TMI Blog1992 (2) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... gle judge for the opinion of the Full Bench. The questions referred by the learned single judge to the Full Bench revolve around the scope and effect of the provisions of sections 54 and 59B of the Indian Income-tax Act, 1922 (hereinafter referred to as the 1922 Act ) and sections 137 and 138 of the Income-tax Act, 1961 (hereinafter referred to as the 1961 Act ) as amended from time to time in 1964 and 1967 in the context of the claim of privilege by the Incometax Department for the production of the documents relating to assessment of an assessee summoned by the civil court. The following three questions were referred to and considered by the Full Bench (see [1974] 95 ITR 34, 40) 1. What is the position of law relating to privilege prior to 1964 ? 2. What is the position of law relating to privilege after 1964 ? and 3. What is the effect of the production of certified copies relating to income-tax assessment records, and how far certified copies can be admitted in evidence ? The circumstances under which these questions arose, briefly put, are as follows : The plaintiff, Trilok Chand Jain, instituted a suit for recovery of ₹ 1,39,722.86 against the defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before April 1, 1964, in respect of assessment years up to and including assessment year 1961-62 in proceedings for the said assessment years taking place under the Indian Incometax Act, 1922 ; (c) where the documents, records, etc., were filed by an assessee or a third party after April 1, 1962, but before April 1, 1964, in respect of assessment years up to and including assessment year 1961-62 in proceedings for the said assessment years taking place under the Income-tax Act, 1961 ; and (d) where the documents, records, etc., were filed by an assessee or a third party after April 1, 1962, but before April 1, 1964, in respect of assessment years 1962-63 and 1963-64 in proceedings for the said assessment years taking place under the Income-tax Act, 1961 ; and sustained the claim of privilege by the Income-tax Department in each one of the situations. The Full Bench, while considering the second question, dealt with the following situations (at pp. 67, 68) : (a) where the documents, records, etc., in respect of which privilege is claimed were filed by an assessee or a third party after April 1, 1964, in respect of assessment years up to and including the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The controversy before us has been confined to the finding of the High Court relating to the claim of privilege for the production of documents which were filed after the repeal of section 137, with effect from April 1, 1964, in respect of the assessment years 1964-65 onwards. Thus, it is the finding on situation (d) of the second question as rendered by the Full Bench which alone has been questioned and debated before us. The precise argument of learned counsel for the appellant is that, after the repeal of section 137 of the 1961 Act by Act V of 1964, there is no longer any impediment left in the way of a civil court to summon the production of documents filed by an assessee during the assessment proceedings before an Income-tax Officer after April 1, 1964, in respect of the assessment years 1964-65 onwards, and that the finality attached to an order of the Commissioner with regard to the claim of privilege under section 138(1)(b) has no relation to the power of the court to summon that record. For a proper appreciation of the question debated before us, it would be desirable to refer to the relevant provisions of the 1922 Act and the 1961 Act, as amended from time to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce before it in respect thereof, notwithstanding anything contained in the Indian Evidence Act, 1872. Sub-section (2) of section 54 made punishable, the disclosure by a public servant, of any information contained in those documents. The effect of introduction of section 59B by the Taxation Laws (Amendment) Act, 1960, was that it entitled a person to make an application to the Commissioner to obtain information thereafter as to the amount of tax determined, as payable by an assessee in respect of any assessment made on or before April 1, 1960, and authorised the Commissioner to furnish or cause to be furnished the information sought for, if he was satisfied that there were no circumstances justifying its refusal. This legal position continued to prevail till April 1, 1960, when the 1922 Act, was repealed by the 1961 Act. In the 1961 Act, provisions were made corresponding to sections 54 and 59B of the 1922 Act in sections 137 and 138. The relevant portions of sections 137 and 138 of the Act provided as follows : 137. Disclosure of information prohibited.-(1) All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1922 (11 of 1922) on or after the lst day of April, 1960, the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law. (2) Notwithstanding anything contained in sub-section (1) or any other law for the time being in force, the Central Government 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. The scope of section 138 of the 1961 Act was, as can be seen, enlarged by the substituted provisions of section 138. Under the original section 138, a person could make an application for information only as to the amount of tax determined, as payable by an assessee ; under sub-section (1) of the substituted section 138, a person could make an application for any informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law. The provisions of sub-section (1) of section 138 as they originally stood were incorporated in clause (b) of the substituted sub-section (1) and a new provision was incorporated in clause (a) of sub-section (1) which empowered the Board or any other income-tax authority specified by it by a general or special order in that behalf to furnish or cause to be furnished, information relating to any assessee, to such officer, authority or body as is mentioned in the provision to enable him or it to perform its functions under the Act. Vide clause (b) of the substituted sub-section (1) of section 138, finality has also been attached to an order of the Commissioner, made on an application filed by any person seeking information relating to an assessee in respect of any assessment. The Commissioner has to make an order after being satisfied that it is in the public interest so to do, to furnish or cause to be furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the exercise of that jurisdiction, in respect of the specified documents, by the courts, notwithstanding anything contained in any other law for the time being in force. The exercise of the jurisdiction to seek production of documents had, thus, only been put under a cloud in so far as the record of assessment is concerned. With the repeal of the 1922 Act and omission of section 137 of the 1961 Act, the fetters on the exercise of that jurisdiction were removed with the result that the exercise of the jurisdiction to call for the production of documents relevant to the case pending before the court, even from the income-tax authorities, revived. Neither section 54 of the 1922 Act nor section 137 of the 1961 Act had taken away for all times the jurisdiction of courts to call for the record from the income-tax authorities. Those provisions, as already noticed, had only put the exercise of that jurisdiction under a cloud and those fetters were coterminous with the life of section 54 of the 1922 Act or section 137 of the 1961 Act. The finality which has been attached to the order of the Commissioner under section 138(1)(b) of the Act is applicable only in cases where application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general principle is that an enactment which is repealed is to be treated except as to transactions past and closed, as if it had never existed. The assessee had acquired no right or privilege under the repealed Act, since the provision is only a procedural restriction and did not create any substantive right in the assessee, in respect of assessments for the period after the omission of section 137 of the 1961 Act. Thus, reliance placed on the provisions of section 6 of the General Clauses Act to hold the continuation of the ban on the exercise of jurisdiction by the courts was misplaced. Dealing with the scope of section 138 (1) (b) of the Act, the High Court held that the said provisions attached a finality to an order of the Incometax Commissioner and applied to the cases where the record was summoned even by a court of law. The High Court opined (at pp. 70, 71): The complete omission of the declaration of the confidential nature of the documents, records, etc., and the removal of the ban on courts and public servants no doubt, suggests that the power of a court under the general law to summon such documents, records, etc., relevant to the case before it has been restore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it, desires the production of record relating to any assessment after applying its judicial mind and hearing the parties and, on being prima facie satisfied that the record required to be summoned is relevant for the decision of the controversy before it-it passes a judicial order summoning the production of that record from the party having possession of the record. The Commissioner of Income tax cannot, therefore, refuse to send the record as he certainly is not authorised to set at naught a judicial order of a court of law. He must obey the order of the court by sending the record to the court concerned. Indeed, it is open to the Commissioner of Income-tax to claim privilege, in respect of any document or record so summoned by a court of law, under sections 123 and 124 of the Indian Evidence Act, 1872, and even then it is for the court to decide whether or not to grant that privilege. Had the Legislature intended that no document from the assessment record of an assessee should be produced in a court on being summoned by it, without the approval of the Commissioner of Income-tax, it would have said so in section 138 of the Act itself. The repeal of section 137 of the Act clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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