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TMI Blog1975 (7) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... , the 1st defendant. On his death, under the Hindu Women's Rights to Property Act, one-third share of Bapa Rao in the joint family properties devolved on his widow, the 1st plaintiff. After the death of Bapa Rao also, the family continued to be joint and the family business increased enormously and the family prospered till September 26, 1959, when Appanna, the father, died. After the death of Appanna, his son, the 1st defendant, and daughters, 5th and 6th defendants, and the two plaintiffs became entitled to his one-third share in the joint family properties. After the death of Appanna, the 1st defendant became the family manager. The plaintiffs together became entitled to 25/60ths share in the entire joint family properties. The defence set up in the suit is that after the death of Bapa Rao during the lifetime of the father, Appanna, they became divided and partitioned their house properties and other movable property into three equal shares and the three branches took possession of their respective shares. As regards the landed property owned by the joint family, the sharers agreed to keep the same jointly and accordingly the lands were kept joint and the rest of the properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that unless a different intention appears, the repeal of an enactment shall not affect any fight, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. In this connection the learned Advocate-General has brought to my notice some decided cases of other High Courts, which expressed conflicting opinions. On the ground that this court has not dealt with the matter previously and that the question involved being an important one which may arise often and, therefore, it is desirable to have an authoritative pronouncement of this court, he has submitted that this revision petition may be referred to a Bench for decision in the matter. In the decision in Income-tax Officer v. P. Ramaratnam , it was held by the Madras High Court (single judge : Sadasivam J.), that the privilege of non-production as provided under the repealed section 137 of the Income-tax Act was not saved under section 6(c) of the General Clauses Act, 1897, because of the contrary intention as expressed by introducing modified restriction under section 138(2) introduced by the same Act, wherein it is provided that, notwithstanding anything contained in sub-section (1) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 137 does not necessarily lead to the conclusion that it was the intention of the legislature to do away with the rights and obligations created under or by the omitted section. Section 138 also is not incompatible or inconsistent with the effect of. section 137 being continued notwithstanding its omission. The legislature, therefore, did not indicate its intention to destroy the effect of section 54 of the old Act by deleting section 137 from or amending section 138 of the new Act. In the decision in Daulat Ram v Somnath, it was held by the Delhi High Court that the privilege against disclosure continues after the repeal of the 1922 Act and after the repeal of section 137 of the 1961 Act, in view of section 6(c) of the General Clauses Act, 1897. It was further held that subsequent legislation did not reveal an intention to destroy the privilege which had accrued in respect of documents filed at a time when section 54 was in force. It was also held in that case that the Commissioner of Income-tax was made, under section 138, the sole authority to decide whether it was in the public interest or not to furnish the information asked for and it is for the Commissioner to decide wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isposed of as early as possible. Accordingly, I direct the papers to be placed before the hon'ble the Chief justice for necessary orders. JUDGMENT The judgment of the Court was delivered by SAMBASIVA RAO ACTG. C.J.--This revision petition has come to a Division Bench on a reference made by our learned brother, Ramachandra Raju J. The question which prompted this is whether a civil court trying a suit can summon from the income-tax authorities income-tax returns, assessment orders and other relevant records to be produced before it and receive them in evidence. The provisions of the Income-tax Act relating to this have undergone changes more than once and several High Courts in the country have expressed varying and conflicting opinions. We are told that neither the Supreme Court nor this court has considered this aspect. In view of the importance of the question to the income-tax department also, we have directed notice to its standing counsel, Sri P. Rama Rao, and in response he has, appeared and represented the department's, point of view. The facts of the case are simple and undisputed. A suit has been filed for partition by the wife and daughter of one late Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as exhibits without any proof of their contents. In the result, it held that the returns and the assessment orders, which had been produced by the department in response to the summons, can be marked through P.W. 1. The necessary implication of this decision is patent. Obviously, in the opinion of the learned Subordinate judge, these returns and the assessment orders can be received in evidence. Defendants Nos. 1 to 3 have preferred this revision petition. The arguments of Sri P. Ramachandra Reddy, learned Advocate-General for the petitioners, may be summarised as follows. Section 54 of the 1922 Income-tax Act was replaced by section 137 of the 1961 Act. They lay down an unqualified embargo on courts to call for any records relating to any assessment from any Income-tax Officer and on any Income-tax Officer giving evidence relating thereto. In fact, these enactments provide for penalties on Income-tax Officers if they disclose any information relating to assessments. It is no doubt true that section 137 and the provision relating to penalty were deleted with effect from April 1, 1964. But in 1967, an amendment was introduced whereunder the entire section was recast. A new pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion against the Income-tax Officer giving any evidence is also deleted, there is no prohibition against the court summoning the records relating to assessments from Income-tax Offices. It is not a case of certified copies being filed. The