TMI Blog2014 (11) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... rd respondent, show-cause notices and orders of censure/punishment, etc. are qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act - the act of filing returns with the department cannot be construed as public activity - The expression “public activity” would mean activities of a public nature and not necessarily act done in compliance of a statute - The expression “public activity” would denote activity done for the public and/or in some manner available for participation by public or some section of public - There is no public activity involved in filing a return or an individual pursuing his assessment with the income tax authorities - the information relating to individual assesse could not be disclosed. Validity of order passed by CIC to provided inspection of records - RTI filed by PIO seeking information and all the records available with the Income tax department in respect of nine assessees - Whether income tax returns and the information provided to the income tax authorities during the course of assessment and proceedings thereafter, are exempt under the provision Section 8(1) of the Act and further whether the CIC was correct in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent had also sought:- 1. Inspection of all records in above respect. 2. Kindly provide the copies of the documents mentioned at the time of inspection. 3. Kindly provide the officers (from assessing officers to CCIT), who are the officers to take action on Tax Evasion Petition given by me from 1/8/2003 till date. Request 4 If you want to treat the above information as third party information and want to send the notice to so called third parties inviting their objection, then kindly send the complete request to them including all the annexure e.g. citing public interest by me due to which information should be given to me. 3. The details sought by the respondent of the eight assessees (hereinafter collectively referred to as assessees ) including the details of the assessment years are as under:- i) Dr. Naresh Trehan - petitioner in W.P.(C) No.85/2010 pertaining to Assessment Year 1998-99 to 2005-06 W.P.(C) Nos. 85/2010 other connected matters Page 4 of 29 ii) Mr. Rajan Nanda - petitioner in W.P.(C) No.207/2010 pertaining to Assessment Year 1998-99 to 2005-06 iii) AAA Portfolio Pvt. Ltd. - petitioner in W.P.(C) No.251/2010 pertaining to Assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arwal Anr.: 166 (2010) DLT 305 and decision of Full Bench of the CIC in G R Rawal v. Director General of Income Tax (Investigation): Appeal No. CIC/AT/A/2007/00490, decided on 05.03.2008. 6.2 that the disclosure of the income tax returns is prohibited under Section 138 of the Income Tax Act, 1961 and can be made only if the Commissioner is satisfied that the disclosure is in public interest, which in the present case was rejected by the Commissioner. Reference was made to Hanuman Pershadganeriwala v. The Director of Inspection, Income Tax, New Delhi: (1974) 10 DLT 96. 6.3 that the disclosure of information is also exempted under Section 8(1)(e) of the Act as the income tax department is holding the information of the assessees in fiduciary capacity. 6.4 that the respondent has failed to disclose the public interest which is a mandatory requirement under Section 11 of the Act for disclosure of confidential and personal third party information. 6.5 that the disclosure of the information sought for would be violative of the right to privacy, which has been read into Article 21 of the Constitution of India. Reference was made to paragraph 110 to 112 of the decision of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overriding effect over any other inconsistent law or instrument. 11. The petitioners have contended that the income tax returns and other information provided by the assessees during the course of assessment would be exempt from disclosure by virtue of section 8(1)(d), Section 8(1)(e) and 8(1)(j) of the Act. It is thus necessary to examine the applicability of each of the above provisions with respect to the information sought by the respondent. 12. Section 8(1)(d) of the Act expressly provides an exemption in respect of such information. At this stage, it is necessary to refer to Section 8(1)(d) of the Act which reads as under:- 8. Exemption from disclosure of information. (1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, xxxx xxxx xxxx xxxx xxxx (d) information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; 13. Certain petitioners had specifically pleaded that information provided in the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the contention that a fiduciary relationship within the meaning of Section 8(1)(e) of the Act can be attributed to a relationship between an assessee and the income tax authority. The Supreme Court in the case of CBSE v. Aditya Bandopadhyay: (2011) 8 SCC 497 had explained that the words information available to a person in its fiduciary relationship could not be construed in a wide sense but has to be considered in the normal and recognized sense. The relevant extract of the said decision is quoted below:- 41. In a philosophical and very wide sense, examining bodies can be said to act in a fiduciary capacity, with reference to the students who participate in an examination, as a Government does while governing its citizens or as the present generation does with reference to the future generation while preserving the environment. But the words information available to a person in his fiduciary relationship are used in Section 8(1)(e) of the RTI