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Kaderkutty Vs. Agricultural Income-tax Officer, Tellicherry and Others. - Court Judgment

SooperKanoon Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberO. P. No. 851 of 1959 and C. R. P. No. 602 of 1959
Reported in[1962]45ITR401(Ker)
AppellantKaderkutty
RespondentAgricultural Income-tax Officer, Tellicherry and Others.
Cases ReferredMuniyammal v. Third Additional Income
Excerpt:
.....the assessee against disclosure of the particulars of his financial position to his detriment by income-tax officers; it is also well settled that a court cannot require the income-tax officer to produce before it the documents specified in section 54(1) of the income-tax act, or to give evidence in respect of them, whatever be the provisions in the indian evidence act. ' i fail to see how this passage has any relevance in deciding a case under section 74 of the indian evidence act. third additional income-tax officer that :an interest in some other matter which would be better served by the inspection of the document would not be sufficient',must be understood in the context in which they were made, as to whether, when there is dispute between two rival legal representatives of an..........statements or statements made by the assessee; at the same time, cases are not wanting, in which copies of assessment orders or other orders passed in proceedings before the income-tax authorities, have been held to be admissible in evidence at the instance of assessee. a few of these cases are, rama rao v. venkataramayya, semakurti somanna v. venkadari subbarao, naim singh v. tikam singh, buchibai v. nagpur university, suraj narain v. seth jhabhu lal and venkataramana v. varahalu. on a plain reading of section 54(1) there is no room for thinking that two privilege, one a privilege of the assessee, and the other a privilege of the assessee, and the other a privilege of the income-tax officer are envisaged by it; it refers only to one privilege in respect of all documents, including.....
Judgment:

The petitioner is the plaintiff in a suit against the third respondent, instituted in the Sub-Court at Tellicherry, to enforce repayment of an alleged loan of Rs. 20,000. The suit was decreed by that court, but on appeal, this court remanded the case for a fresh decision after recording further evidence. One of the principal items of evidence on which the petitioner relies in the suit is the entry relating to the transaction in each of his two account books. He sought to establish the genuineness of the account books which was impeached by attempting to prove that they had been produced earlier before the Income-tax Officer in assessment proceedings against him under the Madras Plantations Agricultural Income-tax Act, 1955 (V of 1955), which may be referred to hereafter as the 'Act'. There was no reference in the assessment order, exhibit P-1, dated December 31, 1955, to the account books, but a letter, exhibit P-2, was addressed by the petitioner on April 30, 1956, to the Income-tax Officer, pointing out that the account books had been produced by him on November 28, 1955, and praying for a revision of the assessment. After the case was remanded by this court, the petitioner made two applications, exhibits P-5 and P-7, to the Income-tax Officer, requesting that copies of certain records in the assessment file may be furnished to him and a third application, exhibit P-6, that such records may be produced in court. The Income-tax Officer refused to comply with these requests by exhibit P-8 dated July 23, 1959. The petitioner has also made an application to the Sub-Court for the issue of summons to the Income-tax Officer to produce the records, but this was rejected by order dated July 21, 1959, which is sought to be revised in Civil Revision Petition No. 602 of 1959, which was heard along with this petition. The main prayer in O. P. No. 851 of 1959 is for the issue of a writ of mandamus to compel the Income-tax Officer to grant copies and of a writ of certiorari to quash exhibit P-8.

Section 52(1) and (2) of the Act may quoted :

'52. (1) All particulars contained in any statement made, return furnished or accounts or documents produced, under the provision of this Act or in any evidence given or affidavit or deposition made in the course of any proceedings under this Act other than proceedings under this Chapter or in any record of an assessment proceeding or any proceeding relating to the recovery of a demand prepared for the purpose of this act shall be treated as confidential and notwithstanding anything contained in the Indian Evidence Act, 1872 (Central Act 1 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, documents or record or any part of 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, deposition or record, he shall be punishable with imprisonment which may extend to six months and shall also be liable to fine.'

