Central Information Commission
Raghuraman vs Central Board Of Direct Taxes on 5 January, 2023
Author: Saroj Punhani
Bench: Saroj Punhani
के ीय सूचना आयोग
Central Information Commission
बाबागंगनाथमाग , मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
File No : CIC/CBODT/A/2021/144057
Raghuraman ......अपीलकता /Appellant
VERSUS
बनाम
CPIO,
Central Board of Direct Taxes,
Foreign Tax & Tax Research
Division, RTI Cell, 7th Floor,
C Wing, Hudco Vishala Building, 14,
Bhikaji Cama Place, New Delhi-110066. .... ितवादीगण /Respondent
Date of Hearing : 04/01/2023
Date of Decision : 04/01/2023
INFORMATION COMMISSIONER : Saroj Punhani
Relevant facts emerging from appeal:
RTI application filed on : 20/04/2021
CPIO replied on : 06/07/2021
First appeal filed on : 23/07/2021
First Appellate Authority order : 27/08/2021
2nd Appeal/Complaint dated : 07/10/2021
Information sought:
The Appellant filed an RTI application dated 20.04.2021 seeking the following information:
1. Date of which reference was made by the concerned commissioner of the Income Tax/ Director of Income Tax having jurisdiction over this case to the Foreign Tax & Tax Research Division, New Delhi to obtain information from 1 the Competent Authorities of Japan Through Exchange of Information (EOI) Route?
2. Copy of the reference made by the concerned Commissioner of Income Tax/ Director Of Income tax having jurisdiction over this case to the Foreign Tax & Tax Research Division, New Delhi in order to obtain information from the Competent Authorities of Japan Through Exchange of Information (EOI) Route.
3. Date of which reference was made by the concerned commissioner of the Income Tax/ Director of Income Tax having jurisdiction over this case to the Foreign Tax & Tax Research Division, New Delhi to obtain information from the Competent Authorities of Korea Through Exchange of Information (EOI) Route?
4. Copy of the reference made by the concerned Commissioner of Income tax/ Director of Income Tax having jurisdiction over this case to the Foreign Tax & Tax Research Division, New Delhi in order to obtain information from the competent authorities of Korea through Exchange of information (EOI) route.
5. Date on which reference was made by the Foreign Tax & Tax Research Division, New Delhi to the Competent Authorities in Japan?
6. Copy of the Reference made by the Foreign Tax & Tax Research Division, New Delhi to the Competent Authorities in Japan.
7. Date on which reference was made by the Foreign Tax & Tax Research Division, New Delhi to the Competent Authorities in Korea?
8. Copy of the reference made by the Foreign Tax & Tax Research Division, New Delhi to the Competent Authorities in Korea.
9. Whether any Reply has been received from the Competent Authorities in Japan in response to the reference made by foreign Tax & tax Research Division, New Delhi? If so, a copy of the same.
10.Whether any reply has been received, from the competent Authorities in Korea in response to the reference made by Foreign Tax & Tax Research Division, New Delhi? If so, a copy of the same.
The CPIO replied to the appellant on 06.07.2021 rejecting the RTI application stating as under:-
"....Section 3 of RTI Act provides:
Subject to the provisions of this Act, all citizens shall have the right to information. (emphasis supplied) 2 As seen from above, Section 3 of RTI Act does not entitle a company to seek information under the RTI Act, thereby this application is inadmissible. In this regard, reliance is also placed on order dated 28.07.2015 of Central Information Commission, New Delhi in the case of M/s Indian Technomac Company Limited (through Mr. Rahas Bihari Panda, Authorized Signatory and Company Secretary) v/s Andhra Bank, New Delhi Zone [CIC/SH/A/2015], wherein a similar issue was examined and the Hon'ble CIC held that M/s Indian Technomac Company Ltd. were the RTI applicant and the Appellant before the FAA and are the Appellant before the commission. As a legal entity, they cannot seek information under the RTI Act. The CIC also observed therein that, at best, even if it is assumed for the sake of argument that the information was sought by the appellant (individual), the application can be regarded as having being filed in his individual capacity, thus, making such individual a third party to the information sought by him and bringing into play the fiduciary relationship envisaged under Section 8(1)(e) of the RTI Act.
