Section 133(6) information-gathering power upheld as constitutional; privacy and arbitrariness challenges rejected.

Section 133(6) of the Income-tax Act, as amended to include "enquiry or", was construed as a valid information-gathering provision for pending proceedings and pre-assessment enquiries, subject to prior approval of the Director or Commissioner where no proceeding is pending. The challenge based on privacy, Article 14 and Article 19(1)(g) was rejected because the provision serves to collect preliminary data to detect possible tax evasion, and confidentiality is protected by section 138. The notices issued to cooperative banks under this provision were therefore upheld as valid.

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Issues: Whether the addition of the words "enquiry or" and the second proviso to section 133(6) of the Income-tax Act, 1961 is unconstitutional for violating the right to privacy, Article 14 and Article 19(1)(g), and whether the notices issued to cooperative banks under that provision are invalid.

Analysis: Section 133(6), as amended by the Finance Act, 1995, was construed as a measure to enable collection of general information both in pending proceedings and at the enquiry stage, subject to prior approval of the Director or Commissioner where no proceeding is pending. The impugned notices were issued as part of a broad data-collection exercise intended to assist detection of tax evasion and black money. The Court held that the petitioners could not insist on a prior showing of tax liability before furnishing information, because the provision is designed to gather preliminary data to identify possible evaders. The plea based on privacy and arbitrariness was rejected, since the statute contained an in-built control through prior approval and the confidentiality of information was protected by section 138.

Conclusion: The amended provision was held to be constitutionally valid, and the notices issued under section 133(6) were upheld.

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