Patna High Court
Smt. Pandei vs Babulal Sah And Ors. on 26 April, 1957
Equivalent citations: AIR1958PAT237, [1957]32ITR269(PATNA), AIR 1958 PATNA 237
ORDER C.P. Sinha, J.
1. This is an application against the order of the Court below holding that, under the provisions of Section 54 (1) of the Income-tax Act the papers, namely, the assessment orders and returns filed by the firm Jairamdas Sah Babulal, are confidential and, therefore, the Income-tax Officer should not be compelled to produce those papers in Court.
2. Mr. Chatterji has submitted that the Court below was wrong in construing Section 54 (3) (m) of the Income-tax Act, and that, if properly construed, it should have been held that the papers needed by the petitioner were papers which are covered by the exception, namely, the exception mentioned in Sub-clause (m) of Clause 3. He has further argued that, the Income-tax Officer having chosen to give certified copies of certain documents, it does not lie in his mouth to refuse certified copies of the documents in question.
3. To understand the argument of Mr. Chatterji, it is necessary to state a few facts. The plaintiff-petitioner is the widow of one Sriniwas Sah. She has brought a suit for a declaration that the partnership business carried on under the name and style of "Jairamdas Babulal" stood dissolved from the 3rd August, 1950, the date on which Sriniwas Sah, one of the partners of the firm, died, and for full accounts of the partnership business from the beginning up to date, and for some other reliefs. One of the defences was that the late Sriniwas Sah was not a partner of the firm "Jairamdas Babulal" at all and that he had no concern with the assets and profits of the said firm.
It is stated that the firm Jairam Das Sah Babulal had filed returns of income in certain years, and that if certified copies of those returns were produced in Court, it would eslablish beyond doubt that the plaintiff's husband, namely, Sriniwas, was a partner of the firm and that would, therefore, disprove the allegation of the defendants that he was not. I must confess that, if unfettered by law, I may have directed certified copies of the returns aforesaid to be issued and the documents and the assessment orders concerned to be produced in Court because those documents, if correctly reported by the plaintiff, had established beyond doubt her case and disestablished the case of the defendants; but, in my opinion, the law is against it, and for very good reasons of public policy Section 54 of the Income-tax Act provides :
"All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of this Act...... shall be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act, 1372 (I of 1872), no Court shall, save as provided in this Act, be entitled to require any public servant to produce before it any such return, accounts, 'locumeuts, or record or any part of any such record or to give evidence before it in respect thereof."
(2) If a public servant discloses any particulars contained in any such statement, return, accounts, documents, evidence, affidavit......he shall be punishable with imprisonment which may extend to six months, and shall also be liable to fine.
(3) Nothing in this section shall apply to the disclosure --
* * * * *
(m) of so much of such particulars, to the appropriate authority, as may be necessary to establish whether a person has or has not been assessed to income-tax in any particular year or years. Where under the provisions of any law for the time being in force such fact is required to be established;....."
These are the relevant provisions of Section 54. Unless the case in hand is covered by the exception, namely, Sub-clause (m), the petitioner is not entitled to an order upon the Income-tax Department either for production or for issue of certified copies of the returns submitted by and the assessment orders, passed on, the firm Jairamdas Sah Babulal. As I said, the principle behind Section 54 is that all such documents, as are mentioned therein, filed or statements made before the Income-tax Department are all very confidential in nature, the object being that people, that is the assessees, should feel that they can freely state the facts with regard to their income which might involve confidential matters relating to their business without fear of the matters being disclosed.
It is with that end in view to give absolute freedom to the income-tax assessees to make statements of their income to the department untrammelled by any fear of disclosure of those statements that such restrictions have been imposed on the grant of copies and production of such documents. Reading the provision contained in Sub-clause (m) it appears to me that no person, other than the maker of the return, is entitled to a certified copy or production of that return: Mr. Chatterji submitted that under1 this provision contained to Sub-clause (m), the plaintiff who is the wife of Sriniwas is entitled to the copy and production of the return filed by the firm of which her husband was a partner.
