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Pentakota Surya Appa Rao and ors. Vs. Pentakota Seethayamma and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revision Petition No. 1634 of 1973
Judge
Reported in[1976]103ITR222(AP)
ActsIncome Tax Act, 1922 - Sections 54; Income Tax Act, 1961 - Sections 137 and 138; Evidence Act, 1872 - 74(1); Finance Act, 1964; General Clauses Act - Sections 6
AppellantPentakota Surya Appa Rao and ors.
RespondentPentakota Seethayamma and ors.
Appellant AdvocateP. Ramachandra Reddy, Adv. General and ;K.V. Rama Sarma, Adv.
Respondent AdvocateP.V.R. Sarma and ;P. Rama Rao, Advs.
Excerpt:
direct taxation - admissibility of tax record - sections 137 and 138 of income tax act, 1961, section 54 of income tax act, 1922, finance act, 1964, section 74 (1) of evidence act, 1872, section 6 of general clauses act - whether civil court can accept income tax return and assessment order as evidence even if bar is placed under section 137 - section 137 has been repealed with effect from 1st april 1964 - income tax return and assessment order if related to year prior to assessment year ending 1st april 1964 cannot be admitted as evidence. - - now, as it is amended, under section 138(1), it is only the commissioner of income-tax who can disclose any information relating to any assessee in respect of any assessment made either under the 1961 act or under the indian income-tax act,.....ramachandra raju, j.1. this civil revision petition is directed against an order of the court of the subordinate judge, visakhapatnam, in o.s. no. 146/68, holding that certain income-tax returns and assessment orders produced by the income-tax department and sought by the plaintiffs can be marked as evidence. defendants 1 to 3 in the suit are the petitioners. the suit is filed for partition by the wife and daughter of one late bapa rao, the deceased brother of defendant no. 1, defendants 2 and 3 are the minor sons of defendant no. 1 and the 4th defendant is the wife of the 1st defendant. the suit for partition is filed alleging that bapa rao and the 1st defendant are the two sons of appanna. 5th and 6th defendants are his two daughters. appanna and his two sons constituted a joint family......
Judgment:

Ramachandra Raju, J.

1. This civil revision petition is directed against an order of the court of the Subordinate Judge, Visakhapatnam, in O.S. No. 146/68, holding that certain income-tax returns and assessment orders produced by the income-tax department and sought by the plaintiffs can be marked as evidence. Defendants 1 to 3 in the suit are the petitioners. The suit is filed for partition by the wife and daughter of one late Bapa Rao, the deceased brother of defendant No. 1, Defendants 2 and 3 are the minor sons of defendant No. 1 and the 4th defendant is the wife of the 1st defendant. The suit for partition is filed alleging that Bapa Rao and the 1st defendant are the two sons of Appanna. 5th and 6th defendants are his two daughters. Appanna and his two sons constituted a joint family. Bapa Rao died on August 27, 1951, undivided with his father, Appanna, and his brother, 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.

2. 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 properties have been partitioned. The allegation that all the properties of the family are still kept joint is false.

3. In order to counter this defence set up by the defendants, the plaintiffs want to rely on the income-tax returns and assessment orders in respect of the assessment years 1956-57 to 1970-71. At the instance of the plaintiffs, those documents were summoned from the income-tax department and they were produced in court. While P.W. 1 was in the witness box and the plaintiffs wanted to mark those documents through P.W. 1, the defendants took objection for making the same. From the order of the lower court, it appears that the objection was taken in the form that P.W. 1 not being a party to those documents, he cannot prove the same and that the proper course is to summon the Income-tax Officer, who produced the documents, or a subordinate of his to prove the same. But, the real question in controversy seems to be with regard to the admissibility of the documents. Shri Ramachandra Reddy, the learned Advocate-General, who appeared for the petitioners, has argued that though Section 137 of the Income-tax Act, 1961, which replaced Section 54 of the Indian Income-tax Act, 1922, prohibiting disclosure of information in the particulars contained in the income-tax returns furnished or accounts or documents produced under the provisions of the Income-tax Act, or in any evidence given in the course of any proceedings under the Income-tax Act and they should be treated as confidential, is omitted now under the Finance Act, 1964, however, the Finance Act amended Section 138 of the Act. Now, as it is amended, under Section 138(1), it is only the Commissioner of Income-tax who can disclose any information relating to any assessee in respect of any assessment made either under the 1961 Act or under the Indian Income-tax Act, 1922, if an application is made and he is satisfied that it is in the public interest so to do. Therefore, the documents, now brought to court without the express permission of the Commissioner, cannot be marked in evidence. The further argument of the learned Advocate-General is that the prohibition contained in Section 137 would still apply with regard to the returns and assessment orders prior to the year 1964, in which year only the old Section 137 was omitted, in view of Section 6(c) of the General Clauses Act, 1897, whereunder it is provided that unless a different intention appears, the repeal of an enactment shall not affect any right, 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.