Act in its normal and well-recognised sense, that is, to refer to persons who act in a fiduciary capacity, with reference to a specific beneficiary or beneficiaries who are to be expected to be protected or benefited by the actions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Supreme Court in Girish Ramchandra Deshpande v. Central Information Commr.: (2013) 1 SCC 212. The relevant extract of the said judgment is quoted below: 11. The petitioner herein sought for copies of all memos, show-cause notices and censure/punishment awarded to the third respondent from his employer and also details viz. movable and immovable properties and also the details of his investments, lending and borrowing from banks and other financial institutions. Further, he has also sought for the details of gifts stated to have been accepted by the third respondent, his family members and friends and relatives at the marriage of his son. The information mostly sought for finds a place in the income tax returns of the third respondent. The question that has come up for consideration is: whether the abovementioned information sought for qualifies to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. 12. We are in agreement with the CIC and the courts below that the details called for by the petitioner i.e. copies of all memos issued to the third respondent, show-cause notices and orders of censure/punishment, etc. are qualified t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation is linked with invasion of privacy of the individual . The use of the word the before the word individual immediately links the same with the expression personal information 21. Black s law dictionary, sixth edition, inter alia, defines the word personal as under:- The word personal means appertaining to the person; belonging to an individual; limited to the person; having the nature or partaking of the qualities of human beings, or of movable property. 22. A perusal of the above definition also indicates that the ordinary usage of the word personal is in the context of an individual human being and not a corporate entity. The U.S. Supreme Court has also interpreted the expression personal to be used in the context of an individual human being and not a corporate entity. In the case of Federal Communications Commission v. AT T Inc: 2011 US LEXIS 1899 the US Supreme Court considered the meaning of the expression personal privacy in the context of the Freedom of Information Act, which required Federal Agencies to make certain records and documents publically available on request. Such disclosure was exempt if the records could reasonably be expect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2002) (same). 23. In my view, the aforesaid reasoning would also be applicable to the expression personal used in Section 8(1)(j) of the Act. The expression individual must be construed in an expansive sense and would include a body of individuals. The said exemption would be available even to unincorporated entities as also private, closely held undertaking which are in substance alter egos of their shareholders. However, the expression individual cannot be used as a synonym for the expression person . Under the General Clauses Act, 1897 a person is defined to include any company or association or body of individuals, whether incorporated or not . Thus, whereas a person would include an individual as well as incorporated entities and artificial persons, the expression individual cannot be interpreted to include such entities. The context in which, the expression personal information is used would also exclude it application to large widely held corporations. While, confidential information of a corporation is exempt from disclosure under Section 8(1)(d) of the Act, there is no scope to exclude other information relating to such corporations under Section 8(1)(j) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. At this stage, it may be appropriate to consider the nature of information that is provided by an assesse to its Assessing Officer. In case of Income from business and profession, the income tax returns mainly disclose the final accounts (i.e. profit and loss account and balance sheets) This information is otherwise also liable to be disclosed by companies and is available in public domain since it is necessary for a company to file its annual accounts with the Registrar of Companies. Other incorporated entities are similarly required to also publically disclose their final accounts. However, an Assessing Officer may call for further information while determining the assessable income, which may include all books and papers maintained by an entity. Such information may also have information relating to other parties, the disclosure of which may be exempt under Section 8(1) of the Act. As a matter of illustration, the books of accounts would record transactions of commercial nature which may enjoin the parties to the transactions to keep the information confidential. Further, the books of accounts would also record salaries and other payments to other individuals. Disclosure of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk . Only those information which a Registrar of Cooperative Societies can have access under the Cooperative Societies Act from a Society could be said to be the information which is held or under the control of public authority . Even those information, Registrar, as already indicated, is not legally obliged to provide if those information falls under the exempted category mentioned in Section 8(j) of the Act. Apart from the Registrar of Co-operative Societies, there may be other public authorities who can access information from a Co-operative Bank of a private account maintained by a member of Society under law, in the event of which, in a given situation, the society will have to part with that information. But the demand should have statutory backing. 