1973 (12) TMI 4 - HC - Income Tax

Scope and effect of the provisions in sections 54 and 59B of the Indian Income-tax Act, 1922, and sections 137 and 138 of the Income-tax Act, 1961 - position of law relating to privilege after April 1, 1964 - 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? - whether the confidential nature of the aforesaid documents, records, etc., and the prohibition against their being required by a court to be produced or evidence thereof to be given as well as the liability of a public servant to be punished for disclosure of the particulars contained in the documents, records, etc, continued to subsist even after April 1, 1962, with effect from which date the Indian Income-tax Act, 1922, had been repealed and the Income-tax Act, 1961, came into force

Issues Involved:

1. Position of law relating to privilege prior to 1964.
2. Position of law relating to privilege after 1964.
3. Effect of the production of certified copies relating to income-tax assessment records and their admissibility in evidence.

Detailed Analysis:

1. Position of Law Relating to Privilege Prior to 1964:

Issue 1(a): Where documents, records, etc., were filed by an assessee or a third party before April 1, 1962, in respect of assessment years up to and including the assessment year 1961-62 in proceedings under the Indian Income-tax Act, 1922.

The court held that section 54 of the Indian Income-tax Act, 1922, declared such documents as confidential and prohibited courts from requiring their production or evidence thereof. This prohibition was absolute, as emphasized by the Supreme Court in *Charu Chandra Kundu v. Gurupada Ghosh* and *Commissioner of Income-tax v. Laxmichand Narayandas*. The confidential nature and prohibition continued even after the repeal of the 1922 Act by the 1961 Act due to section 6(c) of the General Clauses Act, 1897, which protects rights, privileges, obligations, or liabilities acquired under the repealed enactment unless a different intention appears in the new enactment. The court found no such contrary intention in the 1961 Act, as sections 137 and 138 of the new Act were almost identical to sections 54 and 59B of the old Act.

Issue 1(b): Where 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 the assessment year 1961-62 in proceedings under the Indian Income-tax Act, 1922.

The court held that sections 54 and 59B of the Indian Income-tax Act, 1922, continued to apply as the documents were filed in assessment proceedings taking place under the 1922 Act, despite the new Act coming into force.

Issue 1(c): Where 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 the assessment year 1961-62 in proceedings under the Income-tax Act, 1961.

The court held that the provisions of sections 137 and 138 of the 1961 Act applied. The declaration of confidentiality and prohibition against court production continued under section 137(1) and (2) of the 1961 Act, similar to section 54 of the 1922 Act.

Issue 1(d): Where documents, records, etc., were filed by an assessee or a third party after April 1, 1962, but before April 1, 1964, in respect of the assessment years 1962-63 and 1963-64 in proceedings under the Income-tax Act, 1961.

The court held that the provisions of sections 137 and 138 of the 1961 Act applied, similar to the answer for issue 1(c).

2. Position of Law Relating to Privilege After 1964:

Issue 2(a): Where documents, records, etc., were filed by an assessee or a third party after April 1, 1964, in respect of assessment years up to and including the assessment year 1961-62 in proceedings under the Indian Income-tax Act, 1922.

The court held that sections 54 and 59B of the Indian Income-tax Act, 1922, continued to apply, and the position in law remained the same as stated in issues 1(a) and 1(b).

Issue 2(b): Where documents, records, etc., were filed by an assessee or a third party after April 1, 1964, in respect of assessment years up to and including the assessment year 1961-62 in proceedings under the Income-tax Act, 1961.

The court held that section 138(1) and (2) as substituted by the Finance Act, 1964, or section 138(1)(a) and (b) and (2) as substituted by the Finance Act, 1967, applied. There was no longer any declaration of confidentiality or prohibition against courts or public servants. The court could summon documents, but the Commissioner of Income-tax could decide if their production was in the public interest, and his decision was final.

Issue 2(c): Where documents, records, etc., were filed by an assessee or a third party after April 1, 1964, in respect of assessment years 1962-63 and 1963-64 in proceedings under the Income-tax Act, 1961.

The court held that the answer was the same as for issue 2(b).

Issue 2(d): Where documents, records, etc., were filed by an assessee or a third party after April 1, 1964, in respect of assessment years 1964-65 onwards.

The court held that the answer was the same as for issue 2(b).

3. Effect of the Production of Certified Copies Relating to Income-tax Assessment Records and Their Admissibility in Evidence:

The court did not provide a general answer to this issue, stating that the admissibility and effect of certified copies must be considered with respect to particular documents. The arguments regarding the subsistence of privilege and the admissibility of certified copies as public documents depend on the specific facts of each document, such as when it was filed, to which assessment year it relates, and under which Act the assessment proceeding was taking place. The court refrained from expressing an opinion on this issue without reference to specific documents.

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