4. In the decision in Income-tax Officer v. P. Ramaratnam : [1965]58ITR297(Mad) 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 Section 138 or any other law for the time being in force, the Central Government may, having regard to the practices and usages, customary or any other relevant factors, by order notified in the Official Gazette, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such of the assessees or except to such authorities as may be specified in the order. But, a contrary view by the same High Court was expressed in another case of a single judge, Venkata-raman, J. in S.V. Ramakrishna Mudaliar v. Mrs. Rajabu Fathima Bukari : [1965]58ITR288(Mad) . It was held in that case, that the inadmissibility of the evidence of the Income-tax Officer will continue under Section 6(c) of the General Clauses Act, notwithstanding the omission of Section 137 of the Income-tax Act of 1961 by the Finance Act of 1964. In a subsequent Division Bench decision in Ve. V. Sivagami Achi v. Vr. Ve. Vr. Ramanathan Chettiar : [1967]64ITR36(Mad) of the Madras High Court, the matter was considered and the Bench agreed with the view taken by Venkataraman J., and disagreed with the view of Sadasivam J., as expressed by them in the two cases mentioned above. The Bench held that Section 54 of the Indian Income-tax Act, 1922, and Section 137 of the income-tax Act, 1961, merely declare that the particulars specified therein should be treated as confidential and do not create an obligation or privilege or right which could be regarded as having been incurred, acquired or having accrued. There is only a bar on the court from summoning for the specified particulars and a prohibition against any public servant from disclosing such particulars and these by themselves cannot amount to an obligation incurred within the meaning of Section 6(c) of the General Clauses Act, 1897. The result of the omission of Section 137 and the substitution of Section 138 by adding a new sub-section to it by the Finance Act, 1964, is that no particulars contained in any document whatever, filed or produced during assessment proceedings, are confidential and the bar on the court from summoning for such particulars is lifted. Section 6(c) of the General Clauses Act is not attracted to the omission. In the decision in Raghubir Saran v. O. P. Jain, Additional Munsif : [1969]73ITR482(All) , the Allahabad High Court (single judge) took a different view. It was held by the Allahabad High Court that the mere omission of the Section 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.

5. In the decision in Daulat Ram v Som Nath : [1968]68ITR779(Delhi) 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 whether to furnish information or not. The prohibition about the supply of information cannot be set at naught by summoning a clerk of the income-tax department with the information asked for.

6. In the decision in Chandrasekkara Mandian v. Income-tax Officer : [1973]87ITR564(Ker) , the question arose before the Kerala High Court whether the privilege in respect of returns filed by the assessee relating to the period between April I, 1958, and March 31, 1964, is available after deletion of Section 137. The Kerala High Court held that the general rule is that the provisions of the repealed Act will continue to be in force on account of Section 6(c) of the General Clauses Act, 1897, unless a contrary intention can be gathered from the new enactment. Section 138 is not incompatible or inconsistent with the effect of Section 137 being continued notwithstanding its omission and, therefore, the privilege under Section 54 of the Indian Income-tax Act, 1922, continued under Section 137, was available in respect of the returns in question.

7. In the decision in Rikhabchand v. R.V. Subrahmanyam, [1972] 1 M LJ 619 it was held by the Mysore High Court (single judge) that the court has power to summon from the income-tax department the income-tax assessment orders relating to a party before it. Neither the bar nor the prohibition under Section 137 of the Income-tax Act, 1961, can be regarded as an obligation, in any case an obligation incurred within the meaning of Section 6(c) of the General Clauses Act. It was also held that Section 138(1)(a) as substituted by the Finance (No. 2) Act of 1967 has no reference to the power of the court to summon any income-tax authority to produce certain documents or give evidence.

