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TMI Blog1986 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... it was difficult for him to obtain the certified copy of the order of assessment and that the order would show the amount realised by the plaintiff from his partnership business. The lower court held that the civil court had no jurisdiction to summon the income-tax assessment order and that in any case, the defendant could get the certified copies from the Income-tax Department itself and thus there was no necessity to issue any summons for the production of the document. A question of jurisdiction arises and, therefore, it is necessary to refer to the statutory provisions, the legislative history and the relevant decisions of other courts. The Indian Income-tax Act, 1922, in section 54 declared that the particulars in any record of any assessment proceeding prepared for the purposes of the Income-tax Act shall be treated as confidential and that, notwithstanding anything contained in the Evidence Act, no court, except as provided in that Act, " be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of such record, or to give evidence before it in respect thereof ". Any disclosure contrary to the Act was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify by notification in the Official Gazette in this behalf, any such information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922 (11 of 1922), as may, 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. (b) Where a person makes an application to the Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922 (11 of 1922), on or after the 1st day of April, 1960, the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law. (2) Notwithstanding anything contained in sub-section (1) or any other law for the time being in force, the Central Government may, having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic interest so to do (section 138(1)(b)). Thirdly, the Central Government may direct by notification in the Gazette that no information or document shall be furnished or produced (a) in respect of such matters relating to any specific class of assessees, and (b) except to the authorities specified in the notification, having regard to practices and usages customary or any other relevant factors (section 138(2)). By virtue of the powers conferred under section 138(2), two notifications have been issued, in S.O. No. 2048 dated June 23, 1965, and in. S.O. No. 1043 dated March 30, 1966, and these notifications apply only to the assessees, being banking companies, under the Banking Regulation Act or the Banking Companies Act. This is supported by authority (See B. A. Bajaj v. Gulam Mohiuddin M. Sayyed [1983] 140 ITR 460 (Bom). The assessment particulars of these banking-companies-assessees cannot be summoned by the civil courts except where the Government or the. Income-tax Department is a party. There is thus no other notification which prohibits information or documents relating to an assessee under the Income-tax Act being furnished to a court. A statutory notification under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, made the decision of the Commissioner final and unquestionable in a court of law. When two powers are thus vested in two legal authorities, neither of them can be ignored, and both of them have to be reconciled and given effect to. In the case of the two powers under consideration, it has to be noted that the power to summon which vests in a court is under the general law, while the power of the Commissioner has been conferred upon him by special law and has, therefore, to prevail over the former. In view of the same, it has to be held that while it is open to a court to summon the documents, records, etc., from the Income-tax Commissioner it is equally open to the Commissioner on receiving the summons to consider whether the production/furnishing of the documents, records, etc., would be in the public-interest, and submit the same to the court, in answer to the summons." In Pentakota Surya Appa Rao v. Pentakota Seethayamma [1976] 103 ITR 222, a Division Bench of the Andhra Pradesh High Court held thus (p. 236): "As the section 138 now stands, the Commissioner can furnish any information only if he is satisfied that it is in the public interest so to do. A dispute between tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions 54 and 59B of the 1922 Act and the corresponding sections 137 and 138 of the next Act were not overlapping and dealing with the same matter. One laid down the principle relating to the court's power to call for evidence for the purpose of a particular litigation and the other in regard to the right of a person not necessarily a party to a case seeking certain information. Although the matters dealt with are allied, the sections cover separate fields. In neither case, the right of a person in regard to calling for the tax documents of another or seeking information was or is, at any point of time, uncontrolled. In one case, the discretion of the Commissioner has been expressly mentioned in the section and in the other the discretion of the courts is implied. It must be presumed that a court shall not grant a prayer where it amounts to an abuse of the process, of the court. Of course the discretion of the, two authorities has to be exercised differently in accordance with the scope and purpose. It is, therefore, futile to suggest that in substance although the embargo on the court's power has been lifted by repeal of section 137, the repeal should be ignored and not given effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court would be required to reconsider the matter afresh in accordance with law." The assessment proceedings under the Income-tax Act are personal to the assessees. These are not documents available for public scrutiny in the ordinary course. Income-tax proceedings postulate a sense of confidence being reposed in the authorities, and a disclosure of confidential matters connected with the income and assets of the assessees in the sure belief that the information so supplied will not be disclosed to other persons. The confidentiality of the proceedings before the incometax authorities existed even before the statute declared that they have to be treated as confidential. The provision in section 137 corresponding to section 54 of the 1922 Act was thus merely declaratory of an existinstate of affairs and did not create new rights or privileges for the first time. A declaration under the Income-tax Act that these documents have to be treated as confidential was required only to statutorily prohibit a court from summoning these documents. More than that, section 137 did not achieve. The fact that the income-tax return or the assessment under the Act was a confidential document did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng section 54 of the 1922 Act observed thus in Venkataramana v. Varahalu, AIR 1940 Madras 308, 313 : "Even assuming that the strict view taken in Amway Ali v. Tafozal Ahmed, AIR 1925 Rang. 84 ; 2 Rang 391, is correct, it is difficult to see anything illegal in the grant of copies of such documents to the assessee himself. The use of the word disclosure in clause (2) of section 54, Income-tax Act implies that the disclosure must be to a stranger and not to the party who made the statement. Where one partner makes statement on behalf of the partnership, we do not think it reasonable to hold that the grant of copies of that statement to other members of the partnership is illegal." It is in this context that section 138(1)(b) is relevant for our purpose. It provides that the Commissioner may furnish any information in respect of any assessment, on any application made by any person, if he is satisfied that it is in the public interest so to do. He cannot thus arbitrarily reject the application and his rejection will have to be supported by reasons to justify that public interest demanded a rejection of the request. When the right to obtain information about all assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alcutta High Court (when section 54 of the 1922 Act was in force) in Promatha Nath v. Nirode Chandra, AIR 1940 Cal 187, 188: " It may be that in the case of a sole assessee there is no objection to his using the copy so obtained as evidence in legal proceedings if there are no other objections to its admissibility. It may reasonably be said that the provision that an assessment order shall be treated as confidential is a privilege which an assessee may waive if he thinks it fit to do so. However, it would be a startling thing if a joint assessee were to be permitted to use the copy of such an order to the detriment of his co-assessee in contentious proceedings between them if a person who has been assessed to income-tax can object to the materials in the possession of the Income-tax Department being disclosed, it is surely a matter of indifference whether the person who desires to make them public is a co-assessee or a stranger." The petitioner has no case that he was jointly assessed. The petitioner has no case that he applied under section 138(1)(b). He files an application to the court without exhausting his remedies available under the income-tax law. He seems to fish for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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