In view of the above, the RTI application filed by the applicant on behalf of the company [M/s GU Crude Carriers Pvt. Ltd.) is not admissible.
Without prejudice to the above, it is to be noted that disclosure of tax related information and information sought/obtained from foreign governments in confidence as sought above, is exempted under Section 8(1)(a) and 8(1)(f) of the RTI Act. Further, if the application were to be treated as filed by a citizen, it is to be noted that the application stated above amounts to seeking information which can hamper investigation. Therefore, information sought in this application is exempted under Section 8(1)(h) of the RTI Act. In this regard, reliance is also placed on the decision of the CIC dated 10.07.2007 in the case of Shri Shanker Sharma and M/s First Global Stockbroking Pvt. Ltd v/s the DIT(lnv.)-ll, Mumbai [CIC/AT/A/2007/00007], wherein it was discussed that investigation into tax evasion can be said to be over or complete, only after the final adjudication about the tax liability had been made after the matter has gone through all the stages of appeals and revisions as well as a final decision about prosecuting or not prosecuting that person has been taken by an appropriate competent authority.
The position delineated in paragraph 6 above has also been upheld in the decision of the CIC dated 11.11.2019 in the case of Prakash Eswanth vs Central Board of Direct Taxes [CIC/CBODT/A/2018/159757 -BJ]..."
Being dissatisfied, the appellant filed a First Appeal dated 23.07.2021. FAA's order dated 27.08.2021, upheld the reply of CPIO.
3Feeling aggrieved and dissatisfied, the appellant approached the Commission with the instant Second Appeal.
Relevant Facts emerging during Hearing:
The following were present:-
Appellant: Represented by K. Vishva Padmanabhan present through video- conference.
Respondent: Shreyans Gupta, U. S. & CPIO present through intra-video conference.
The Rep. of the Appellant raised his arguments in the instant Appeal on the following lines -
"....A question may arise as to whether the case of a Firm is different from that of a company? In this regard following observations of Chagla, C.J. in Iron and Hardware (India) Co. v. Firm Sham Lal and Brothers, (AIR 1954 Bom 423) are pertinent:
"In my opinion it is clear that there is no such legal entity as a firm. A firm is merely a compendious way of describing certain number of persons who carry on business as partners in a particular name, but in law and in the eye of the law the firm really consists of the individual partners who go to constitute that firm. Therefore, the persons before the tribunal are the individual partners of the firm and not a legal entity consisting of the firm."
Even if it were conceded that a company or a corporate body is a legal entity distinct from its shareholders and it is not in itself a citizen, it is a fact that all superior Courts have been admitting applications in exercise of their extraordinary jurisdiction from Companies, Societies and Associations under Article 19 of the Constitution of which the RTI Act, 2005 is child. Very few petitions have been rejected on the ground that the applicants/ petitioners are corporate bodies or Companies or Associations and, as such, not "Citizens". This Commission also has been receiving sizeable number of such applications from such entities. If the Courts could give relief to such entities, the PlOs also should not throw them out on a mere technical ground that the applicant /appellant happens to be a legal person and not a citizen.
In conclusion we direct that an application/ appeal from an Association or a Partnership Firm or a Hindu Undivided Family or from some other group of individuals constituted as a body or otherwise should be accepted and allowed. The CPIO, CPWD, Kolkata will dispose of the present application of Shri Talukdar 4 accordingly, as mandated by Secs. 6 and 7 of the RTI Act, 2005 within thirty days of the receipt of this Decision Notice"
As per the ratio of the above cited decision of the Hon'ble CIC, it is prayed that in light of the relief due to the appellant a pragmatic view may be taken and this respected authority may be pleased not to reject the application on technical ground. This decision of the Hon'ble CIC has been rendered taking into consideration that a few petitions have been rejected on the ground that applicants are legal entities and not citizens of the country. It is therefore most humbly prayed that the application may be admitted and processed to provide the information that the applicant has sought for.