8. In view of the conflicting views expressed by the other High Courts, as mentioned above, and there being no decision of this court on the matter, having regard to the importance of the matter which may often arise in courts, I think it desirable to have an authoritative pronouncement of this court on the question, by referring the case to a Division Bench for decision.

9. Sri P.V.R. Sarma, the learned counsel for the respondents-plaintiffs, has no objection to refer the matter to a Bench, but, however, added that the suit being an old one and the plaintiffs not having been in possession, it is necessary that C.R.P. should be disposed of early in order that the suit can be taken up for trial and disposed of as early as possible.

10. Accordingly, I direct the papers to be placed before the hon'ble the Chief Justice for necessary orders.

Sambasiva Rao, Actg. C.J.

11. This revision petition has come to aDivision 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-taxreturns, assessment orders and other relevant records to be producedbefore it and receive them in evidence. The provisions of the Income-taxAct relating to this have undergone charges more than once and severalHigh Courts in the country have expressed varying and conflictingopinions. We are told that neither the Supreme Court nor this court hasconsidered this aspect.

12. 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.

13. The facts of the case are simple and undisputed. A suit has been filed for partition by the wife and daughter of one late Bapa Rao, who was the brother of defendant No. J. Defendants Nos. 2 and 3 are the latter's minor sons, 4th defendant is his wife and the 5th and 6th defendants are the sisters. Appamia was the father of defendant No. 1, Bapa Rao and defendants Nos. 5 and 6, the father and the two sons constituting a Hindu joint family. Bapa Rao died on August 27, 1951, according to the plaintiffs, undivided from the joint family. His 1/3rd share devolved on the plaintiffs under the Hindu women's Right to Property Act. Even after his demise the joint family continued and its fortunes and business prospered in a very appreciable manner. Appanna, the father, died on September 26, 1959. Defendants Nos. 1, 5 and 6 and the plaintiffs became entitled to Appanna's 1/3rd, share. The 1st defendant took over the management of the family after his father's lifetime. The plaintiffs are entitled to 25/60ths share in the' entire family properties. The principal defence came from the 1st defendant, according to whom, there was a division into three shares even during the lifetime of the father, Appanna, and the three branches took possession of their respective 1/3rd shares. However, the plaintiffs and all other members agreed to keep the lands jointly and consequently they alone were kept joint while the rest of the properties were divided. So, according to him, the allegation that all the properties are still kept joint is false.

14. Obviously, to meet this defence case, the plaintiffs requested the court to call for the income-tax returns and assessment orders of the family for the assessment years 1956-57 to 1970-71. The court acceded to this request and summoned these records from the income-tax department. The department, in response to this notice, produced the originals of the records to the court. When P.W. 1 was in the box, an attempt was made to mark these documents through him. The defendants objected to this contending that he cannot prove the documents as he was not a party to them and the proper course was to summon the Income-tax Officer or someone subordinate to him for this purpose. However, our learned brother felt that the real controversy is in regard to the admissibility of these documents. The trial court overruled the objection of the defendants and held that once the original documents were produced by the income-tax department, which are public documents, they can be marked 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.

