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Digambar Bhuyan Vs. Nityananda Sahoo and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtOrissa High Court
Decided On
Case NumberCivil Revision No. 208 of 1971
Judge
Reported in38(1972)CLT992; [1974]94ITR459(Orissa)
ActsIncome Tax Act, 1961 - Sections 137, 138 and 138(1); Finance Act, 1964; Income Tax Act, 1922 - Sections 54
AppellantDigambar Bhuyan
RespondentNityananda Sahoo and ors.
Appellant AdvocateK.C. Lenka and ;S. Pradhan, Advs.
Respondent AdvocateN. Kr. Das and ;K.C. Mohanty, Advs. for Opposite party No. 1
Excerpt:
.....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. it is merely an enabling provision and authorises the commissioner to make a disclosure of the information to any person if he is satisfied that it is in the public interest to do so. 3 failed to exercise the jurisdiction vested in him and, consequently, the..........trial, defendant no. 3 (the petitioner in this case) filed an application in court to summon the income-tax officer to produce the assessment orders and returns filed by the plaintiff as an assessee of income-tax for the years 1964-65 to 1969-70. the plaintiff opposed this prayer on the ground that the assessment returns of the plaintiff relate to the profit and loss of his business and are consequently secret papers concerning his trade and, therefore, cannot be produced in court. it was also contended by the plaintiff that if defendant no. 3 wanted the assessment orders and returns it was open to him to obtain copies of the same from the income-tax department. the court passed an order directing defendant no. 3 to take steps for obtaining the certified copies from the office of the.....
Judgment:

Patra, J.

1. Opposite party No. 1 had brought a money suit against opposite parties Nos. 2 and 3 and the petitioner for recovery of Rs. 2,300 alleged to be due on a hand-note dated June 3, 1966, executed by opposite parties Nos. 2 and 3 in favour of opposite party No. 1. The petitioner stood surety for payment of the debt. In paragraph I of the plaint, opposite party No. 1 stated that he was a registered money-lender and had obtained the necessary licence. Subsequently he filed an amendment to the effect that he had discontinued his money-lending business during the period of the transaction, that is, from 1965 to 1969. All the defendants contended in the suit that the plaintiff is a regular money-lender and had never discontinued his money-lending business and that, consequently, the suit is hit by Section 8 of the Orissa Money-Lenders Act. The suit was in due course taken up for trial on March 18, 1971, and the trial continued from day-to-day. In the midst of the trial, defendant No. 3 (the petitioner in this case) filed an application in court to summon the Income-tax Officer to produce the assessment orders and returns filed by the plaintiff as an assessee of income-tax for the years 1964-65 to 1969-70. The plaintiff opposed this prayer on the ground that the assessment returns of the plaintiff relate to the profit and loss of his business and are consequently secret papers concerning his trade and, therefore, cannot be produced in court. It was also contended by the plaintiff that if defendant No. 3 wanted the assessment orders and returns it was open to him to obtain copies of the same from the income-tax department. The court passed an order directing defendant No. 3 to take steps for obtaining the certified copies from the office of the Income-tax Officer and produce the same in court on March 26, 1971, to which date the suit was adjourned. On the 26th, defendant No. 3 prayed for further time to enable him to produce the certified copies of the assessment orders and returns and time was granted till April 1, 1971. First April, 1971, being a holiday, the case was taken up on the second and obviously defendant No. 3 did not produce the copies and the trial of the case continued. On 9th April, 1971, he filedanother application before the court for summoning the Income-tax Officer to produce the records on the ground that the income-tax authorities refused to grant him certified copies of assessment records of the plaintiff. The court considered the application, rejected the prayer made and directed defendant No. 3 to make an application to the Income-tax Commissioner under Section 138 of the Income-tax Act, 1961 (hereinafter referred to as the ' 1961 Act'), and produce the information if made available. Defendant No. 3 either did not take steps to obtain the necessary information by making an application under Section 138 of the 1961 Act or could not obtain the information, but made repeated prayers thereafter for summoning the Income-tax Officer to produce the necessary records and this prayer was rejected by the court by its order dated May 3, 1971. It is against this order that this present revision application has been filed.

