1966 (8) TMI 5 - HC - Income Tax

This revision arises out of an application made by the plaintiff in a suit for the production by the Income-tax Officer of certain assessment proceedings relating to the first defendant in the suit - held that section 6(c) of the General Clauses Act which is the only clause relied on for the revenue is not attracted to the omission of section 137. The consequence is that the general effect of repeal without reference to section 6(c) will apply

Issues Involved:
1. Effect of the repeal of Section 137 of the Income-tax Act, 1961.
2. Applicability of Section 6 of the General Clauses Act, 1897, to the repeal of Section 137.
3. Confidentiality and disclosure of documents filed during assessment proceedings.
4. Interpretation of Sections 54 of the Income-tax Act, 1922, and Sections 137 and 138 of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Effect of the repeal of Section 137 of the Income-tax Act, 1961:
The court examined the implications of the repeal of Section 137 by the Finance Act, 1964. The omission of Section 137 resulted in the removal of the general declaration of confidentiality for particulars contained in documents filed during assessment proceedings. Consequently, the bar on courts from summoning such particulars was lifted, and the prohibition against public servants disclosing these particulars also disappeared. The court noted that no order had been notified under Section 138(2) to specify any particulars as confidential, thus reinforcing the effect of the repeal.

2. Applicability of Section 6 of the General Clauses Act, 1897, to the repeal of Section 137:
The court discussed the application of Section 6 of the General Clauses Act, which preserves rights, privileges, obligations, or liabilities acquired or incurred under repealed enactments unless a contrary intention appears. The court referred to the Supreme Court's guidance in State of Punjab v. Mohar Singh, emphasizing that Section 6 applies unless the new legislation indicates an intention to destroy old rights and liabilities. The court found that the omission of Section 137 did not manifest such an intention and that Section 138(2) did not indicate any incompatibility with the continued application of Section 6.

3. Confidentiality and disclosure of documents filed during assessment proceedings:
The court analyzed whether Section 137 created any specific rights, obligations, or privileges that could be preserved under Section 6 of the General Clauses Act. It concluded that Section 137 did not create any such rights or obligations. The confidentiality directed by Section 137 was a matter of public policy rather than an individual right or obligation. The court held that the prohibition against disclosure and the bar on courts from summoning particulars were not obligations incurred or rights acquired within the meaning of Section 6(c) of the General Clauses Act.

4. Interpretation of Sections 54 of the Income-tax Act, 1922, and Sections 137 and 138 of the Income-tax Act, 1961:
The court compared Section 54 of the Income-tax Act, 1922, with Sections 137 and 138 of the Income-tax Act, 1961. It noted that Section 137(1) of the 1961 Act was identical to Section 54(1) of the 1922 Act, while Section 138, as modified by the Finance Act, 1964, had limited scope and did not re-enact the confidentiality provisions of Section 137. The court concluded that the omission of Section 137 did not attract Section 6(c) of the General Clauses Act, as the confidentiality provisions did not create specific rights or obligations.

Conclusion:
The court allowed the petition, holding that the Subordinate Judge's conclusion was incorrect. It directed the lower court to take suitable steps to summon the relevant records, as the general effect of the repeal applied without the preservation of any rights or obligations under Section 6(c) of the General Clauses Act.

Petition allowed.

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