1973 (5) TMI 20 - HC - Income Tax

Whether the protection granted u/s 54 of 1922 Act or section 137 of 1961 Act, for the assessment records by the repealed provisions continue after repeal ? held yes - the protection available, would still be available to the documents produced for the assessment years relating to the period prior to the repeal of these provisions. Such documents cannot be summoned by a court

Issues Involved:
1. Whether the trial judge had jurisdiction to order the production of income-tax documents.
2. The applicability of Section 54 of the Income-tax Act, 1922, and Section 137 of the Income-tax Act, 1961, post their repeal.
3. The interpretation of Section 138 of the Income-tax Act, 1961.
4. The applicability of Section 6 of the General Clauses Act in the context of repealed provisions.

Detailed Analysis:

1. Jurisdiction to Order Production of Income-tax Documents:
The plaintiff sought the production of the defendant's income-tax records for the assessment years 1954-55 to 1964-65. The defendant objected, citing a statutory bar under the Income-tax Act and the Orissa Sales Tax Act. The trial judge allowed the production of income-tax documents but rejected the request for sales tax documents. The defendant challenged this order, arguing that the court lacked jurisdiction due to statutory prohibitions.

2. Applicability of Section 54 and Section 137 Post-Repeal:
Section 54 of the Income-tax Act, 1922, and Section 137 of the Income-tax Act, 1961, prohibited the disclosure of certain information. These sections were repealed by the Finance Act of 1964. The court had to determine whether the protection against disclosure continued post-repeal. The court examined precedents and concluded that the protection extended to documents related to assessment years before the repeal. This conclusion was based on the principle that unless a contrary intention is evident, the repeal of a provision does not negate existing protections (as per Section 6 of the General Clauses Act).

3. Interpretation of Section 138 of the Income-tax Act, 1961:
Section 138 deals with the disclosure of information by income-tax authorities. The trial judge relied on a precedent (Digambar Bhuyan v. Nityananda Sahoo) to justify the order. However, the court clarified that Section 138 does not empower courts to summon records; it only allows income-tax authorities to disclose information at their discretion. Thus, the trial judge's reliance on this section was misplaced.

4. Applicability of Section 6 of the General Clauses Act:
The court discussed the applicability of Section 6 of the General Clauses Act, which preserves rights and liabilities unless a contrary intention is evident in the repealing statute. The court referenced several judgments, including those from the Madras, Delhi, and Punjab High Courts, which supported the view that protections under the repealed sections continued. The court found no contrary intention in the Finance Act of 1964 or the amended Section 138 to negate these protections.

Conclusion:
The court held that the trial judge erred in ordering the production of income-tax documents, as the statutory bar under the repealed sections still applied. The impugned order was quashed, and the civil revision was allowed. The court also clarified that it had jurisdiction under Section 115 of the Code of Civil Procedure to interfere, as the trial judge had exercised jurisdiction not vested in him.

Final Order:
The civil revision is allowed, the direction of the trial judge regarding the summoning of documents from the Income-tax Officer is set aside, and no order as to costs is made.

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