It is humbly submitted that FAA has not mentioned as to how the above decision is distinguishable on facts. It clearly lays down the principle that RTI applications should not be rejected on technical grounds.
Further, in the case of Shri Prakash Eswanth v CPIO and Administrative Officer in CIC/CCITA/A/2018/162229-BJ, (order dated 11.11.2019), this respected authority has held as under:
"Having heard both the parties and on perusal of the records, the Commission observed that in the instant matter, although the RTI application was filed by the Appellant in his capacity of the Director of lkshu Infrastructure Pvt., Ltd., he had clearly mentioned his name i.e., Prakash Eswanth in the application. Hence, the contention of the Respondent that the application was not filed by a citizen does not hold in the light of the reasoning above. In this context, the Commission observed that it is the duty of the CPIO to provide a reasoned/ clear/ cogent and precise response to the information seeker after due application of mind."
In view of the above judicial precedents, it is humbly submitted that the appeal should be admitted.
In the submissions furnished by the Respondent, it has been stated, relying on the decision in the case of Indian Technomac, supra that even if it is assumed that the application is admissible, it can be at best considered as an application file din his individual capacity in which he would become a third party to the information sought for bringing into play Section 8(1)(e) of the Act i.e., information available to a person in a fiduciary relationship.
In this connection, Section 8(1)(e) of RTI Act reads as follows: "Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen-
Xxx 5 Section 8(1)(e) of the RTI Act guards personal information of person including public authority when it under the fiduciary relationship. Fiduciary relationship is basically a relation of trust between the fiduciary and beneficiary under which one party relies on the judgement and opinion of another. It is humbly submitted that there is no sensitivity in the information requested where the disclosure would be detrimental to the fiduciary relationship between the person and the public authority. The FT&TR Division does not hold the information solicited in a fiduciary relationship with the company. Hence, there is no question of applying the specific provision to deny information on the assessment to the appellant. Further, in this connection, the relevant portion of the Guide to RTI Act, updated as on 28.11.2013 is reproduced for ready reference of this respected authority:
"Supply of Information to Associations etc. The Act gives the right to information only to the citizens of India. It does not make provision for giving information to Corporations, Associations, Companies etc. which are legal entities/persons, but not citizens. However, if an application is made by an employee or office-bearer of any Corporation, Association, Company, NGO etc. indicating his name and such employee/office bearer is a citizen of India, information may be supplied to him/her. In such cases, it would be presumed that a citizen has sought information at the address of the Corporation etc."
Therefore, where the information is sought by an employee of a private company, there is no bar for the provision of the information to the person concerned and the information should not be denied on technical grounds. Information not exempted u/s. 8(1)(e) of the Act:
At this juncture, it is relevant to reproduce the provisions of section 8(1)(e) of the RTI Act which reads as follows:
"8. Exemption from disclosure of information. (1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,
(e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;"
In this connection, attention of this respected authority is invited to the meaning of the term "fiduciary":
The Advanced Law Lexicon, 3rd Edition, 2005, defines fiduciary relationship as:
"A relationship in which one person is under a duty to act for the benefit of the other on the matters within the scope of the relationship. Fiduciary relationship usually arises in one of the four situations:6
(1) When one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) When one person assumes control and responsibility over another, (3) When one person has a duty to act or give advice to another on matters falling within the scope of the relationship, or (4) When there is specific relationship that has traditionally been recognised as involving fiduciary duties, as with a lawyer and a client, or a stockbroker and a customer."
Fiduciary relationship is basically a relation of trust between the fiduciary and beneficiary under which one party relies on the judgement and opinion of another. Fiduciary relation is not pari-passu with confidentiality and privacy, it is a relation of trust under which one party (beneficiary) provides information to other party (fiduciary) and that other party has to secure the information. In such cases, as such there is no agreement between the two parties that the information needs to be kept safe, but due to the trust shown by fiduciary, the information need to be kept immune from the scrutiny of the public authority.