15. The arguments of Sri P. Ramachandra Reddy, learned Advocate-General for the petitioners, may be summarised as follows. Section 54 ofthe 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 recordsrelating to any assessment from any Income-tax Officer and on anyIncome-tax Officer giving evidence relating thereto. In fact, these enactments provide for penalties on Income-tax Officers if they disclose anyinformation relating to assessments. It is no doubt true that Section 137and the provision relating to penalty were deleted with effect from April1, 1964. But in 1967, an amendment was introduced whereunder theentire Section was recast. A new procedure for disclosure of informationrespecting assessees was provided under Section 138. Thus, it emerges thatup to April 1, 1964, there was an express prohibition against courts callingfor the information relating to income-tax assessments and against Income-tax Officers disclosing any such information. Now that Section 131 provides for specific modes of disclosure, it must be deemed by virtue ofSection 6 of the General Clauses Act that the new provisions indicate anintention that still no disclosure respecting assessees should be madeexcepting through and by the specific modes of disclosure stated in Section 138. Since the previous provisions were repealed and since there isno different intention from the new provisions, they do not affect anyright, privilege, obligation or liability acquired, accrued or incurred underany enactment so repealed. Consequently, the embargo on courts summoning assessment records from Income-tax Offices still continues to be in,force. If the plaintiffs wanted any information respecting 1st defendant'sassessments or his father's assessments, they should have made an application to the Commissioner as provided for under Section 138(1)(b) of the 1961Act. In the result, the lower court acted illegally and without any jurisdiction in summoning the income-tax records for the years 1956-57 to1970-71. Because the court summoned them, the Income-tax Officermerely obeyed that order. But for that reason, the assessment records donot become admissible in evidence.

16. Sri P. Rama Rao, learned standing counsel for the income-tax department, supports the arguments of the learned Advocate-General that the only course available to a person seeking information respecting assessments now is to approach the Commissioner under Section 138(1)(b). The court had no power to summon the assessment records from the Income-tax Office. At the same time he make's another point. Section 137 of the 1961 Act was not repealed; it was only omitted. So the embargo on courts is omitted. Omission is different from repeal and does not have the same effects of repeal. Consequently, Section 6 of the General Clauses Act is not attracted to the case.

17. Sri P.V.R. Sarma, appearing for the plaintiffs (respondents), maintains that Section 6 of the General Clauses Act has no application since there is no repeal. Now that Section 137 is omitted and the prohibition 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.

18. 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 that of 1961 read in conjunction with the amendments brought into them from time to time, unaided and untrammelled by the judicial pronouncements. This becomes necessary in view of the fact that there are no pronouncements of either the Supreme Court or this court which are binding on us. Starting with Section 54 of the 1922 Act, it deals with the topic of 'Disclosure of information by a public servant'. The section with Sub-sections (1) and (2) reads as follows :

'54. Disclosure of information by a public servant.--(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 this chapter, or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no court shall, save as provided in this 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.

(2) If a public servant discloses any particulars contained in any suchstatement, return, accounts, documents, evidence, affidavit, deposition orrecord, he shall be punishable with imprisonment which may extend to sixmonths, and shall also be liable to fine.'

19. It is plain from these provisions that record of any assessment proceedings prepared for the purpose of the Act is a confidential record. It further imposes a prohibition on courts from requiring any public servant to produce before them any such returns, accounts, documents or records or any part thereof and to give evidence before them in respect thereof. This embargo is laid notwithstanding anything contained in the Indian Evidence Act, but it is subject to the exceptions provided in the Act itself. If any public servant discloses any particulars relating to the records, he shall be punishable with imprisonment which may extend to six months besides being liable to pay fine. Sub-section (3) of Section 54 lays down such exceptions to the embargo contained in Sub-section (1). With effect from April 1, 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.

20. 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 proceeding, or any proceeding relating to recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872), no court shall, save as provided in this 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.

(2) No public servant shall disclose any particulars contained in any such statement, return, accounts, documents, evidence, affidavit, deposition or record............

138. Disclosure of information respecting tax payable.--Where a person makes an application to the Commissioner in the prescribed form and pays the prescribed fee for the information as to the amount of tax determined as payable by any assessee in respect of any assessment made either 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, notwithstanding anything contained in Section 137, if he is satisfied that there are no circumstances justifying its refusal, furnish or cause to be furnished the information asked for.'

21. It was on 1st April, 1964, that a vital departure was made by : Parliament from the provisions of Sections 137 and 138. By and under the Finance Act, 1964, Section 137 was omitted and Section 138 was substituted by a new section. The newly recast Section 138 is to the following effect:

'138. Disclosure of information respecting assessees.--(1) 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, either tinder 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 the practices and usages customary or any other relevant factors, by order notified in the Official Gazette, 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.'

