RAMA RAO Vs. VENKATARAMAYYA

JUDGEMENT

(1.) The relevant portion of the Order of Reference delivered by Wadsworth, J., on March 13, 1940 was as follows :- The most conclusive piece of evidence on this question of the previous existence of the promissory note for Rs. 24,400 is provided by Exs. E and H which are certified copies of the income statement and profit and loss statement, the latter purporting to have been signed by the plaintiff on 17 May 1933, the former of which sets forth this debt of Rs. 24,400 as due to the respondent. There is, however, a serious difficulty with reference to the admissibility of this evidence. Objection was taken to it at the time when it was tendered and we deem it necessary to refer to a Full Bench the question of its admissibility in view of the decision of our learned brothers Burn and Stodart, JJ., in the case of Mythili Ammal V/s. Janaki Ammal. In our opinion the evidential value of these Income-tax documents is such that if they are admitted, the correctness of the lower Courts conclusion is clear. If they are to be rejected, we shall have to decide hereafter whether the remaining evidence is sufficient to establish the pre-existence of this note for Rs. 24,400, which, if established, seems to us, in view of the defendants denials and suppressions, to warrant the decree which has been given.

(2.) The legal difficulty may be briefly stated. Exs. E and H are both certified copies. If the original is a public document within the meaning of Section 74 of the Evidence Act, then the certified copies are good secondary evidence of that original under Section 65 (e). If these statements are not public documents, we are unable to see how the certified copies can be admitted into evidence under any other clause of Section 65 of the Evidence Act. Section 74 defines public documents as documents forming the acts or records of the acts (1) of the sovereign authority (2) of official bodies and tribunals and (3) of public officers, legislative, judicial and executive, and the term includes also public records kept in British India or private documents. The question is whether an Income-tax return and the statements accompanying it from part of the record of the act of the Income-tax Officer who makes the assessment. In the case just referred to the learned judges decided, without quoting any authority other than the statutory provisions that it was the policy of the law that statements made in Income-tax returns should not be used in evidence against the person making them or against any one else, that income-tax returns could not be proved by secondary evidence and that the income-tax return was not part of the record of the Act of assessment and not a public document as defined in Section 74 of the Evidence Act. In coming to this conclusion, the learned Judges appear to have been greatly influenced by the provisions of Section 45 of the Indian Income-tax Act which prohibits the disclosure by any public servant of particulars contained in an Income-tax return or statement. Now quite clearly this section applies only to disclosures and does not prohibit the Income-tax Officer from giving to the person who made the return a copy of that return. In fact, we are informed that the departmental orders expressly provide for the giving of such a copy to the assessee on application. It seems to us that there is no ground of public policy which would prevent such an assessee from using in evidence such a copy when it has been granted to him. Nor are we convinced that the ground of public policy is a sufficient reason for excluding from evidence any document which is legally admissible under the Evidence Act and is not excluded by any statutory prohibition. This view has been adopted in the case of Venkataramana V/s. Varahalu a decision of Varadachariar and Pandrang Row, JJ., anterior to the decision of Burn and Stodart, JJ., but apparently not brought to their notice. Varadachariar and Pandrang Row, JJ., were actually dealing with a copy of a statement recorded by the Income-tax Officer which clearly was a public document and they held that certified copies of such a statement were admissible notwithstanding the provision of Section 54 of the Indian Income-tax Act. The learned Judges refer to a decision in Anwar Ali v. Tafozal Ahmad wherein a single Judge held that Income-tax returns being made confidential by Section 54 of the Income-tax Act, certified copies of such a return could not lawfully be given and if given could not be used in evidence. In Devidutt V/s. Shriram Narayandoss a Bench of the Bombay High Court held that certified copies of an Income-tax return could not be given in evidence, because the return is not a public document within the meaning of Section 74 of the Evidence Act and that the prohibition is Section 54 of the Indian Income-tax Act was sufficient to warrant the view that a certified copy could not be lawfully obtained and would not be admissible in evidence if obtained. It seems to us that these decisions raise a question of far-teaching importance. With all respect to the learned Judges who have held otherwise, we do not consider that prohibition amongst the disclosure of the contents of an Income-tax return can save any bearing on the admissibility of the contents of that return filed at the instance of the person who made it. If the Income-tax return is a part of the record of the act of the Income-tax Officer making the assessment, a certified copy of the document can lawfully be given, subject to the prohibition against disclosure in Section 54 of the Indian Income-tax Act. If it has been so given then by the terms of Section 65 of the evidence Act it is, no matter who produces it, good evidence of the original, provided that the original is a public document; and we do not think that considerations of public policy can warrant its exclusion from evidence. If an Income-tax return is not a public document, as being part of the record of the Act of assessing officer, it is difficult to see how a plaint of written statement in a civil suit or a complaint in a criminal case can be deemed to be public documents such as can be proved by the production of certified copies. It is the almost universal practice of the Court to grant certified copies of such documents and to admit them in evidence, though the admissibility of a certified copy of a plaint appears to have been successfully challenged in one or two cases, not of this High Court. We are inclined to the view that an Income-tax return being the basis of the Income-tax Officers assessment, must be treated as part of the record of the act of assessment and mush therefore be regarded as a public document of which a certified copy can be giver in evidence. The matter, however, being the subject of somewhat conflicting rulings of Benches of this High Court, we refer to a Full Bench the following question : Whether a profit and loss statement and a statement showing the details of net income, filed by an assessee in support of his return of income furnished under Section 22 of the Indian Income-tax Act, are public documents with reference to Section 74 of the Evidence Act of which certified copies would be admissible under Section 65 (e) of Evidence Act.

(3.) These Appeals and petitions coming on for hearing in pursuance of the aforesaid order of Reference, the Court, The Honourable Sri Alfred Henry Lionel Leach, Chief Justice. The Honourable Mr. Justice King, and The Honourable Mr. Justice Somayya, expressed the following : OPINION LEACH, C. J. - Before proceeding to examine the provisions of the section of the Indian Evidence Act mentioned in the question under reference it is desirable to state the effect of Section 54 of the Indian Income-tax Act, 1922, as in some cases where certified copies of the income-tax documents have been tendered in evidence its provisions have been misunderstood and misapplied. Sub-section (1) of Section 54 of the Indian Income-tax Act states that all particulars contained in a statement made, return furnished or accounts or documents produced under the provisions of the Act or in evidence given in the Court of proceeding under the Act other than proceedings under chapter VIII (which relate to offences and penalties) or in a record of an assessment proceeding, or a proceeding relating to the recovery of a demand shall be treated as confidential, and, notwithstanding anything contained in the Indian Evidence Act, 1872, no Court shall be entitled to require a public servant to produce a document referred to in the section or to give evidence thereon. Sub-section (2) provides for the punishment of a public servant who unlawfully discloses particulars of an income-tax matter. Sub-section (3) sets out the occasions on which disclosure can lawfully be made. It is not necessary to set them out as the provisions of sub-section (3) have no application here and have no bearing on the reported decisions which have relation to the application of section 54.