In other words, a fiduciary relationship is one where the key element is that the relationship is principally characterized by trust and the information is given for use only for the benefit of the giver. The traditional definition of a fiduciary is a person who occupies a position of trust in relation to someone else, therefore requiring him to act for the latter's benefit within the scope of that relationship.
Thus, it can be said that, by use of the term "fiduciary', section 8(1)(e) of the RTI Act guards personal information of persons including public authority when it is under the fiduciary relationship.
However, in the instant case, it is humbly submitted the information that has been sought for is purely pertaining to the Income Tax assessment of the company. It may be noted that the information sought for is not the personal information of any third party but only information pertaining to the company.
Under this circumstance, it is most humbly prayed that the information sought for by the undersigned on behalf of the company in no way pertains to any third party and that the same cannot be denied u/s.8(1)(e) of RTI Act, 2005.
With regard to the submissions made in this connection by the Respondent regarding confidentiality of information obtained through the Exchange of Information (EOI) route, vide Paragraph 2 thereof, the contentions of the appellant are as follows:
(i) Although, there are strict rules relating to confidentiality laid down in Para 2 of Article 26 of the OECD Model Convention that cannot be breached and it may not be possible to share the actual content of the information that is shared by the 7 Competent Authority of the other Contracting State, if the information is such that it is going to be used in the assessment of the company, the same is definitely required to be shared with the representatives of the company since the same needs to be evaluated by the authorized representative of the assessee in transfer pricing proceedings. If the same is not being shared with the company's representative and is used in assessment against the company, it would tantamount to violation of principles of natural justice. Therefore, it is humbly submitted that the information obtained through the E01 route should be shared with the company's representative since it directly pertains to the company is sought to be used in the assessment proceedings of the company.
(ii) Without prejudice to the contention that the information obtained vide the E01 route should be shared in response to the RTI application, it is humbly submitted that wherever the dates of seeking and obtaining the information are requested, the request should not be denied. This is because it is relevant in determination of time limit for completion of assessment. The details requested through the E01 route could also be shared since there is no breach of confidentiality in sharina that input.
Xxx In this connection, it is submitted that an application requesting similar information was made to the Transfer Pricing Officer in the case of applicant which was disposed vide order dated 21.04.2021. Thereafter, the appellant preferred an appeal before the First Appellate Authority on 04.05.2021 and the same was disposed vide order dated 08.06.2021 for the reasons being 1. The information sought was exempted u/s.8(1)(j) of the Act and 2. The Central Public Information Officer was not in possession of the information. Consequently, the appellant filed an appeal before the Second Appellate Authority on 12.07.2021.
The Central Information Commission disposed the said appeal directing the Central Public Information Officer to provide the appellant with the "Dates" which were sought by the appellant in points 1-12.
The relevant portion of the order by this respected authority is reproduced below:
"Commission directs the CPIO to revisit points 1-12 of the instant RT1 Application and adequately liaise with the concerned record holders [i.e CIT(TP), FT & TR etc.] to ascertain the applicability of Section 8(1)(f) of the RT1 Act for the said points in terms of the references/records initiated 'by' the tax authorities and provide a cogent pointwise reply/information to the Appellant. The CPIO shall however ensure that the `dates, wherever sought for at points 1-12 and if available with her office or other concerned record holders 11.e CIT(TP), FT & TR etc.] shall be procured and be provided to the Appellant. If record of the 'dates' is not available with the CPIO's office or the other concerned record holders, a categorical reply to this effect shall be intimated to the Appellant."8
From the above, it is clear that in similar instances the Hon'ble Central Information Commission has directed the CPIO into providing 'dates' sought for in the application made. It is to be noted that the Hon'ble Central Information Commission has also directed the CPIO to ascertain the applicability of section 8(1)0) of the Act stating that "mere absence of public interest does not call for the invocation of Section 8(1)0) of the RTI Act "Copy of the order dated 20.10.2022 by the Hon'ble Central Information Commission is enclosed for the ready reference of this respected authority.