court has summoned the original records and there is no prohibition against this course of action. In the Income-tax Act, as it now obtains these records, which are sent up to the court, are admissible in evidence. He also points out that this aspect of the matter was not before the lower court. What the lower court was concerned with was whether P. W. 1 could give formal proof of these records when he had no connection whatever with the assessments. These assessment records are originals which are, within the meaning of the Evidence Act, public documents. So, they do not require any further proof. It can be seen from these arguments that the crucial question that has to be answered is whether, as the law is now in vogue, a civil court can summon original records relating to assessments from Income-tax Offices. We first endeavour to find an answer to this problem by examining the relevant provisions of the two Income-tax Acts, that of 1922 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1960, a new provision numbered as section 59B enables the Commissioner of Income-tax, notwithstanding anything contained in section 54, to furnish information as to the amount of tax determined as payable by any assessee. But, that is only in respect of any assessment made on or after the 1st day of April, 1960. Before he does it, he should satisfy himself that there are no circumstances justifying the refusal of an application made to him by a person. This Act of 1922 was repealed by the Act of 1961, which came into force from April 1, 1962. Sections 137 and 138, which are as hereunder, substantially contain the same prohibitions and confer same power on the Income-tax Commissioner to disclose information as to the amount of tax determined in respect of any assessment made on or after the 1st day of April, 1960. " 137. Disclosure of information prohibited.--(1) All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of this Act, or in any evidence given, or affidavit or deposition made in the course of any proceedings under this Act, other than proceedings under Chapter XXII, or in any record of any assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authorities as may be specified in the order." These provisions, as we have pointed out above, came into force on and from April 1, 1964. It is of the greatest significance that section 137 is altogether omitted, with the result that the declaration of the confidential nature of the assessment records, the embargo against a court requiring any public servant to produce such records or to give evidence before it in respect thereof and the prohibition against a public servant making a disclosure of any particulars in the said documents have all been totally omitted. At the same time, the scope of section 138, as it stood in the original Act of 196l, is altered. In the original section 138, a person could make an application to a Commissioner seeking information as to the amount of tax determined as payable by an assessee while under the altered section a person could make such an application to the Commissioner for any information relating to any assessee. There are no limitations prescribed on any information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this behalf shall be final and shall not be called in question in any court of law," It can be seen that sub-section (1) of section 138 is reproduced in clause (b) of the new sub-section. Clause (a) empowers the Board or any other income-tax, authority specified by the Board in that behalf to furnish or cause to be furnished information relating to any assessee to such officer, authority or body as was mentioned in the clause. This is where the material provisions rest up till now. A plain reading of these provisions starting with section 54 of the 1922 Act and resting with the present section 138 clearly shows that there is now no more an embargo on a court from requiring any public servant to produce before it any record relating to an assessment or to give evidence before it in respect thereof. It is true that as and from April 1, 1964, while this embargo has disappeared, a new provision has come into being which enables a person to make an application to the Commissioner for information relating to any assessee in respect of any assessment made on or after the 1st day of April, 1960. Learned Advocate-General argues that when any person can approach the Commissioner wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non-obstante clause continued, the provisions of the Indian Evidence Act could not be invoked. Now that the non-obstante clause is taken away, the Indian Evidence Act applies to the procedure before court in its fullness and entirety. Reading the provisions we are convinced that the deletion of section 137, which corresponded to the original section 54, is very meaningful, leading to the inescapable conclusion that there is now no more prohibition against a court calling for the records when it acts under the provisions of the Indian Evidence Act. The question can be examined from another perspective also. 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 two private parties cannot be called "public interest". It may be in the interest of justice-justice between the plaintiff and the defendant-but it cannot be called "public Interest". So, as we understand clause (b) of new section 138(1), the Commissioner's power to furnish any information to any assessee is limited only where public interest is concerned. In private disputes, necessarily, the provisions of the Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 137 of the 1961 Act against disclosure of any material relating to assessments and so the omission, which is tantamount to repeal, cannot be considered to affect that privilege which was acquired or accrued in the department and the assessee in respect of assessment records. He further attempts to point out that there is no different intention appearing in the new section 138 which takes away that acquired or accrued privilege. So, when these provision were repealed with effect from April 1, 1964, the privilege continued. Sri P. Rama Rao, learned standing counsel for the department, contends that section 6 has no application to the omission of a provision. It has been specifically omitted. There is a vital difference between omission and repeal both of them leading to different consequences. If there is repeal, then section 6 of the General Clauses Act and other consequences can