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TMI Blog1972 (3) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... documents produced in or concerned with assessment of income-tax. Section 54 of the Indian Income-tax Act, 1922, provided, inter alia, that except for certain documents mentioned therein, no court shall, save as provided in that Act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof, and any proceedings relating to the recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential. The object of this protection, as stated in various authorities, was to enable people to feel that they could freely state the facts relating to their income, facts which may often involve confidential matters relating to their business, without fear of the matters being disclosed to others. In 1960, by the Taxation Laws (Amendment) Act, 1960, section 59B was introduced, which provided that the Commissioner of Income-tax could, on an application made to him, supply information as to the amount of tax determined as payable by any assessee in respect of any assessment made on or after the 1st day of April, 1960, if he is satisfied that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other income-tax authority specified by it to furnish information relating to any assessee. Clause (b) of that sub-section, which alone is relevant for our purpose, provides: "138. (1)(b) Where a person makes an application to the Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922 (11 of 1922), on or after the 1st 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." Under sub-section (2) of section 138, the Central Government is authorized to direct by notification that no information or document shall be furnished or produced by a public servant in respect of any matters relating to any class of assessees or except to such authorities as may be specified in the order. In holding that the assessment records summoned from the income-tax department cannot be permitted to be produced in court, the learned subordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion, is not without substance, and it can well be urged that even where an application for production of the assessment records relating to the income-tax department is made to the court, the court cannot order the production of the record but shall refer the matter to the Commissioner of Income-tax and it is for the latter to decide what documents or information should be permitted to be disclosed. There is no reported decision on this point. Considering the importance of the question and the fact that it is likely to arise quite often, I consider it necessary that the matter be authoritatively decided. I, accordingly, refer the case to a larger Bench. Since in the course of arguments before me the interpretation placed by the Division Bench on section 6 of the General Clauses Act in O. P. Aggarwal's case has also been challenged it may be desirable to constitute a Full Bench. Let the papers be placed before my Lord the Chief Justice for necessary orders. Order of the Full Bench (March 6, 1972) In a suit pending between the parties in the court of a Subordinate Judge, 1st Class, Amritsar, certain records were summoned from the income-tax department at the instance of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall be punishable with imprisonment which may extend to six months, and shall also be liable to fine. " Sub-section (3) provided for cases in which the record mentioned in sub-section (1) could be disclosed or produced but we are not concerned with those eventualities. Sub-section (4) of section 54 made an exception in the case of any document, declaration or affidavit filed, or the record of any statement or deposition made in a proceeding under section 25A or section 26A or to the giving of evidence of a public servant in respect thereof. By section 9 of the Taxation Laws (Amendment) Act (XXVIII of 1960), section 59B was inserted in the Indian Income-tax Act, 1922, with effect from April 1, 1960, which reads as under: "59B. Disclosure of information respecting tax payable.--Where a person makes an application to the Commissioner in the prescribed form and after payment of the prescribed fee for information as to the amount of tax determined as payable by any assessee in respect of any assessment made on or after the 1st day of April, 1960, the Commissioner may, notwithstanding anything contained in section 54, if he is satisfied that there are no circumstances justifying it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section: "138. Disclosure of information respecting assessees :- (1)(a) The Board or any other Income-tax authority specified by it by a general or special order in this behalf may furnish or cause to be furnished to- (i) any officer, authority, or body performing any functions under any law relating to the imposition of any tax, duty or cess, or to dealigs in foreign exchange as defined in section 2(d) of the Foreign Exchange Regulation Act, 1947 (VII of 1947); or (ii) such officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify by notification in the Official Gazette in this behalf, any such information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922 (XI of 1922), as may, in the opinion of the Board or other income-tax authority, be necessary for the purpose of enabling the officer, authority or body to perform his or its functions under that law. (b) Where a person makes an application to the Commissioner in the prescribed form for any information relating to any assessee in respect of any asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of such authorities as may be specified in the order. It is common ground that an order was notified in 1965 with regard to the assessment of banking companies to the effect that no record of assessment qua them could be produced in any court nor could any information be disclosed on the basis thereof. With effect from April 1, 1967, the Board or any other income-tax authority specified by it has been authorised to furnish information from the assessment records of the income-tax department to certain classes of officers mentioned in subclauses (i) and (ii) of clause (a) of section 138(1). The officers mentioned in these sub-clauses do not include a court of law and, therefore, the provisions of these clauses do not apply in this case. However, strong reliance is placed on clause (b) of sub-section (1) of section 138 in support of the plea that even when the court requisitions any record from the income-tax authorities, the matter has to be decided by the Commissioner of Income-tax as to whether that record should be allowed to be produced or not. We are of the opinion that clause (b) of sub-section (1) of section 138 is not amenable to that interpretation. Under this clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the scope of the power of the Commissioner of Income-tax under section 138(1)(b) of the 1961 Act whereunder the Commissioner of Income-tax is authorised to furnish the information asked for only if he is satisfied that it is in the public interest so to do. The court, while asking for the production of any record, has to be satisfied that the summoned record is relevant for the decision of the controversy before it and conducive to the satisfactory administration of justice between the parties in accordance with law. If the legislature had intended that no document from the assessment record of an assessee should be produced in a court without the permission, approval or order of the Commissioner of Income-tax, it could have made such a provision in section 138 of the Act. The repeal of section 137 of the 1961 Act clearly indicates that the legislature thought that it was no more necessary to keep the records of assessment by the income-tax department relating to an assessee as confidential and the bar with regard to the production of any part of the assessment records was removed as far as the courts are concerned. It is abundantly clear that after the repeal of section 137 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot destroy or obliterate that obligation. The provisions of section 54 of the 1922 Act, therefore, continue to have effect in respect of the assessments made thereunder, whether before or after the coming into force of the 1961 Act, irrespective of its repeal by section 297(1) of the 1961 Act. A fortiori all assessments under the 1961 Act up to the 31st day of March, 1964, will continue to be governed by the provisions of section 137 of that Act irrespective of its repeal with effect from the 1st day of April, 1964, as the obligation to keep the records mentioned in that section as confidential and not to disclose any information relating thereto or derived therefrom was incurred on the date or dates when the assessment records were prepared prior to April 1, 1964, and that obligation cannot be said to have been done away with by the repeal of section 137. Therefore, no information from the assessment records of an assessee prepared before April 1, 1964, under the provisions of the 1961 Act can be disclosed by the income-tax authorities or any public servant nor can the records of those assessments be produced in a court of law or before any officer of the Government except to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinue to apply notwithstanding its repeal by the Finance Act, 1964. 4. Section 138 of the 1961 Act, as amended from time to time, only enables the Commissioner of Income-tax to disclose certain information to (a) public officers, and (b) any other person as specified therein and this section does not apply to the power of the courts to require the production of the assessment records or the disclosure of any information therefrom. Of course, the Commissioner of Income-tax or any other competent authority shall be free to claim privilege under sections 123 and 124 of the Indian Evidence Act, 1872, which will be determined by the court. 5. It is open to the Central Government to grant protection to any class of assessees, etc., under section 138(2) of the 1961 Act by an order notified in the Official Gazette, from disclosure of any information derived from their assessment records or production thereof before a court, or any other officer or authority. It is not clear from the order of the learned lower court as to what was the year of assessment in respect of which the record was summoned. At the hearing of this petition, the learned counsel for the petitioner has stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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