The above provisions are identical with section 54(1) and (2) of the Indian Income-tax Act, 1922, which may be referred to as the 'Income-tax Act', and the law as declared or interpreted under the latter enactment is helpful in deciding this petition. It is well settled under section 54 of the Income-tax Act, that the object of that provision is to afford protection to the assessee against disclosure of the particulars of his financial position to his detriment by Income-tax Officers; it is also well settled that a court cannot require the Income-tax Officer to produce before it the documents specified in section 54(1) of the Income-tax Act, or to give evidence in respect of them, whatever be the provisions in the Indian Evidence Act. These propositions were not contested. It must follow from the latter that the application made by the petitioner to the Sub-Court for the production of the documents was incompetent, and that therefore Civil Revision Petition No. 602 of 1959 has only to be dismissed.

Though the consensus of judicial opinion is that the privilege under section 54(1) of the Income-tax Act is that of an assessee and can therefore be waived by him, the learned counsel for the third respondent contended that such privilege can only be with respect to the documents specified in section 54(1) in the making of which the assessee has a part to play, but that with respect to others with which he is not so directly connected the privilege, such as it is, is that of the Income-tax Officer and not of the assessee. It was further urged that documents of the latter description do not constitute evidence by themselves and have to be proved by examining the Income-tax Officer who made them or in whose custody they are, and if, by reason of section 54(1) he cannot be examined, they cannot go in evidence at all. It may at once be stated that the learned counsel was not able to point to a single decision which has made this distinction on the terms of section 54(1) and (2) between a privilege of the assessee and a privilege of the department. It is accidental that in some of the cases the documents, copies of which were allowed to be furnished to the assessee, were income-tax returns or annexures thereto, or profit and loss statements or statements made by the assessee; at the same time, cases are not wanting, in which copies of assessment orders or other orders passed in proceedings before the income-tax authorities, have been held to be admissible in evidence at the instance of assessee. A few of these cases are, Rama Rao v. Venkataramayya, Semakurti Somanna v. Venkadari Subbarao, Naim Singh v. Tikam Singh, Buchibai v. Nagpur University, Suraj Narain v. Seth Jhabhu Lal and Venkataramana v. Varahalu. On a plain reading of section 54(1) there is no room for thinking that two privilege, one a privilege of the assessee, and the other a privilege of the assessee, and the other a privilege of the Income-tax Officer are envisaged by it; it refers only to one privilege in respect of all documents, including 'any record of an assessment proceeding.' The Income-tax Officer stands in need of no special privilege concerning the 'particulars' referred to in section 54(1) beyond what he can claim and what he is entitled to, under the provisions of the Indian Evidence Act. Far from conferring a privilege on the Income-tax Officer, section 54(1) and (2) seems to impose a restraint on him from making disclosures of the contents of the file. The disjunctive word 'or' in section 54(1) which precedes the clause 'in any record of an assessment proceeding' affords no foundation, whatever, to the above contention of the learned counsel. The learned counsel for the third respondent, relied on a number of decided cases in England which, however, have no bearing on this ban against disclosure in income-tax proceedings; rather, they bear on the principles of English law, upon which the provisions of sections 123 and 124 of the Indian Evidence Act are based, and I not propose to consider them. I overrule this contention of the third respondent.

The petitioners right to obtain certified copies has to be adjudged on the terms and provisions of sections 74, 76 and 65(e) of the Indian Evidence act. Section 74, sub-section (i) and clauses (ii) and (iii) provide, that 'documents forming the acts or records of the acts....... of official bodies and tribunals and of public officers.......' are public documents. In Rama Rao v. Venkataramayya, Leach C.J. delivering the judgment of the full bench, held that : '... the record of an income-tax case must be regarded as the record of the acts of the Income-tax Officer in making his assessment and therefore that any document properly on the record is just as much a public document as the final order of assessment.'

