The Income Tax Officer (CIB)
Sub:- Reply to your notice u/s 133(6) of the Income-tax act, 1961 in the case of Sub Registrar
With reference to aforesaid matter, please take th reference to your notice no--------------------------------------------------------------- in which you have asked for the information of sale of property between valued Rs. 5 Lac to 30 Lac.
In this connection we are advised to reply as under:-
1. That Sub Registrar is appointed under section 6 of the Registration Act, 1908. Registration Act 1908 is the Central Act and administration of Act is done by State Govt. Stamp duty is the levy on registration of transactions mentioned in Registration Act, 1908 which in list II (State List Entry No. 63 of Schedule 7 of the Constitution of India. State is defined under Article 12 of the Constitution of India which is reproduced below:-
Definition of “ the State”: - Article 12 of the Constitution defines the State as follows:
“In this part, unless the context otherwise requires, “the State” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. “
The definition of the term “the State” specifies the authorities and instrumentalities functioning within or without the territory of India, which shall be deemed to be “the State” for the purpose of part III of the Constitution. The definition is inclusive and not exhaustive. Therefore, authorities and instrumentalities not specified in it may also fall within it if they otherwise satisfy the characteristics of “the State” as defined in this article.
The authorities and instrumentalities specified in article 12 are –
i. The Government and Parliament of India;
ii. The Government and the legislature of each of the states;
iii. All local authorities; and
iv. Other authorities within the territory of India or under the control of the government of India.
Local authorities:- The expression “local authorities’ refers to authorities like municipalities, district boards, panchayats, improvement trusts, port trusts, mining settlement boards, etc., Rashid Ahmed v. M.B. kairana is one of the earliest instances where a municipal board was held to be a local authority under article12.
Other authorities: - Article 12 winds up the list of authorities falling within the definition of the State by referring to ‘other authorities’ within the territory of India or under the control of the government of India. What are these ‘other authorities’? To begin with some high courts held that since the expression ‘other authorities’ is used after mentioning a few of them, namely, the government and Parliament of India, the government and the legislature of each of the states, and local authorities, it would be reasonable to construe this expression ejusdem generis with government or legislature. So construed, it could only mean authorities exercising governmental or sovereign powers and functions. On this interpretation of the expression ‘other authorities’ was, however, rejected by the Supreme Court. It held that the doctrine of ejusdem generis was inapplicable to the interpretation of the expression ‘other authorities’. To invoke the application of ejusdem generis rule, the court said, there must be a distinct genus or category running through the bodies already named. In article 12 there was no common genus running through these named bodies nor could these bodies be placed in one single category on any ration basis. Laying down these propositions in Electricity Board, Rajasthan v. Mohan lal case, the Supreme Court held that ‘other authorities’ would include all authorities created by the Constitution or statute on which powers are conferred by law. It was not necessary that the statutory authority should be engaged in performing government or sovereign functions. In support the court cited, articles 19(1) (g) and 298 which contemplate engagement of the State in trade or business and article 46 which requires the State to promote educational and economic interests of the weaker sections of the people. In these cases ‘other authorities’ would cover bodies created for the purpose of performing commercial activities or for promoting the educational and economic interests of the weaker sections of the people. The court also noted that in the instant case the Rajasthan Electricity Board had power to give directions, the disobedience of which was punishable as an offence.
Local Authorities are defined under section 10(20) of the Income-tax Act, 1961 and our office is not a local authority as held by your office in penalty proceedings.