I repeatedly asked Mr. Chatterji to give me any authority in which it has been held that a person other than the assessee has been allowed the privilege of taking certified copy or obtaining an order of the Court for production of the income-tax returns or the assessment order but no authority has been produced before me in support of his interpretation of Sub-clause (m). I shall briefly deal with the authorities which Mr. Chatterji has placed before this Court. The case of Venkata Seshavatharam v. Venkata Ran-gayya, AIR 1947 Mad 111 (A), is not an authority in support of the proposition of Mr. Chatterji. That case is only an authority that Sub-clause (m) of Section 54 (3) should be construed not in a manner as to exclude Civil Court, including also the appellate Court, to exercise its discretion under section provision as it was argued in that case that it was only the Collector who could pass necessary orders under Sub-clause (m); and having held that the Civil Court also was entitled under Section 54 (3) (m) to ask for production of documents, the document, namely, the return of income-tax, could be produced at the instance of the person who had made the return, namely, one Venkata Rangayya, manager of a Hindu undivided family.
The case of Venkataramana v. Varahalu, AIR 1940 Mad 303 (B), is again a case where the plaintiff, though a minor, was supported by some of the defendants who were later transposed to the category of plaintiffs, and some return or documents filed, by those defendants were ordered by the Court to be produced by the Income-tax Department. One of the observations made by Mr. Justice Varadachariar was that it was "difficult to see anything illegal in the grant of copies of such documents to the assessee himself." In Venkata Gopala Narasimha Rama Rao v. Ven-kataramayya, AIR 1940 Mad 768 (FB) (C), a copy of a certain document filed before the Income-tax Department was needed by the assessee himself, and the reason given was. to quote the words of his Lordship the Chief Justice, "Section 54 docs not make the issue of a certified copy of an income-tax return to an assessee unlawful- 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 assessce is concerned he is not bound to treat the document as confidential".
Reliance was also placed upon the case of Official Assignee of Bombay v. Mustafa Murtaza, AIR 1950 Bom 264 (D). It was not a case of return of income-tax but was a case where, along with documents needed by the Income-tax Department, some other documents were filed which were not necessary for the purpose of the assessment of the income-tax and it was held that those other documents could be made available to the party in that particular suit. Mr. Varma, appearing on behalf of the opposite party, has referred to a case reported as Rangaswami Naicker v. Raju Naicker, (1941) 9 ITR 693: (AIR 1942 Mad 276 (1)) (E). In that case, it was submitted on behalf of the applicants who were partners in a firm with some other persons, who-had deposited certain books, that they were entitled to inspect and obtain an order for production, and the Court held --
"The wording of Section 54 (1) is perfectly clear. It is emphatic in its language and mandatory in its provisions. It may be, that, as a matter of practice, the Income-tax authorities may allow a partner to inspect the books of his firm which have been deposited with them as would appear to be the case from the observations in the course of the opinion expressed in (1940) 2 Mad LJ 257, at p. 267: (AIR 1940 Mad 768 at p. 773) (C), in which the learned Chief Justice referred to paragraph 5 of the Notes of Instructions complied for the guidance of Income-tax Officers. In no way is this any departure or exception to the provisions of Section 54 of the Income-tax Act, There is no dispute regarding the statement of the Income-tax Officer in his affidavit that the account book in his possession was produced in the course of proceedings under the Indian Income-tax Act. That being so, in my view, the applicants are not entitled to production or even to an examination as of right of the book which the Income-tax Officer has. The protection which is given by Section 54 covers the present case and in consequence this application must be dismissed with costs of the Income-tax Officer".
Mr. Chatterji also made a reference in this connection to Section 46 of the Partnership Act, but, in rny opinion, it is not necessary to refer to that section because that is wholly irrelevant. I would, therefore, hold that under the exception, Sub-section 3(m) of Section 54 of the Income-tax Act, the plaintiff is not entitled to a certified copy or to the production of the return and assessment order filed before and passed by the Income-tax Department.
4. Mr. Chatterji also submitted that the Income-tax authorities have themselves given certified copies of certain assessments of the late husband of the plaintiff, namely, Sriniwas. In my opinion, however, the fact that copies of certain documents have been given, which the Income-tax authorities thought the plaintiff should have been given, can by no means be a reason for compelling the Income-tax authorities to give certified copies of the documents in question.
5. In the result, I would discharge the rule and dismiss the application with costs. Hearing fee Rs. 32/-.
6. There is an application for making the Income-tax Officer a party to this application. Notice was issued to the Income-tax Officer concerned, and the learned Standing Counsel has appeared in support of the Order and the Court has been benefited by his assistance. I, however, think that it is no use making the Incorne-tax Officer a party to this application. That application of the petitioner is also dismissed with costs to the department. Hearing fee Rs. 32/-.