22. 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 1961, 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 relating to any assessee that could be sought by any person in his application. While under the previous Section 138 what all the Commissioner was to be satisfied was that there were no circumstances justifying his refusal to furnish the information sought for, under the new one he is to be satisfied that furnishing the information asked for is in the public interest. His decision in this behalf is final. Under Sub-section (2) of the later Section 138 the Central Government can direct that no information or documents 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.

23. However, Section 138(1) is not left as it stood amended under the Finance Act of 1964. By and under the Finance Act of 1967 a new Sub-section (1) with more elaborate provisions was substituted. That Sub-section (1) is in the following terms :

'(1) (a) The Board or any other income-tax authority specified by it by a general or special order in this behalf may furnish or cause to be furnished to--

(i) any officer, authority or body performing any functions under any law relating to the imposition of any tax, duty or cess, or to dealings in foreign exchange as defined in Section 2(d) of the Foreign Exchange Regulation Act, 1947 (7 of 1947); or

(ii) such officer, authority or body performing functions under any other law 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.'

24. 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.

25. 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 with an application seeking for any information relating to any assessee, it must be deemed that the same old embargo against the court continues by necessary implication. If a person wants to place before a court any such information by way of evidence, it is now open to him to approach the Commissioner and the latter, if he thinks that it is in the public interest so to do, can do it. Learned Advocate-General says that, in other words, the only course now left open to any party to a proceeding in a court is not to request the court to call for the records from an Income-tax Office or Income-tax Officer but to make an application to the Commissioner in this behalf. In view of the specific provision the embargo against courts directly calling for records from the Income-tax Officer should be understood as still continuing.

26. We are unable to accede to this contention. When right up to April 1, 1964, Parliament thought it necessary to impose an embargo on courts from requiring production of assessment records or asking any public servant to give evidence before them, that is now clearly omitted. While the 1961 Act thought it necessary to reproduce the old Section 54 in Section 137, it omitted altogether Section 137. There must be some significance to this omission. That significance can only be that the embargo on courts that subsisted till then is taken away. It may be that any person can receive any information relating to any assessee from the Income-tax Commissioner. If it were the intention of Parliament to still retain the prohibition against a court, we fail to appreciate why did it not continue it even after April 1, 1964. While enabling the Commissioner to furnish any information relating to any assessee, it was not thought necessary to provide that excepting this, there is no other way for any person or for any court to get information relating to assessments. Approaching the Income-tax Commissioner by a person for information is intended as a mode of securing that information. But the prohibition against the court calling for it is deleted. It is worthy of note that Section 54 of the 1922 Act and Section 137 of the 1961 Act laid the embargo on courts notwithstanding anything contained in the Evidence Act, 1872. That was a clear limitation placed on the provisions of the Indian Evidence Act by the special enactment relating to income-tax. So long as 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.

27. 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 Evidence Act should apply as the non-obstante clause does no more exist. On a reading of the provisions, we are of the opinion that there is no prohibition against courts requiring any public servant or public officer to produce any records relating to the assessment of an assessee. It is of course left to the judicial discretion of the court, which should be exercised in accordance with the provisions of the Evidence Act.

28. From the above discussion, it also emerges that the privilege against disclosing any information relating co assessment orders summoned by the court existed till 1st April, 1964, and thereafter, it has been taken away. Sri P.V.R. Sarma for the plaintiffs-respondents argued that now that the privilege does not exist it must be deemed to have never been there right from the beginning and so the court is well within its powers in summoning the records relating to assessments from 1956-57 up to 1970-71. It is not possible to accept this submission. The bar against the court summoning records was in force right up to April 1, 1964, and the court could hot have summoned records of the earlier period if it was requested to do so prior to that date. There is nothing in the new Section 138 which indicates that the privilege against disclosure was taken away with retrospective effect nor that its prospective force can be spelled out by necessary implication from that provision. It can, therefore, be safely concluded that the privilege has been taken away only prospective, i.e., on and from April 1, 1964. It follows, therefore, that the court cannot now send for the records relating to assessment years up to April 1, 1964. It can do so only for the years subsequent, to April 1, 1964.

29. However, the learned Advocate-General refers to Section 6 of the General Clauses Act which deals with the effect of repeal. In particular, he invites our attention to Clause (c) thereof. We may as well read that particular provision :

'6. Where this Act, or any, Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not--... (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed.'