2. The short question for consideration in this case is whether the petitioner (defendant No. 3) is entitled to have the assessment records relating to the plaintiff for the years 1964-65 to 1969-70 produced in court through the Income-tax Officer. It is necessary, therefore, to notice the relevant statutory provisions. Section 54 of the Indian Income-tax Act, 1922 (hereinafter, referred to as the ' 1922 Act '), related to the disclosure of information by a public servant. By Sub-section (1) of that section, it was enjoined that the particulars contained in any statement made, return furnished, or accounts or documents produced under the provisions of that Act, or in any evidence given or affidavit or deposition made, in the course of any proceeding under the said Act, except under Chapter VIII or in any record of any assessment proceeding should be treated as confidential. The second part of this sub-section puts a bar on courts and directed that no court except as provided by the section shall be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such letter, or to give evidence before it in respect thereof. Sub-section (2) of this section made disclosure of any such particulars by a public servant punishable with imprisonment and Sub-section (3) made certain exceptions to the bar against disclosure. The Income-tax Act, 1961, repealed the 1922 Act and substantially re-enacted its provisions. The matter relating to disclosure of information is contained in Sections 137 and 138 of the 1961 Act. Sub-section (1) of Section 137 is in identical terms with Section 54 of the 1922 Act. Sub-section (2) appeared in a modified form and is confined to an injunction on a public servant against disclosure of any particulars mentioned in Sub-section (1). The penalty for contravention of this injunction is to be found provided in Section 280 of this Act. Sub-section (3) of Section 137 is also substantially the same as Sub-section (3) of Section 54 of the earlier Act, except as to some additional exceptions mentioned therein. Section 138 (1961 Act) is of limited scope asit originally stood and is limited to disclosure of information in respect of the tax payable. The Finance Act, 1964 (Act V of 1964), by Chapter XIII omitted Section 137 of th'e 1961 Act and by Section 33 substituted Section 138 by a new section which contained two Sub-sections. The first sub-section is practically the same as the old Section 138. Sub-section (2) entrusts the Central Government with the power to direct by a notified order 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 orders.

3. It may thus be seen that, as a result of the omission of Section 137 and the substitution of Section 138 by a new sub-section, there is no longer any general declaration of the particulars contemplated by the omitted Section 137(1) being treated as confidential and no longer the bar placed by that sub-section on courts is maintained. The prohibition against any public servant disclosing certain particulars also has disappeared. The position, therefore, is that after the Finance Act, 1964, has come into force, no particulars contained in any document whatever filed or produced during assessment proceedings are confidential and the bar on courts from summoning such particulars is lifted. At this stage, Clause (b) of subsection (1) of Section 138 of the 1961 Act as amended may be noticed and it runs thus :

'138. (1) (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.'

4. Section 138(1)(b) does not deal with any restriction. It is merely an enabling provision and authorises the Commissioner to make a disclosure of the information to any person if he is satisfied that it is in the public interest to do so. It is within the powers of a court to summon an authority to produce any document in its custody so long as the production of such documents is neither prohibited nor privileged. Such a restriction was contained in Section 54 of the 1922 Act and Section 137 of the 1961 Act, both of which have now been repealed, and, consequently, the courts are free to summon the Income-tax Officer to produce in court the assessment orders and returns which so far as this case is concerned admittedly related to the period subsequent to the repeal of Section 137 of the 1961 Act. The existence of the provision contained in Section 138(1)(b) does not in any way affect the right of the court to summon for these documents.

5. Having regard to the position of law on explained above, the learned subordinate judge in refusing to summon the Income-tax Officer to produce the documents sought for by defendant No. 3 failed to exercise the jurisdiction vested in him and, consequently, the impugned order cannot be sustained.

6. I would, accordingly, allow this application, set aside the order passed by the learned subordinate judge refusing to summon the Income-tax Officer to produce the documents prayed for by defendant No. 3 and direct him to dispose of the application in accordance with law and in the light of the observations made above. In the circumstances, there shall be no order as to costs.


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