AMAR SINGH LAMBA Vs. SEWA SINGH

JUDGEMENT

(1.) IN a suit pending between the parties before the Subordinate Judge, First Class, Amritsar, records relating to the assessment of the respondents were summoned from the income-tax department. Though the records were brought to the court by a clerk of the department, on an objection taken by the defendant, the learned Subordinate Judge ruled that they could not be produced in view of the provisions of Section 138 of the Income-tax Act and the notification issued by the Central Government under Sub-section (2) of that section on 3rd June, 1965. It is for quashing this order of the trial court, dated 8th August, 1969, that the plaintiff has come up in revision under Section 115 of the Civil Procedure Code.

(2.) DURING the last few years there has been a considerable change in the law concerning privilege attaching to the income-tax returns, etc. . and to documents produced in or concerned with assessment of income-tax. Section 54 of the Indian Income-tax Act, 1922, provided, inter alia, that except for certain documents mentioned therein, no 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 any proceedings relating to the recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential. The object of this protection, as stated in various authorities, was to enable people to feel that they could 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 to others. In 1960, by the Taxation Laws (Amendment) Act, 1960, Section 59b was introduced, which provided that the Commissioner of Income-tax could, on an application made to him, supply information as to the amount of tax determined as payable by any assessee in respect of any assessment made on or after the 1st day of April, 1960, if he is satisfied that there are no circumstances justifying its refusal. Soon after the law was amended, and the new Income-tax Act, 43 of 1961, came into force on 1st April, 1962. Section 137 thereof pertains to privilege attaching to the various papers concerning assessment proceedings. In some respects, the protection given by Section 54 of the previous Income-tax Act was enlarged, and it was expressly stated that no public servant was to disclose even voluntarily any particulars contained in documents declared by the section to be confidential. These confidential documents included records in assessment proceedings, returns furnished, accounts or documents produced under the provisions of the Act, or in any evidence given, or affidavits and depositions other than those in proceedings under Chapter VIII of the Act. This section was, however, later on deleted by Section 32 of the Finance Act, 1964, with effect from 1st April, 1964. The effect of all these amendments was considered by a Division Bench of this court in O. P. Aggarwal v. State, [1966] 59 I. T. R. 158 (Panj.), and it was held that, notwithstanding the repeal of the Indian Income-tax Act, 1922, the protection from and prohibition of disclosure of assessment records as afforded by Section 54 of that Act would not be applicable to assessments that had been completed before the 1st day of April, 1962, the date on which the Income-tax Act, 1961, came into force.

(3.) THE Income-tax Act, 1961, as originally enacted contained a provision relating to disclosure of information by the income-tax department similar to that contained in Section 59b of the repealed Act. It authorised the Income-tax Commissioner to supply information to any person on his application 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, on or after 1st day of April, 1960, if he was satisfied that there were no circumstances justifying its refusal. This Section 138 was itself amended by the Finance Act, 1964, which came into force on the 1st day of April, 1964. Section 137 of the Income-tax Act, 1961, having been deleted by the Finance Act, 1964, the only provision to which we have to turn to find out how far the disclosure of this information respecting an assessee is permissible is that contained in Section 138 of the Act. Sub-section (1) thereof pertains to the powers that the Board or any other income-tax authority specified by it to furnish information relating to any assessee. Clause (b) of that sub-section, which alone is relevant for our purpose, provides :