30. In his submission a privilege was acquired under Section 54 of the 1922 Act and Section 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, AIR 1970 SC 494, to which our attention is invited by Sri Rama Rao. There, Rule 132A(2) of the Defence of India Rules was omitted by the Defence of India (Amendment) Rules, 1965, However, prosecution thereunder was launched on March 17, 1968, i.e., after the omission. An attempt was made to save the prosecution by seeking recourse to Section 6 of the General Clauses Act. Repelling this contention Bhargava J., who spoke for the court, ruled at page 503 :

'In the case before us, Section 6 of the General Clauses Act cannot obviously apply to the omission of Rule 132A of the Defence of India Rules for the two obvious reasons that Section 6 only applies to repeals and not to omissions and applies when the repeal is of a Central Act or Regulation and not of a rule. If Section 6 of the General Clauses Act has been applied, no doubt this complaint against the two accused for the offence punishable under Rule 132A of the Defence of India Rules could have been instituted even after the repeal of that rule.'

31. It is thus, well settled that Section 6 of the General Clauses Act has no application to a case of omission.

32. The above reasoning yields the following conclusions:

(1) Even now, i.e., after the omission of Section 137 and recasting of Section 138, a court cannot summon records relating to assessments from any income-tax office or offices in respect of the period up to April 1, 1964.

(2) After that date, the provisions of the Evidence Act come into play and the court can summon, if it is satisfied that the circumstances of the case justify such summoning and it is in accordance with the Evidence Act, assessment records from income-tax office or offices relating to the period from April 1, 1964.

33. Now, we briefly refer to the case law on the point though there is no decision binding on us. The Full Bench decision of the Punjab and Haryana High Court in Amar Singh Lamba v. Sewa Singh [FB] fully supports the view we have taken. The facts there are practically analogous to those in the case before us. The Subordinate Judge of Amritsar in a suit between two private parties summoned the records relating to the assessment of the respondents from the income-tax authorities. The records were brought to the court by a clerk of the department. The defendant, however, took an objection that those records could not be produced in view of the provisions of Section 138 and the notification issued by the Central Government under Sub-section (2) of 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 proposition we fully concur.

34. There is another Full Bench decision of the Delhi High Court in Trilok Chand Jain v. Dagi Ram Pindi Lall : [1974]95ITR34(Delhi) [FB], which is very much stressed before us by the learned Advocate-General. There was a suit for recovery of a large amount of money from the defendants which was a firm with its three partners. While evidence was being recorded in the suit, the plaintiff obtained summons from the court requiring the income-tax department to produce in court the records relating to the income-tax of the defendants-firm for the years 1964-65 to 1971-72. The Income-tax Officer wrote to the court claiming that the records called for were privileged under Section 137 of the Income-tax Act, 1961. Relying on the decision of the Delhi High Court in Daulat Ram v. Som Nath, he, however, sent the records in a sealed cover through an inspector in compliance with the summons of the court. The plaintiff then, applied for and obtained summons requiring the Income-tax Officer to produce income-tax records relating to a private limited company and another person. Once again, the Income-tax Officer claimed privilege under Section 138 of the Act of 1961. He pointed out that if any information was required the party should apply to the Commissioner of Income-tax under Section 138(1) read with Rule 113 of the Income-tax Rules, 1962. As on the previous occasion, he, however, sent the records in a sealed cover to the court. Besides this, the plaintiff filed a number of certified copies of the accounts of the defendants which he had secured from the income-tax authorities and wanted to tender those copies in evidence. In their turn, the defendants wanted to summon certain records relating to the plaintiff from the income-tax department. But to this, the plaintiff demurred once again relying on Daulat Ram v. Som Nath. It wasat that stage the question of privilege came up before the court. Though t he learned single Judge was inclined to take a view different from the one in Daulat Ram v. Som Nath, since the question was likely to arise frequently on the original side of the High Court in the course of trial of suits, the learned judge considered that the said question should be settled by a Full Bench. While referring the matter to the Full Bench the learned single judge divided the question into three parts.

' (1) What is the position of law relating to privilege prior 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 ?'

