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Nagammai Achi Vs. Alamelu Achi - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation;Civil
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 1118 of 1956
Judge
Reported inAIR1957Mad401; [1957]31ITR673(Mad)
ActsIncome Tax Act, 1922 - Sections 54; Code of Civil Procedure (CPC) , 1908 - Order 11, Rule 14
AppellantNagammai Achi
RespondentAlamelu Achi
Appellant AdvocateA. Sundaram Iyer and ;R.M. Muthuveerappan, Advs.
Respondent AdvocateR. Gopalaswami Iyengar, Adv.
DispositionRevision dismissed
Cases ReferredVelayudham v. Subramania
Excerpt:
.....intended for benefit of assessee to enable him to make full and true disclosure - open to assessee to waive advantage given by section 54 - assessee cannot be compelled to waive that advantage - revision dismissed. -..........accused in connection with his return for income-tax. the commissioner of income-tax declined to produce the documents in question, considering himself precluded from doing so by the provisions of section 54 of the income-tax act.thereupon, the police authorities carried out a search of the office of the income-tax commissioner and seized certain documents which had been lodged with the income-tax department by the accused. the chief presidency magistrate, before whom the documents were tendered in evidence, held that they were not admissible in evidence on the view that section 54 constituted an absolute bar to the court considering any of the documents lodged under the act. but the bombay high court held that such extreme view was erroneous, and beaumont c. j. who delivered the.....
Judgment:
ORDER

Ramaswami Gounder, J.

1. This revision is filed against the order of the Subordinate Judge of Devakottai in I. A. No. 420 of 1956 in O. S. No. 140 of 1953 on the file of his Court, That application was one made by the first defendant, the present petitioner, under Order 11, Rule 14 of the Civil Procedure Code, for directing the plaintiff to produce into Court the documents discovered by her in Schedules B and C to her affidavit of discovery.

The application was ordered in regard to the B. Schedule documents; but it was refused in regard to the documents discovered in Schedule C. Those documents arc assessment orders, and returns and statements submitted by the plaintiff to the Income-tax Officer. The plaintiff claimed that those documents were 'confidential' within the meaning of Section 54 of the Income-tax Act and that therefore she could not be compelled to produce them into Court,

It is clear, and, indeed, it was not disputed, that the documents in controversy would fall within the description of documents mentioned in the said section. If so, it. follows that those documents shall be treated as confidential. But the question is whether the documents should be treated as confidential only so far as the Income-tax Department is concerned, and whether they are not confidential as regards the assessee, and whether, therefore the plaintiff in the present case can be compelled to put them into Court.

The learned counsel for the petitioner relied on the decision of the Bombay High Court in Emperor v. Osman Chotani, AIR 1942 Bom 289 (A), in support of his contention. That Was a case where an investigating police officer served a summons on the Income-tax Commissioner requiring him to produce certain documents lodged by the accused in connection with his return for income-tax. The Commissioner of Income-tax declined to produce the documents in question, considering himself precluded from doing so by the provisions of Section 54 of the Income-tax Act.

Thereupon, the police authorities carried out a search of the office of the Income-tax Commissioner and seized certain documents which had been lodged with the Income-tax Department by the accused. The Chief Presidency Magistrate, before whom the documents were tendered in evidence, held that they were not admissible in evidence on the view that Section 54 constituted an absolute bar to the Court considering any of the documents lodged under the Act. But the Bombay High Court held that such extreme view was erroneous, and Beaumont C. J. who delivered the judgment of the Bench, observed that the section does riot expressly enact that the documents are inadmissible in evidence and that, in providing that the documents are to be treated as confidential, the legislature meant that they are to be treated by the Income-tax Authorities as confidential. The learned Chief Justice further observed:

'All that the section means is that the Income-tax Authorities are to regard communications made to them for the purpose of the Income-tax Act as being confidential, the object, no doubt, 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.

But, as long as there is no disclosure by a member of the income-tax staff, I do not think the direction to treat them as confidential is infringed. The main operative part of the section, however, is that the Court cannot require any public servant to produce these documents. I see no justification for extending the operation of those words beyond their natural and proper meaning. If a document can be given in evidence, without requiring a public servant to produce it, there seems to be nothing in the section to preclude that from being done.'' The above decision, no doubt, supports the contention of the petitioner. According to it, the only effect of Section 54 is to prohibit a Court from directing any public servant to produce before it any of the documents mentioned in the section; that is to say, the section is no bar to an assessee being directed to produce such documents into Court.

