Punjab-Haryana High Court
Shiv Narain And Ors. vs Jiwan Lal And Ors. on 30 April, 1971
JUDGMENT Harbans Singh, C.J.
1. In a suit for rendition of accounts of a partnership filed by some partners against the other, the defendants summoned some record from the local Income-tax Office. This was objected to and it was stated that such document could not be allowed to be produced nor could any officer of the income-tax department give information derived from any assessment or other documents filed by an assessee with the income-tax office.
2. Apparently, this position was adopted in view of Section 54 of the Income-tax Act, 1922, which prohibited such information being given. Subsequently, in the Income-tax Act of 1961, the above mentioned Section 54 was substituted by Section 137, which was substantially to the same effect. This Section 137, however, was repealed with effect from 1st April, 1964, and, consequently, the prohibition which existed before, was no longer there. Under Section 138 of the Act of 1961, however, there were certain provisions with regard to the disclosure of information respecting assessees. Sub-section (1)(a) provided that 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 any other authority performing any functions under any law, relating to the imposition of any tax or to such officer, authority or body performing functions under any other law, as the Central Government may specify by a notification, any information relating to any assessee in respect of any assessment made under the Act of 1961 or under the Act of 1922, as may be necessary for enabling such officer to perform his functions. Clause (b) of the said Sub-section (1) provides that a person may make an application to the Commissioner and if the Commissioner is satisfied that it is in public interest to do so, he may furnish or cause to be furnished the information asked for.
3. Sub-section (2) of Section 138 of the Act of 1961 provides that 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.
4. The result, consequently, is that instead of the general prohibition, as it was provided under Section 54 of the Act of 1922 and under Section 137 of the Act of 1961, the Central Government was empowered to enforce this prohibition in respect of specified types of assessees, with such exceptions as may be provided. Not only that, under Clause (b) of Section 138(1) of the Act of 1961, any person could apply to the Commissioner for the information to be given and the Commissioner could furnish this information, if he thought such a step to be in public interest, except in so far as a notification makes some prohibition. Under the law, as it stands after Section 137 of the Act of 1961 has been repealed, a court can summon an officer with any document relating to an assessee and can ask such an officer to give information on such document.
5. A notification was issued by the Central Government, being No. S. O. 2048 dated 23rd June, 1965. It was published in the Gazette of India, Extraordinary, dated 23rd June, 1965. It is not necessary to reproduce this notification, because that related only to the banking companies. Even qua these, a number of exceptions were added in which cases the information could be supplied. There is, therefore, no general prohibition.
6. The learned counsel, however, urged that, in any case, all the assessments and statements that were filed or made prior to the repeal of Section 137 of the Act of 1961, would still be covered by the prohibition which was contained in Section 54 of the Act of 1922 and Section 137 of the Act of 1961. In support of his contention, he relied upon a Division Bench judgment of this court in O.P. Aggarwal, Income-tax Officer v. State, [1966] 59 I.T.R. 158 (Punj.) where it was held, after considering the provisions of the General Clauses Act, 1897, that:
"There is nothing in the Income-tax Act, 1961, which manifests an intention that the protection from, and prohibition of, disclosure of assessment records afforded by Section 54 of the Income-tax Act, 1922, would not be applicable to assessments which had been completed before the 1st day of April, 1962, on which the Act of 1961 came into force."
7. In Daulat Ram v. Som Nath, [1968] 68 I.T.R. 779 (Delhi). Khanna J, as he then was, also dealt with a similar matter.
8. The position, therefore, boils down to this that all assessments, which had been completed prior to the repeal of Section 137, of the Act of 1961, would be protected, in so far as they fall within the purview of Section 54 of the Act of 1922 and Section 137 of the Act of 1961, but there will be no prohibition against the summoning of such documents in respect of assessments which were completed after 1st April, 1964, when Section 137 of the Act of 1961 was repealed.
9. This revision is, consequently, accepted to this extent that all the documents which related to the period after 1st April, 1964, can be summoned, but not those documents which related to the assessments which had been completed prior to the said date. There will be no order as to costs.