35. On a very elaborate consideration of the provisions of the law and the case law, the Full Bench, for which Tatacuari J. (as he then was) spoke, held 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 1963-6.4. Likewise, it was held that where records were filed in respect of years up to and including the assessment year 1961-62 in proceedings under the 1922 Act, the declaration of their confidential nature and the prohibition against their disclosure under Section 54(1) and the liability of a public servant for punishment for disclosure under Section 54(2) is available and remained unaffected by the amendments in 1964 and 1967. Lastly it was held that where records were filed after 1st April, 1964, and the assessment proceedings took place under the Act of 1961, whether in respect of an assessment year prior to or after 1st April, 1962, there was no longer any declaration of their confidential nature or a prohibition against a public servant. In such cases, where a party to a proceeding in a court applies for summoning any documents, records, etc., from the income-tax authorities, the court may summon the said records. But, oh receipt of the summons, it is open to the Commissioner of Income-tax to consider the matter as provided under Section 138(1)(b) and decide whether it would be in the public interest to produce or furnish the documents, records, etc., summoned for, and submit his view to the court in answer to the summons. In case he is satisfied that the production, etc., would not be in the public interest, his decision is final and the court to which the said decision is communicated cannot question the same. This, in substance, is the decision of the Full Bench of the Delhi High Court. This is the view which the learned Advocate-General wants us to adopt.

36. From the above summary of what was decided in that case, it is seen that the confidential nature and the prohibition against the disclosure of income-tax records remained unaffected by the amendments in 1964 and 1967. That the confidential nature and the prohibition against a court summoning such records from income-tax office remained intact up to 1st April, 1964, is also our view. To that extent there is no variation between our view-point and that of the Delhi High Court, Full Bench. We are, however, unable, with great respect, to agree with the last conclusion of the Full Bench in respect of records filed after 1st April, j 1964. While holding that there was no longer any declaration of their confidential nature and a prohibition against a public servant and so, the court can summon the records from any income-tax office, the Full Bench was of the opinion that 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 confer any power on the Commissioner to deal with any such summoning of the records by a court. Its scope, as we have already pointed out, is limited. It is limited to the consideration of an application made by a person in the prescribed form for information relating to assessments. The summoning of the records by a court certainly, by any stretch of imagination, comes within the ambit of this provision. To extend the power of the Commissioner to acceptance or rejection of the court's summons for the records is something which is not in Section 138(1)(b). The declaration that the income-tax records relating to assessments are confidential in nature is no more in existence. To equate a court to a person and a summon from a court to an application in the prescribed form for information which are the requirements in Section 138(1)(b) is not warranted by the omission of Section 137 and by the provisions of Section 138(1)(b) . So, we are unable to accept the decision of the Delhi High Court on the question of the Commissioner accepting or rejecting the summons sent by a court for production of income-tax records.

37. The decision of the Supreme Court in Chant Chandra Kundu v. Gurupada Ghose : [1961]43ITR83(SC) is of no help in this case because that was directly a case under Section 54 of the 1922 Act.

38. Then we will do well to briefly refer to two single judge decisions and one Division Bench decision of the Madras High Court. The first one is in S.V. Ramakrishna Mudaliar v. Mrs. Rajabu Fathima Bukari. Venkataraman J. held that Section 6 of the General Clauses Act would apply to the omission of Section 137 and expressed the opinion that, since a contrary intention is not apparent in the Finance Act of 1964, the prohibition contained in Section 137 of the 1961 Act is not destroyed. The Prohibition would continue to operate in spite of the deletion of the section in 1964. We have already held that Section 6 of the General Clauses Act has no application to a case of omission. The other single judge's decision is that of Sadasivam J. reported in the same volume at page 297 (Income-tax Officer v. P. Ramaratnam). The learned judge also was under the impression that Section 137 was repealed in 1964. But, there is a modified restriction by virtue of Section 138(2) introduced by the same Act and as such Section 6 of the General Clauses Act would not operate to continue the prohibition against 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. VR. VE. VR. Rama nathan 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, 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 the subordinate Judge who declined to order the production from the income-tax authorities. In a way this Bench decision broadly supports our view though it has proceeded on the assumption that Section 137 was repealed. In Ragubir Saran v. O.P. Jain, Additional Munsif and Chandrasekhara Mandian v. Income-tax Officer the learned single judges of the Allahabad and Eerala High Courts respectively held that Section 54 of the 1922 Act and Section 137 of the 1961 Act conferred a privilege. In the former decision, it was held that after the repeal of the 1922 Act and the deletion of Section 137 from the 1961 Act, there is no provision providing secrecy and protection to the document filed or statements made during the assessment proceedings. The omission of Section 137, in the opinion of the learned judge, did not obliterate the obligation imposed by Section 54. So, the income-tax authorities were justified in taking up the stand that they could not be produced in court. In the latter case the learned judge of the Kerala High Court was dealing only with the records relating to the period between 1957 and March 31, 1964. It was held that the privilege conferred under Section 137 was available in respect of the returns.

