2022 (9) TMI 113 - HC - Income Tax

Disclosure of information respecting assessee u/s 138 (1) (b) - information 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 HELD THAT - Sub-Section 1 (a) provides for the Board or any other Income Tax Authority to furnish or cause to be furnished any information in its/their possession to an officer under the Foreign Exchange Management Act, 1999 or any other Officer/Authority or body performing functions under any other law as may be prescribed by the Central Government, having regard to public interest, and to enable the Officer/Authority/body concerned to perform their functions under that law. Clause (b) of Section 138 (1) entitles 'any person' to make an application to the Principal Chief Commissioner or Chief Commissioner, information relating to any other assessee and the Authority concerned, if it is satisfied that it is in 'public interest', may supply such information of his decision to supply such information shall be final and not be called in question in any Court of law. A copy of the application filed by the petitioner read with order dated 13.07.2022 does not reveal any flaw in the satisfaction exercised by the Officer/Authority/body concerned in passing the order. Clause (b) of Section 138 (1) states that the requisite information as sought for by the applicant may be furnished if the Officer were to be 'satisfied' that it is in 'public interest' to do so. Since the authority in this case has categorically set out its satisfaction to the effect that furnishing of information is not in 'public interest', assigning reasons for the same, stating that the material sought for appears only to be for settlement of personal disputes between the parties, find no flaw in the order and no cause to interfere in the subjective satisfaction of the Officer. The requirement of personal hearing prior to disposal of the request for information, as the consideration of the request is based upon the application, seeking information and the satisfaction of the Officer. It is only when the application filed is unclear or the authority requires further information that the question of calling upon the applicant will arise and the Mandamus as sought for is not liable to be issued.

Summary

Issues:
1. Mandamus sought to direct the Principal Chief Commissioner of Income Tax and the Income Tax Officer to dispose of applications under Section 138(1)(b) of the Income Tax Act, 1961.
2. Interpretation of Section 138(1)(b) regarding disclosure of information respecting assessees.
3. Rejection of petitioner's application on grounds of public interest.
4. Examination of the satisfaction exercised by the Officer/Authority/body concerned in passing the order.
5. Assessment of whether the disclosure of information is in the public interest.

Analysis:
1. The petitioner sought a mandamus to direct the Principal Chief Commissioner of Income Tax and the Income Tax Officer to dispose of applications under Section 138(1)(b) of the Income Tax Act, 1961. The court noted that the petitioner had filed writ petitions in 2019, and the matter was heard in 2022. The court ordered a counter to be filed by the authorities as a final opportunity before the next hearing date.

2. The interpretation of Section 138(1)(b) was crucial in this case. The respondents initially took a stand that any person could approach the authorities for information relating to any assessee, subject to the authorities' discretion. However, a subsequent counter filed by the authorities stated that the Officer rejected the petitioner's application on the grounds that it did not satisfy the precondition of public interest for disclosing the information.

3. The rejection of the petitioner's application based on the lack of public interest was a significant issue. The court examined the order passed on 13.07.2022, where the Officer detailed the reasons for rejecting the application. The Officer concluded that the information sought appeared to be for personal considerations and not in the public interest, as required by Section 138(1)(b) of the IT Act.

4. The court further analyzed the satisfaction exercised by the Officer in passing the order. It was noted that the Officer's decision to reject the application was based on the lack of public interest, as the information sought seemed to be related to personal disputes between parties. The court found no flaw in the Officer's subjective satisfaction and concluded that the requirement of a personal hearing prior to disposal of the request was not necessary in this case.

5. Finally, the court assessed whether the disclosure of information was in the public interest. The court upheld the Officer's decision that the disclosure of financial information of third parties assessed by the department, as sought by the petitioner, was not in the public interest. The court dismissed the writ petitions, stating that the mandamus sought was not liable to be issued based on the circumstances presented in the case.