be invoked. But such is not the case with an omission. We need not spend much time on this aspect of the matter because there is a ruling of the Supreme Court itself on this point in Rayala Corporation (P.) Ltd. v. Director of Enforcement, to which our attention is invited by Sri Rama Rao. There, rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that section on 3rd June, 1965. The learned Subordinate judge upheld this contention. The plaintiff went to the High Court in a revision petition under section 115 of the Civil Procedure Code. The matter was finally referred to a Full Bench and it held that section 138 of the Income-tax Act, 1961, as amended from time to time, only enables the Commissioner of Income-tax to disclose certain information to public officers and any other person as specified therein and does not apply to the power of the courts to require the production of the assessment records or the disclosure of any information therefrom. Assessment records of an assessee prepared after 1st April, 1964, under the Act will not, therefore, be immune from production in a court of law and the disclosure of any information from that record can also be made by the Commissioner of Income-tax to any person making an application therefor under section 138(1)(b) of the Act. At the same time, it was pointed out that it is open to the Commissioner of Income-tax to claim privilege of any documents and notes forming part of the record under the, provisions of sections 123 and 124 of the Indian Evidence Act, 1872. With this propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 1964 ? (2) What is the position of law relating to privilege after 1964 ? and (3) 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 ? " On a very elaborate consideration of the provisions of the law and the case law, the Full Bench, for which Tatachari J. (as he then was) spoke, hold that the declaration of such records being of confidential nature and the prohibition against a court requiring any public servant to produce before it any such document or to give evidence before it in respect thereof contained in section 137(1) and the prohibition against a public servant disclosing any particulars laid down in section 137(2) remained unaffected and continued to subsist notwithstanding the omission of section 137 and the amendments of section 137 on 1st April, 1964, and 1st April, 1967. It was further held ) that the position in law is the same where such documents were filed by an assessee or a third party after 1st April, 1962, but before 1st April, 1964, in respect of assessment years 1962-63 and 1963-64. Likewise, it was held that where records were filed in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is for the Income-tax Commissioner to decide whether it would be in the public interest to produce or furnish the records summoned and if he is satisfied that its production would not be in the public interest, his decision is final and is binding on the court as well. We are unable to read the significance of the omission of section 137 from the Act and the re-casting of section 138 and the import of section 138(1)(b) in the like manner as the Full Bench has done. . We have given our reasons at length for this conclusion. To broadly summarise them here for the purpose of indicating our respectful disagreement with the Delhi High Court Full Bench view on this aspect of the matter, with the omission of section 137 the confidential nature of income-tax records and a prohibition against a court summoning for such records from the income-tax office are no more in existence. To that extent, the Full Bench also agrees. Once the bar against a court summoning the records is removed, the ordinary provisions of the general law and of the Evidence Act, in particular, would prevail. If the court thinks it necessary to summon the records it might do so. But section 138(1)(b) does not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the production of documents in court. In that view, the learned judge held that the Fifth Presidency Magistrate was right in directing the petitioner (Income-tax Officer, Central Circle I, Madras) to produce the documents and there was no ground to interfere in revision. Then there is the Bench decision of Veeraswamy J. (as he then was) and Krishnaswamy Reddy J.in VE. V. Sivagami Achi v. YR.VE.YR. Ramanathan Chettiar. The learned judges were considering the effect of the omission of section 137. They proceeded on the assumption that omission of a section in the statute book is tantamount to a repeal. Then they proceeded to consider the effect of section 6 of the General Clauses Act. The Division Bench agreed with the opinion of Venkataraman J. in the first case above referred to, in saying that section 138(2). does not contain any intention so as to eliminate the application of section 6. They finally expressed the opinion that section 6(c), which is the only clause relied on for the revenue, is not attracted to the omission of section 137 with the consequence that the general effect of repeal without reference to section (6)(c) will apply. In the result, they set aside the view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the omission of section 137 of the Income-tax Act, 1961, with effect from April 1, 1964, by the Finance Act, 1964, there is no ban on a court calling for production of the income-tax assessment records of an assessee for any period subsequent to April 1, 1964. Likewise, it was decided in the Patna case 4 that after the repeal of section 137 (the learned judge thought that section 137 was repealed by Act V of 1964), there cannot be any impediment in the way, of a civil court in directing production of documents which were filed before an Income-tax Officer. Sri P. V. R. Sarma relies on A. S. N. M. Idris Ambalam v. M. Abdul Hakim 5, where a learned single judge of the Madras High Court decided that interrogatories to the parties can be put in respect of income-tax assessments. But, in that case the court's power to summon records from the Income-tax Officer was left open. In Chinnammal v. Kumudhini 6 it was decided that there was no bar against voluntary disclosure of income-tax information. Sri Sarma also distinguishes the decisions, on which the learned Advocate-General has relied, on the ground that in all of them the department itself claimed the privilege and also on the furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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