In this connection, it is to be noted that a letter dated 08.12.2022 was issued by the Deputy Commissioner of Income Tax, Transfer Pricing Officer -- 2(1) to the Under Secretary, Central Board of Taxes directing the same to provide the appellant with the information sought in compliance with the order of the Hon'ble Central Information Commission.
xxx From the above, it is clear that in the instant case:
1. The information sought for is not the personal information of any third party but only information pertaining to the company in which the undersigned is a director. Hence the provisions of section 8(1)(e) are not invocable.
2. The information sought for by the undersigned is something that is in connection with the company (in which the undersigned is a director) and by no stretch of imagination the disclosure of which can become something that would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence. Hence, the same is not exempt u/s.8(1)(a) of the RTI Act, 2005.
3. The information sought for is not something that has been received under confidence from a foreign government and hence is not exempt u/s.8(1)(f), if at all, only information, if any received from the competent authorities in Japan and South Korea can be considered as falling within the purview of section 8(1)(f). The rest of the information sought is not exempt and hence may please be provided.
4. The information sought for is not something that would hamper investigation as envisaged in section 8(1)(h) of the RTI Act, 2005. Firstly, there are no investigations pending. Secondly, even if the Transfer Pricing Proceedings are considered to be investigations, it is not something that would hamper any investigation. Further, the Central Public Information Officer has not provided satisfactory reasons to demonstrate that the information sought is in the nature such that it cannot be disclosed by virtue of provisions of section 8(1)(h) of the RTI Act, 2005...."
In response to the contentions of the Appellant's rep ; the CPIO reiterated his earlier reply on the plea that the instant RTI Application is not maintainable as it 9 has been filed by a Company and not by a citizen in terms of Section 3 read with Section 6 (1) of RTI Act; thus the RTI Application has been rejected and this fact was duly intimated to the Appellant.
Decision:
The Commission remarked at the outset that the similar issue regarding maintainability of an RTI Application filed by a legal entity be that a Company has already been heard and disposed of by this bench vide Second Appeal no. CIC/CCACH/A/2020/108887 on 22.12.2021 with the following observations -
"...Decision:
The Commission at the outset observes from a perusal of the facts on record that the instant Appeal is not maintainable as it is based on a defective RTI Application. The RTI Application/First Appeal/Second Appeal under reference has been filed by a Private Limited Company.
It may be noted that Section 3 of the RTI Act provides for that "subject to the provisions of this Act, all citizens shall have the right to information.
Also, Section 6(1) of RTI Act says "A person" to seek information and not the legal entity which in this case is a Private Limited Company. Section 6(1) of the RTI Act is reproduced hereunder for reference:
"6. Request for obtaining information--(1) A person, who desires to obtain any information under this Act, shall make a request in writing or through electronic means in English or Hindi in the official language of the area in which the application is being made, accompanying such fee as may be prescribed, to--"
In view of the foregoing observations, the instant Appeal is not maintainable."
Considering the applicability of ratio of abovementioned decision, the arguments tendered by the Rep. of Appellant in support of his contention are rendered inconsequential.
In view of the foregoing observations, the instant Appeal is dismissed as not maintainable.
10Notwithstanding the aforesaid, attention of both the parties are invited to the clause 4 of the CIC's hearing notice which is as under -
"....4. All the parties may submit their written submission, if any, to the Commission at least 3 working days before the date of hearing. A copy of the same shall be served upon opposite party. If any party wishes to make online submission, the same may be sent to the Commission's link only viz., http://dsscic.nic.in/online- link-paper-compliance/add....."
In view of the above said point, both the parties are advised to provide a complete copy of his latest written submission along with the annexures free of cost with the opposite party in a time bound manner.
The appeal is disposed of accordingly.
Saroj Punhani (सरोज पुनहािन) हािन) Information Commissioner (सूचना आयु ) Authenticated true copy (अिभ मािणत स#यािपत ित) (C.A. Joseph) Dy. Registrar 011-26179548/ [email protected] सी. ए. जोसेफ, उप-पंजीयक दनांक / 11