2. That assessee is defined under section 2(7) of the Income Tax Act, 1961 as follows:-
“assessee” means a person by whom [any tax] or any other sum of money is payable under this Act, and includes—
(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income [or assessment of fringe benefits] or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ;
(b) every person who is deemed to be an assessee under any provision of this Act ;
(c) every person who is deemed to be an assessee in default under any provision of this Act ;
3. That Person is defined under section 2(31) of the Income Tax Act, 1961 as follows:-
(i) an individual,
(ii) a Hindu undivided family ,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
[Explanation.—For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains;]
4. That Section 133(6) is reproduced below:-
The [Assessing] Officer, the [Deputy Commissioner (Appeals),] [the [Joint Commissioner] or the Commissioner (Appeals)] may, for the purposes of this Act,— 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 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 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 Director-General, the Chief Commissioner, the Director and the Commissioner :]
[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 Director or Commissioner without the prior approval of the Director or, as the case may be, the Commissioner.
5. That as per Section 285BA of the Income Tax Act, 1961, read with Rule 114E of the Income Tax Rules, 1962, specified entities (Filers) are required to furnish an Annual Information Return (AIR) in respect of specified financial transactions registered/recorded by them during the financial year (beginning on or after April 1, 2004) to the income tax authority or such other prescribed authority. The AIR is required to be furnished by specified persons in respect of specified transactions registered or recorded by them during a financial year. In section 285BA specific obligation is casts upon the certain Govt. Officers apart from the assessee as defined under section 2(7) read with section 2(31) of the I.T. Act, 1961. Sub Registrar is defined under clause (d) of sub section 1 of section 285BA and specified financial transaction is the sale or exchange of property in excess of Rs. 30 Lacs. Sub Registrar Office is remitting the information of more than 30 lac in specified form as called AIR (Annual Information Return) and under the Income-tax Act there is no provision to call for the information between Rs. 5 Lac to 30 Lac.
6. That this issue was already dealt with the higher authorities of the Sub Registrar of state i.e. Inspector General of Stamp of U.P. , Allahabad and its official letter no………………. & ………………………….. addressed to Commissioner of Income-tax Kanpur & copy to CCA, Kanpur and Chairman CBDT New Delhi which was filed to your office and copy of the same is again enclosed for your kind perusal. Relevant portion of the letter is reproduced below:-
Office of the Sub-registrar is not included in the definition of person. Information warranted under section 285BA is remitted regularly. Office of the Sub- registrar is not well equipped and there is shortage of staff. Even if any specific information is required in any particular case , in the national interest information shall be provided by all the offices of the State and income tax officials may also collect the information in person from the concerned office:.
7. That assessing officer is defined under Section 2(7A) of the Income-tax Act as under :-
“Assessing Officer” means the Assistant Commissioner [or Deputy Commissioner] [or Assistant Director] [or Deputy Director] or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the [Additional Commissioner or] [Additional Director or] [Joint Commissioner or Joint Director] who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act ;]
8. That as per section 139A. PAN is required to be obtained by Every person,—
(i) if his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or
(ii) carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed [five lakh] rupees in any previous year; or
(iii) who is required to furnish a return of income under [sub-section (4A) of section 139; or
(iv) being an employer, who is required to furnish a return of fringe benefits under section 115WD,]
and who has not been allotted a permanent account number shall, within such time, as may be prescribed apply to the Assessing Officer for the allotment of a permanent account number………
9. That as per section 206CA. (1) Every person collecting tax in accordance with the provisions of section 206C, shall, within such time as may be prescribed, apply to the Assessing Officer for the allotment of a tax-collection account number.
10. That office of the Sub-Registrar is not required to file the income tax return and also not required to have the PAN in view of the provision of section 139A. Office of the Sub-Registrar is not the person responsible for deducting the tax at source and TAN is also not available with the office. In the District DDO ( officer responsible for deducting tax at source ) is Assistant Inspector General of Stamp and AIG Stamp is the DDO.