53. Consequently, an information which has been sought for relates to personal information, the disclosure of which has no relationship to any public activity or interest or which would cause unwarranted invasion of the privacy of the individual, the Registrar of Cooperative Societies, even if he has got that information, is not bound to furnish the same to an applicant, unless he is satisfied that the larger public interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may, having regard to the practices and usages customary or any other relevant factors, by order notified in the Official Gazette, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authorities as may be specified in the order. 30. In the case of Hanuman Pershad (supra), this Court considered the question whether there was any bar on the Income Tax Department from disclosing records produced during the assessment proceedings. The said controversy was answered by the following words:- It is undoubtedly open to the authorities to disclose information received by them from assessments or other proceedings under the Act. However, there are restrictions contained in Section 138 as now existing concerning the manner in which that information is to be disclosed. Leaving aside sub-clause (a) of sub-section (1) it seems that under sub-clause (b), the Commissioner can disclose information if he is satisfied that it is within the public interest to do so. Hence, if some other authority applies to the Commissioner to obtain information, the same may be disclosed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 8(2) of the Act also provides for a non obstante clause which permits disclosure of information in larger public interest. 32. It would also be necessary to refer to Section 11 of the Act, which provides for a notice to a third party before any third party information is disclosed. The proviso to Section 11 of the Act also specifies that disclosure of trade or commercial secrets, which are protected by law would not be allowed unless their disclosure is necessary in public interest. Section 11(1) of the Act reads as under:- 11. Third party information. (1) Where a Central Public Information Officer or the State Public Information Officer, as the case may be, intends to disclose any information or record, or part thereof on a request made under this Act, which relates to or has been supplied by a third party and has been treated as confidential by that third party, the Central Public Information Officer or State Public Information Officer, as the case may be, shall, within five days from the receipt of the request, give a written notice to such third party of the request and of the fact that the Central Public Information Officer or State Public Information Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIC has misdirected itself in concluding that this was in larger public interest. The CIC arrived at this conclusion by noting that disclosure of information was in larger public interest in increasing public revenue and reducing corruption. The assessment proceedings are not public proceedings where all and sundry are allowed to participate and add their opinion to the proceedings. Merely because a spirited citizen wishes to assist in assessment proceedings, the same cannot be stated to be in larger public interest. On the contrary, larger public interest would require that assessment proceedings are completed expeditiously and by the authorities who are statutorily empowered to do so. 37. In the present case, there was no material to indicate that there was any corruption on the part of the income tax authorities which led to a justifiable apprehension that the said authorities were not performing their function diligently. In any event, the CIC has not found that the proceedings relating to assessment were not being conducted in accordance with law and/or required the intervention of the respondent. Assessment proceedings are quasi-judicial proceedings where assessee has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that larger public interest justifies the disclosure of such information. It is, therefore, to be understood clearly that it is a statutory exemption which must operate as a rule and only in exceptional cases would disclosure be permitted, that too, for reasons to be recorded demonstrating satisfaction to the test of larger public interest. It will not be in consonance with the spirit of these provisions, if in a mechanical manner, directions are passed by the appropriate authority to disclose information which may be protected in terms of the above provisions. All information which has come to the notice of or on record of a person holding fiduciary relationship with another and but for such capacity, such information would not have been provided to that authority, would normally need to be protected and would not be open to disclosure keeping the higher standards of integrity and confidentiality of such relationship. Such exemption would be available to such authority or department. 22. The expression public interest has to be understood in its true connotation so as to give complete meaning to the relevant provisions of the Act. The expression public interest must be vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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