The learned counsel for the petitioner also drew my attention to the decision of the Allahabad High Court in Suraj Narain v. Jhabbu Lal : AIR1944All114 , and the decision of the Rangoon, High Court in Ma Hla Mra Khine v. Ma Hla Kra Pru, AIR 1938 Rang 276 (C), but it is unnecessary to canvass the decisions of other High Courts when there are decisions of our own High Court which throw sufficient light on this matter. In the earliest of the decisions, namely, Venkataramana v. Varahalu : AIR1940Mad308 , (Varadachariar and Pandrang Row JJ.), the question for decision was whether the Court was precluded from admitting in evidence a certified copy which had been given to one of the partners by the Income-tax Authorities even when such statement was otherwise relevant under the provisions of the Evidence Act.

One of the contentions before the learned Judge was that the declaration in the earlier part of Clause 1 of Section 54 had a wider effect than the direction in the latter part of the clause and prevented the admissibility of the copy in evidence even though it was available before the Court without any summons to a public, officer. The learned Judges observed that it was not clear whether the declaration of the confidential character of such statements under Section 54 was intended to have a wider scope than the enactment in the latter part of the provision.

However, they held that the document in question was admissible in evidence. It was a copy obtained by one of the members of the firm. That decision is therefore authority for the position that, notwithstanding Section 54, declaring such documents to be confidential, it was open to the assessee himself to make use of them as evidence. But, in a later decision reported in Mythili Ammal v. Janaki Ammal : AIR1940Mad161 (Burn and Stodart JJ.) whereone of the parties to the suit filed certified copies,of the income-tax returns made by the other party,the learned Judges held that they could not be putinto Court since such returns were confidential. TheyObserved:

'It is the policy of the law that statements made in these returns shall not be brought up in Court against the person making them, or, for that matter, against any one else.' They further observed:

'Most probably, they (copies) can be granted to the person who has made the return for his own private information since that would not come under the head of disclosure under Section 54 (2). But that does not mean that a third party who has in some way come into possession of the certified copies can use them to his own advantage.' In making those observations, the learned Judges did not have the advantage of the earlier decision of Varadachariar and Pandrang Row JJ. in : AIR1940Mad308 , which was not brought to their notice.

2. These decisions were considered by a Full Bench in Venkata Gopala Narasimha Ramarao v. Venkataramayya : AIR1940Mad768 . Leach C. J. who delivered the opinion of the Full Bench, observed:

'While Section 54 prohibits the disclosure, except on specified occasions, of matters connected with an assessment to income-tax and prohibits a Court from requiring a public servant to produce the documents mentioned in the section or to give evidence in respect of them, it does not follow that the Court may not admit in evidence a document which falls within Section 54 (1).

This will depend on whether the document is admissible under the provisions of the Evidence Act..... There is nothing in Section 54 to prohibitthis practice and it is only right that a person who is concerned with an assessment should be allowed to obtain copies of the documents relating to his assessment to income-tax should he so desire, and if copies are supplied, he may put them in evidence in a suit if the Evidence Act allows it.'

3. These observations make it clear that Section 54 of the Income-tax Act is not concerned with the admissibility of those documents, but only directs that they should be treated as confidential and prevents the compulsory production or those documents by the Income-tax Department. If those documents are available in Court, then, the question whether they are admissible in evidence or not must be determined with reference to the provisions of the Evidence Act.

The question still remains to be considered . whether the assessee who is in possession of the documents could not be compelled to produce them into Court just as the Income-tax Department could not be compelled. On that question, the following observation of Leach C. J. in the said Full Bench decision throws much light:

'The return is a confidential document and cannot be disclosed to a third party; but there can be no objection to the maker of the return having a copy for his own purposes if he so desires. So far as the assessee is concerned, he is not bound to treat the document as confidential.''

The above observation shows that the declaration contained in Section 54 is intended for the benefit of the assessee to enable him to make a full and true disclosure, and it is open to him to waive that advantage, but he cannot be compelled to waive that advantage and produce the documents into Court.

4. In the present revision, it is not the admissibility of those documents that is in question. It may be that, if those documents are available in Court, they ate admissible in evidence even at the instance of the present petitioner. But that is not the question in the present revision, The question is whether, in spite of the fact that the documents are declared to be confidential by the said section the plaintiff who has got custody of those documents could be compelled to put them into Court.

As pointed out above, the observation of Leach C. J. in the Full Bench case is against the contention of the learned counsel for the petitioner. There is another decision of a single Judge of this Court (Mockett J.) in Velayudham v. Subramania, AIR 1941 Mad 709 (G), where the lower Court ordered the defendant in a suit to apply for a certified copy of his income-tax returns and profit and loss statements submitted by him to the Income-tax Officer and produce them into Court at the plaintiff's cost, The learned Judge was of opinion that the Court is prohibited from ordering a defendant to produce his original income-tax returns equally as it cannot order the income-tax officers themselves to produce them, and to direct that a litigant should produce a certified copy of his return would render Section 54 of the Income-tax Act, in some respects a dead letter. I respectfully agree with that view.

5. It follows that the order of the learnedI Subordinate Judge was right, and this revision is(dismissed with costs.


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