1971 (8) TMI 57 - HC - Income Tax

Production of records - omission of section 137 from 1st April 1964 - bar against disclosure - learned subordinate judge not committed any illegality in calling for the documents and agreeing to accept them in evidence on a subsequent to date 1st April 1964

Summary

Issues:
1. Legality of summoning income-tax records for partition suit.
2. Interpretation of section 137 and section 138 of the Income-tax Act, 1961.
3. Application of section 6 of the General Clauses Act.
4. Scope of disclosure restrictions under section 138(2) for banking companies.
5. Authority of the Commissioner to disclose information under section 138(1)(b).
6. Court's discretion to call for documents in civil proceedings.

Analysis:
The case involved a partition suit where the plaintiffs sought income-tax records for the business assets included in the partition. The defendants objected to the legality of summoning these documents under the Income-tax Act, 1961. The trial judge ruled in favor of summoning the records, leading to a revision application challenging this order.

The key legal provisions in question were section 137 and section 138 of the Income-tax Act, 1961. Section 137 imposed a bar against disclosure of certain particulars, but it was omitted from the statute by the Finance Act of 1964. Section 138 provided for disclosure of information by the Board or income-tax authority, with restrictions under sub-section (2) applicable only to banking companies post the omission of section 137.

The argument raised by the petitioner included the application of section 6 of the General Clauses Act to continue the bar under section 137, the impact of notifications under section 138(2) making the ban more stringent, and the authority of the Commissioner under section 138(1)(b) to disclose information. The court clarified that the ban under section 137 no longer applied post its omission, and the restrictions under section 138(2) were limited to banking companies, thereby rejecting the petitioner's contentions.

Regarding the authority of the Commissioner under section 138(1)(b), the court held that it was an enabling provision and did not cover the situation where the court called for documents. The court emphasized that unless there was a specific restriction under a statute, the court had the discretion to call for documents in civil proceedings. As no ban existed for the case in question, the trial judge did not err in summoning the documents for the period after April 1, 1964.

In conclusion, the court dismissed the civil revision, stating that the parties were entitled to documents only for the period after April 1, 1964. The judgment clarified the legality of summoning income-tax records for civil proceedings and the scope of disclosure restrictions under the Income-tax Act, 1961.