of these transactions.

This example illustrates how an income-tax authority uses Section 133 to gather information necessary for tax assessment and to ensure compliance with tax laws.