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Semakurti Somanna and Others Vs. Vankadari Subbarao and Anothers. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberS.A. No. 280 of 1953
Reported in[1958]33ITR116(AP)
AppellantSemakurti Somanna and Others
RespondentVankadari Subbarao and Anothers.
Excerpt:
.....that in the case before the full bench it was the assessee himself who sought to put the returns in evidence in support of his own case. it is true that sections 67 -73 of the evidence act apply to original documents as well as to the secondary evidence..........judges misunderstood the effect of that section.'if income-tax returns and their annexures are public documents within the meaning of section 74 of the indian evidence act, surely they are admissible, as pointed out by the full bench, under section 65(e) of that act. mr. sankara sastry also urges that such copies can be given by the income-tax officers only to certain specified persons and that copies obtained by others persons in violation of the rules authorising the concerned officers of the income-tax department to grant such copies cannot be used in courts as such user would tend to nullify the provisions of section 54 of the income-tax act. the full bench decision refers to paragraph 85 of the notes and instructions complied by the income-tax department for the guidance of its.....
Judgment:

BHIMASANKARAM, J. - This second appeal arises out Original Suit No. 92 of 1946 on the file of the Court of the Subordinate Judge of Eluru which was a suit instituted by one Seemakurthi Peda Sattemma alias Sattemma whose estate, because of her death pending the litigation, is now represented by the respondents Nos. 1 and 2 in the appeal. The appellants are the second defendant and his sons, defendants Nos. 3,4 and 6. The original plaintiff claimed a sum of Rs. 4,170-3-3 from all the defendants who were six in number on the following allegations :

The plaintiffs deceased husband Subbarayadu and the defendants Nos. 1 and 2 were brothers the other defendants being the sons of the second defendant. The three brothers were partners in a business known as Sri Satyanarayana Rice Mill. The plaintiff deposited with the mill various sums from time to time which were duly credited in the accounts of the mill on the understanding that the moneys so deposited should be paid back to her with interest whenever she demanded. The mill business being a family business of defendants Nos. 1 to 6, all the defendants are liable for the amount due to her. The trial court found that the first defendant was not a partner of the business and decreed the claim against the other defendants on its finding that the moneys were deposited with the firm as alleged by the plaintiff. That decree was confirmed on appeal preferred by the defendants Nos. 2, 3, 4, and 6 by the District Judge, West Godavari. The present second appeal is directed against that appellate decree.

Now the finding as to the liability of the defendants was based primarily upon four documents and they are Exhibits A-5, A-6, A-8 and A-9. Exhibits A-5 and A-8 are certified copies of the income-tax returns of the defendants firm for the years 1945-46 and 1946-47 respectively, while Exhibits A-6 and A-9 are the accompanying statements of account showing the amounts which the firm owed to third parties. It appears from Exhibits A-5 and A-8 that the original of Exhibit A-5 contained the signature of the second defendant while the original of Exhibit A-8 contained the signature of one China Raghavayya who is now admitted to have also been one of the partners of the firm. The second defendant in his evidence denied having submitted any income-tax returns on behalf of the firm though he does not expressly deny that the original of Exhibit A-5 contained his signature. As regards Exhibit A-8 and the accompanying statement of account, he would have it that he does not know anything about it. On these facts, it is urged by Sri Sankara Sastry, learned counsel for the appellants, firstly, that these exhibits are inadmissible in evidence and secondly, that even if they are, there is no proof of the signatures either of the second defendant or of the other partner on the returns and that therefore the relevant entries therein cannot be used as admissions made either by his client or his partner so as to bind the firm. His contention is elaborated thus : Section 54 of the Indian Income-tax Act enacts that all particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of that Act etc. shall be treated as confidential, that on court shall, save 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 any such record or to give evidence before it in respect thereof, and that any public servant disclosing any such particulars shall be punishable with imprisonment extending to six months and shall also be liable to fine. It is argued that there is a policy of the law underlying the section that income-tax returns or statements or particulars therein should not be used as evidence against any person and for any purpose whatsoever.