11. That your office is repeatedly asking the same information while our controlling authorities and our office vide letter dated……………………. had already pointed out the issues , but your office in a prejudicial manner asking the same information repeatedly and on your persuasion JCIT-CIB Kanpur has also imposed the penalty against this office vide order dated ---------------
12. In instruction no, 1943 it is mentioned by CBDT that after receiving the information from CIB assessing officer will use the power under section 133(6) of the Act, while your office is using the power under section 133(6) of the Act. Power under section 133(6) can only be sued where no proceeding pending under the Act only by the Commissioner or Director. There cannot be any general empowerment to send the notice under section 133(6) to Govt. Offices, but power can be exercised by Assessing officer on specific permission u/s 133(6) by CIT or Director, which in the instant case cannot be possible in view of the following:-
o Person cannot be any person or authority belonging to the department - The information which is contemplated by section 133 is only with reference to either the assessee or any person concerned with the assessee and not with reference to any authority or person belonging to the revenue. A Superintending Engineer or a District Valuation Officer cannot be said to be a person from whom information is sought to be obtained - Daulatram v. ITO  181 ITR 119 (AP). Our office is a State Govt. and not an assessee and no information can be called for u/s 133(6) from the office of State Govt.
o Information which is called for u/s 133(6) of the Act which is general in nature and our office is not obliged to provide the same.
o Authorization by Director or Commissioner can only be given on specific information and not for general information. Therefore, a proceedins under the Act must be specific and it must relate to a specific individual or entity under the Act.
o Information should not relate to contemplated or future proceedings - Looking to the language of section 133(6), it is difficult to include within the meaning of the phrase ‘any proceeding under this Act’ any contemplated or uncontemplated future proceeding. Hence, the power under section 133(6) has to be exercised with reference to a proceeding which is in existence - D.B.S. Financial Services (P.) Ltd. v. Smt. M. George, Second ITO  207 ITR 1077 (Bom.).
o Our office is always ready to provide the information for any specific assessee in the national interest , though not obliged under the Act.
o Power under section 133(6) of the Income-tax Can only be exercised by the Assessing officer or any authority prescribed under the section and you are not an Assessing officer.
o CIT/ Director may authorized an assessing officer to issue the notice under section 133(6) of the Act in case where no proceeding is pending means notice can be issued to an assessee and for obtaining the information for an assessee. In the instant case our office is neither an assessee nor information is sought for any particular assessee.
o If all offices were covered under the definition of assessee then there was no requirement to insert the section 285BA under the Act in which apart from assessee certain Govt. agencies/ department are prescribed to file Annual Information Return. Nature of financial transaction and value of transaction is also prescribed under section 285BA which is 30 Lacs or above in the case of our office. It is the wisdom of the legislature and CBDT (Apex body) to prescribed the value of transaction for Rs. 30 Lac and above otherwise CBDT or legislature could have fix the value of transaction for less value.
From the above , it is clear that neither Sub Registrar Office is a person nor an assessee under the I.T. Act, 1961 and not obliged to provide the information for transaction registered with office for value between Rs. 5 Lac to Rs. 30 Lac for all transaction between 1.4.2009 to 30.10.2009 which is general in nature and no specific. It is further submitted that if any particular information is required to be furnished then in the national interest our office is always ready to provide the same , though not required to be provided. It is also submitted that your office is wrongly exercising the power under section 133(6) of the Act and wrongly imposing the penalty under section 272A(2)(e) for non compliance of notice just to build up the pressure. In all instruction issued for CIB wing it is directed by CBDT that CIB wing will collect the information from various sources amd transmit it to the concerned CIT. Concerned CIT will further transfer it to the concerned assessing officer and if there is any proceeding pending then concerned Assessing officer will issue the notice under section 133(6) to the Assessee for verification of information. If no proceeding is pending then CIT will authorise him to issue the notice under Section 133(6) while in the instant case notice is issued in clear violation of CBDT instructions as well as theme of the section 133(6) of the Act.
In view of the above you are requested to kindly withdraw the notice which is issued not in accordance with the provisions of the Income tax Act and oblige.
Encl: as above
Copy :- I.G. Stamp
Govt. of Uttar Pradesh
( For information and with request to pursue the matter with Chairman CBDT and issue a detailed instructions whether provision of section 133(6) applicable on the office or not )
Central Board of Direct Taxes