1961 (5) TMI 5 - SC - Income Tax

Whether certified copies of statements recorded or orders passed by the income-tax authorities were admissible in evidence under section 65 of the Evidence Act to prove the contents of those documents? Held that - The Subordinate Judge expressly recorded in the proceeding dated November 18, 1955, that he did not mean to say that certified copy of the document will not be admissible in evidence at the time of the trial of the suit if the said certified copy is otherwise found to be admissible in evidence. Appeal dismissed.

Summary

Issues:
1. Interpretation of Section 54 of the Income-tax Act regarding confidentiality of information disclosed during income-tax proceedings.
2. Whether a waiver by the assessee of the privilege under Section 54 renders the prohibition inoperative.
3. Admissibility of certified copies of statements made before income-tax authorities in court proceedings.

Analysis:

The case involved a dispute between the respondent and the appellant regarding a loan and repayment. The appellant sought to produce a statement made by the respondent before the Income-tax Officer in support of his defense. However, the Commissioner of Income-tax objected, citing Section 54 of the Income-tax Act, which prohibits the disclosure of information given during income-tax proceedings. The trial court and the High Court upheld the objection, leading to the appeal before the Supreme Court.

Section 54 of the Income-tax Act mandates that all information disclosed during income-tax proceedings is confidential. It prohibits courts from requiring public servants to produce such information or give evidence about it. The Court noted that the statement made by the respondent did not fall under the exemptions listed in the Act. Therefore, the Subordinate Judge was correct in rejecting the request to produce the statement.

The appellant argued that Section 54 is designed for the protection of the assessee and can be waived by the assessee, rendering the prohibition inoperative. However, the Court held that there is no provision for such an exception in the legislation. The prohibition imposed by Section 54 is absolute and not affected by any waiver by the assessee.

The appellant relied on previous cases to support the argument that an assessee can waive the privilege under Section 54. However, the Court clarified that those cases dealt with the admissibility of certified copies of statements, not the requirement to produce original statements. The Court emphasized that the admissibility of certified copies in court proceedings was a separate issue from compelling production of original statements.

In conclusion, the Supreme Court dismissed the appeal, affirming the decisions of the lower courts. The Court emphasized the confidentiality provisions of Section 54 and clarified that waivers by the assessee do not override the prohibition on disclosure of information from income-tax proceedings.

This detailed analysis highlights the key legal interpretations and arguments presented in the judgment, focusing on the application of Section 54 of the Income-tax Act and the admissibility of evidence in court proceedings.