Reliance is placed by the learned counsel for the appellants upon the decision in Mythili v. Janaki in which a Division Bench of the Madras High Court ruled that an income-tax return was not a 'public document' within the meaning of section 74 of the Indian Evidence Act and a third party who has in some manner come into possession of certified copies of an income-tax return could not use them as evidence in his favour. But it is clear that the authority of this decision undermined by the Full Bench decision in Rama Rao v. Venkataramayya. Leach, C.J., who spoke for the Full Bench pointed out that an income-tax return as well as a statement filed in support of it is a 'public document' within the meaning of section 74 of the Indian Evidence Act, that certified copies thereof would therefore be admissible under section 65(e) of that Act and that though a court is prohibited from requiring a public servant to produce the documents mentioned in section 54 of the Income-tax Act or to give evidence in support of them, it does not follow that the court may not admit in evidence a document which falls within section 54. It is no doubt true that in the case before the Full Bench it was the assessee himself who sought to put the returns in evidence in support of his own case. But I am not prepared to accede to the contention of the appellants learned counsel that the Full Bench decision therefore should be understood as governing only cases where certified copies are sought to be used by the assessee himself. I entertain no doubt that the decision of Burn and Stodart, JJ., in Mythili v. Janaki was overruled, as the head-note in the Full Bench decision points out. The learned Chief Justice after referring to the reasoning of the learned Judges observed as follows :

'In their opinion to allow a person who comes into possession of a certified copy of a return to produce it in court and so prove the contents of the return would be defeating the express provisions of section 54. I have said sufficient to indicate that in my opinion there is nothing in section 54 which prohibits a party from putting in evidence a certified copy of an income-tax return if that return is a public document and that the learned Judges misunderstood the effect of that section.'

If income-tax returns and their annexures are public documents within the meaning of section 74 of the Indian Evidence Act, surely they are admissible, as pointed out by the Full Bench, under section 65(e) of that Act. Mr. Sankara Sastry also urges that such copies can be given by the Income-tax Officers only to certain specified persons and that copies obtained by others persons in violation of the rules authorising the concerned officers of the Income-tax Department to grant such copies cannot be used in courts as such user would tend to nullify the provisions of section 54 of the Income-tax Act. The Full Bench decision refers to paragraph 85 of the Notes and Instructions complied by the Income-tax Department for the guidance of its officers wherein it is stated that 'the following persons shall, in practice, be allowed to inspect or to receive copies; (i) in any case, the person who actually made the return; (ii) any partner (known to be such) in a firm registered or unregistered to whose income the return relates; and (iii) the manager of a Hindu undivided family to whose income the return relates, or any other adult member of the family who has been treated as representing it.'

The argument is that the original plaintiff in the present case was not one of those specified persons in relation to the exhibits filed by her and that the copies were improperly given to her and that therefore they should not be allowed to be used. In the first place, this contention is, it seems to me, opposed to the Full Bench ruling because if, as they have pointed out, the return is a public document there is nothing either in section 54 of the Indian Income-tax Act or section 65 of the Evidence Act which prohibits a party from putting a certified copy of it in evidence. Section 54 is limited in its purpose. As observed by a Divisional Bench of the Bombay High Court in Emperor v. Osman Chotani all that section 54 means is that the Income-tax authorities are to regard communications made to them for the purposes of the Income-tax Act as being confidential, the object being to enable people to feel that they can freely state the facts relating to their income, facts which may often involve confidential matters relating to their business, without fear of the matters being disclosed. If a document can be given in evidence, without requiring a public servant to product it, there is nothing in the section to prevent that from being done. The facts of that case are rather peculiar. Three persons were being charged for the offence of cheating and the account books of the accused from which the charge could be established were not forthcoming. The investigating officer therefore served a summons on the Income-tax Commissioner of Bombay under served section 65 of the Bombay City Police Act requiring him to produce certain documents lodged with the Income-tax Department by one of the accused in connection with his return for income-tax. The Commissioner of Income-tax refused to do so relying upon the provisions of section 54 of the Indian Income-tax Act. The police then carried out a search of the office of the Income-tax Commissioner under section 66 of the Bombay City Police Act and seized some of the documents they wanted. One of the documents so seized was tendered in evidence before the Chief Presidency Magistrate who was trying the case he held that it was inadmissible in evidence on account of section 54 of the Income-tax Act. In revision, it was ruled by the learned Judges that the document was admissible and they declined to accept the contention 'that the effect of holding the police to be entitled to adopt the course they have adopted in this case is to defeat the intention of the Legislature as disclosed in section 54 of the Income-tax Act.'