39. We have already referred to the Full Bench decision of the Punjab High Court in Amar Singh Lamba v. Sewa Singh which fully supports our conclusions. There is an earlier decision of a Division Bench in, O.P. Aggar-wal, Income-tax Officer v. State relied on by the learned Advocate-General to make an exhaustive reference to all the case law. This decision, on its very facts, is not applicable to the consideration of the question. In a criminal case the income-tax tile relating to the income-tax year 1947-48 decided on 14th February, 1957, was sought to be summoned and the District Magistrate overruled the objection by an order dated 28th November, 1963. It was held that the Income-tax Officer was entitled to the protection conferred by Section 54 of the 1922 Act so far as the summoned file was concerned. All the material events in this case took place before April 1, 1964, and so we cannot draw much support from this case.

40. Then, the learned single judges of Orissa and Patna High Courts took the same view as we have done in Nazir Mohammad v. Jamila Bibi : [1972]85ITR342(Orissa) and Smt. Rama Gouri Devi v. Harish Chandra Chaturdas : [1973]87ITR15(Patna) In the Orissa case it was held that after 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 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.

41. Sri P. V. R. Sarma relies on A. S. N. M. Idris Ambalam v. M. Abdul Hakim : [1968]68ITR733(Mad) 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 : [1966]61ITR597(Mad) it was decided that there was no bar against voluntary disclosure of income-tax information. Sri Sarma also distinguishes the decisions, on which the department itself claimed the privilege and also on the further ground that none of the decisions considered the provisions of the Evidence Act. Sri Sarma says that the privilege is to the department and not to the assessee and relies on an observation of the Division Bench of the Madras High Court in P. Kandiah Thevar v. Third Income-tax Officer : [1963]49ITR665(Mad) . He lays great stress on the view expressed by the Full Bench of the Punjab High Court in Amar Singh Lamba v. Sewa Singh.

42. This is all the case law on the point which has been placed before us and we have given a brief resume of their substance. We have already expressed our view on the question involved by virtue of our own reasoning on a construction of the relevant provisions of the statute. So, we hold that the summoning of the income-tax records by the lower court from the income-tax department is right in so far as they relate to the period subsequent to April 1, 1964, The records relating to the assessments up to that date are confidential records and they come within the prohibition laid down by Sections 54 and 137 of the two Income-tax Acts.

43. But the question decided by the lower court does not stop with this. Income-tax records as and from April 1, 1964, are admissible. But, can they be proved through the evidence of P. W. 1 Sri Sarma contends that they are all public documents within the meaning of Section 74 of the Evidence Act as they come within the scope of Sub-section (1), Clause (iii), of that section. These income-tax records, originals of which have been produced by the income-tax department, are certainly public documents within the meaning of Section 74 since they are documents forming the acts of public officers who discharge executive functions by imposing and collecting tax. One of us (Sambasiva Rao, Actg. C. J.) held in Vijaya Kumar Machinery & Electrical Stores v. Alaparthi Lakshmikanthamma : [1969]74ITR224(AP) , that the income-tax returns are public documents. Since they are originals themselves of public documents, they require no further proof. For this re'ason, we uphold the decision of the trial court to the extent stated above, i.e., for the period after April 1, 1964, and dismiss the civil revision petition to that extent alone. In view of the fact that the law had been in an uncertain condition in this State so far, we direct the parties to bear their own costs of the revision petition.


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