Court upholds validity of notices under Income-tax Act for co-op societies & banks, rejecting discrimination claims.

The court upheld the validity of notices issued under section 133(6) of the Income-tax Act to co-operative societies and co-operative banks, requiring them to provide detailed information on depositors. It ruled that these entities are not exempt from such notices, rejecting claims of discrimination and alleged privileges. Co-operative societies must comply with the notices, as the court found no merit in their petitions challenging the applicability of section 133(6) to them. The court granted six weeks for compliance and dismissed the petitions.

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Issues Involved:
1. Validity of notices issued under section 133(6) of the Income-tax Act to co-operative societies and co-operative banks.
2. Jurisdiction and applicability of section 133(6) to co-operative societies and co-operative banks.
3. Alleged privileges and exemptions of co-operative societies under the Income-tax Act.
4. Alleged discrimination against co-operative societies compared to banking companies.

Detailed Analysis:

1. Validity of Notices Issued Under Section 133(6):
The co-operative societies and co-operative banks challenged the validity of the notices issued under section 133(6) of the Income-tax Act, which required them to furnish detailed information, including names and addresses of depositors with deposits above Rs. 50,000. The court examined whether such notices could be issued to these entities and concluded that section 133(6) applies to all persons, including co-operative societies and co-operative banks.

2. Jurisdiction and Applicability of Section 133(6):
The court analyzed the definition of "person" under section 2(31) of the Income-tax Act, which includes "every artificial juridical person." It was determined that co-operative societies and co-operative banks fall within this definition. Therefore, the court held that section 133(6) squarely applies to these entities, and they are not immune from proceedings under this section. The argument that the specific inclusion of banking companies implies the exclusion of co-operative societies was rejected.

3. Alleged Privileges and Exemptions:
The petitioners argued that co-operative societies enjoy certain privileges under the Income-tax Act, such as exemptions under section 80P and immunity from TDS on interest receipts. The court clarified that these provisions do not exempt co-operative societies from scrutiny under section 133(6). The exemption under section 80P and immunity from TDS are specific to certain incomes and do not imply a general exemption from the Income-tax Act's provisions. Therefore, the activities of co-operative societies are subject to scrutiny by the Income-tax Department.

4. Alleged Discrimination Against Co-operative Societies:
The petitioners contended that co-operative societies were being discriminated against compared to banking companies, which were allegedly not subjected to similar notices. The court rejected this argument, stating that no banking company, including nationalized banks, is immune from inquiries under section 133(6). The court emphasized that section 133(6) allows for the collection of general information and is not limited to inquiries about specific persons. Therefore, the petitioners' claim of discrimination was found to be baseless.

Conclusion:
The court held that the notices issued under section 133(6) were within the powers of the authorities and that co-operative societies and co-operative banks are required to furnish the requested information. The court granted the petitioners six weeks to comply with the notices and dismissed the original petitions as devoid of merit.

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