The learned counsel for the respondents has invited my attention to the decision reported in Buchibai v. Nagpur University and has submitted that the plaintiff in the present case was entitled to obtain copies of the income-tax return of the firm in her capacity as the legal representative of a deceased partner and that the legal representatives of the persons mentioned in paragraph 85 of the notes and instructions quoted above should be held entitled to get such copies. That case treated as admissible in evidence copies obtained by the widow of one of the members of a joint family. The learned Judges held that the widow was a representative of the estate of her husband and was entitled to obtain those copies and following the ruling in Rama Rao v. Venkataramayya held them admissible in evidence as certified copies of public documents. Mr. Sankara Sastry has referred to two other decisions as being in his favour, both of single Judges, the later of them following the earlier. The earlier decision is that of Mockett, J., in Velayudham v. Subramania Pillai in which it was held that an assessee could not be compelled to apply for a certified copy of his income-tax returns and profit and loss statements and produced them for the use of the opposite party. That decision has been followed by Ramaswami Goundar, J., in Nagammai Achi v. Alamelu Achi. But I do not think that those decisions have any bearing on the present discussion.

It may be noticed that certified copies of a public document do not and need not contain any endorsement as to the person who obtained them. If such certified copies are filed they must be admitted in evidence under the Evidence Act 'to prove the existence, condition or contents of such documents' without reference to the person who procured them. I, therefore, reject this contention of the learned counsel for the appellants.

The next argument of Mr. Sankara Sastry for the appellants is that even if the certified copies are admissible, the signatures of the second defendant and Raghavayya on the originals of Exhibits A-5 and A-8 must be proved and no such proof being forthcoming they cannot be used as against the firm. It is true that sections 67 - 73 of the Evidence Act apply to original documents as well as to the secondary evidence thereof. In the present case it is to be noted that these are certified copies of public documents in the custody of a public officer and they may be presumed to be what they purport to be, that is, copies of the income-tax returns and statements made on behalf of the firm to which they relate. It is unnecessary in my opinion to prove the signatures of the particular partners. It cannot be denied that they are copies of income-tax returns relating to the firm and the statements accompanying such returns. That, in my opinion, would be enough to fix the defendants with liability in respect of the suit claim.

The other contention of Mr. Sankara Sastry, that the statements in Exhibits A-6 and A-9 are not tantamount to admissions is, in my opinion, altogether without substance. They are statements made by the firm as to their liabilities and the suit item is shown as a debt owing by the firm to the plaintiff. That surely constitutes an admission of liability of the firm to the plaintiff in respect of the amount mentioned therein.

I therefore, hold that these exhibits her rightly admitted in evidence and that they were properly used against these defendants.

A last point, not very seriously pressed by Mr. Sankara Sastry, is that as the plainfiff is the legal representative of the deceased partner she cannot maintain a suit in respect of this particular item and she can only sue for settlement of the accounts of the partnership. It is said that there is a merger of her individual rights in her rights as the legal representative of a deceased partner. I cannot see how this sum of money owned to the plaintiff could be treated as an item in a general account between the plaintiffs deceased husband and the other partners. She cannot lose her individual rights against the partnership merely because she happens also to be the legal representative of a deceased partner.

The result is that this second appeals fails and is dismissed with costs. No leave.

Appeal dismissed.


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