The records specifically concerned in the case were the income-tax return and profit and loss statement furnished by the assessee, which were held to be public documents. In Semakurti Somanna v. Venkadari Subbarao, the income-tax returns and annexures of accounts thereto were held to be public documents. In Naim Singh v. Tikam Singh, an assessee was held entitled to obtain copies of assessment orders made in proceedings held before the Income-tax Officer. In Buchibai v. Nagpur University, copies of orders passed by the officer and of statements made were held to be admissible. Assessment orders were held to be public documents in Rama Rao v. Venkataramayya, Suraj Narain v. Seth Jhabhu Lal, and Venkataramana v. Varahalu. The decisions which strike a somewhat discordant note in Anwar Ali v. Tafozal Ahmed and Devidatt Ramniranjandas v. Shriram Narayandas were not followed by the Madras and Allahabad High Courts in the case just cited. In the Rangoon case, copies of income-tax returns which were issued, were held to be illegal as being in contravention of section 54 of the Income-tax Act. In the Bombay case, the plaintiff was held not entitled to copies of the income-tax return made by another and of an assessment order made upon a firm; incidentally, an income-tax return was held to be not a public document. Promatha Nath Pramanick v. Nirode Chandra Ghose decided that while an assessee may waive his privilege, a joint assessee cannot make use of the particulars in the income-tax file against a co-assessee. These cases are distinguishable; some of the observations in them are against the weight of decided cases referred to above. The learned counsel for the third respondent relied on the following passage in Halsburys Laws of England, Volume 15, page 363, paragraph 651 : 'Wherever an original document is of a public nature, and would of itself be evidence if produced from proper custody, certain kinds of copy of the document are admissible in evidence at common law.'

I fail to see how this passage has any relevance in deciding a case under section 74 of the Indian Evidence Act. It seems reasonable to hold, following the view taken by Leach C.J. in the Madras case, that the records in the assessment file constitute public documents within the meaning of section 74, as forming the acts or records of the acts of a public officer or of an official body. The documents specified in exhibit P-5 of which copies were applied for are therefore public documents.

The right to obtain copies of public documents still depends on the applicants right to inspect them within the meaning of section 76 of the Indian Evidence Act. Section 76 does not state, under what circumstances a person would have an 'interest for the protection of which, it is necessary that liberty to inspect such documents should be given', per Shephard J. in Queen-Empress v. Arumugam. In Mutter v. Eastern and Midlands Railway Company, Lindley L. J. observed : 'When the right to inspect and take a copy is not expressly conferred, the extent of such right depends on the interest which the applicant has in what he want to copy, and on what is reasonably necessary for the protection of such interest.' In Chandi Dhar v. Boistab Chandra Dhar the plaintiff was held to have a right to inspect the loan register in the Bank of Bengal for the purpose of ascertaining particulars about the conversion of certain promissory notes in order to protect his interest in a litigation. I see no reason to interpret the words 'right to inspect' in a restricted or narrow sense, though at the same time, an interest which is illusory is no interest whatever. The observations made in Muniyammal v. Third Additional Income-tax Officer that : 'an interest in some other matter which would be better served by the inspection of the document would not be sufficient', must be understood in the context in which they were made, as to whether, when there is dispute between two rival legal representatives of an assessee, the privilege under section 54 can be waived by any one of them as against the other. The term 'right to inspect' did not directly arise for interpretation as pointed out by the learned counsel for the petitioner, and the observations do not constitute a decision on a disputed issue between the parties. If for instance an assessee wants to prefer an appeal against the assessment, it seems improper to deny him the right to inspect the return, annexures and statements which he had made, documents he had produced, whether he had kept copies of them or not, and also orders passed by the Income-tax Officer from time to time. If so, his 'right to inspect' is not to be negatived on the ground that his purpose is not to prefer an appeal, but is to safeguard his other interests. The right to inspect under section 76 is not to be upheld or rejected, depending upon the purpose for which inspection is sought, though purpose would have a relevance in determining whether the right set up is illusory or not. In Muniyammals case, just cited, the assessee was held entitled to inspect and take copies of the return and the documents produced by him. The larger question, whether any one other than an assessee has a right to inspect, does not arise and need not be decided. I, therefore, hold that the petitioner has a substantial right to inspect the documents specified in exhibit P-5. It is needless to point out that the Income-tax Officer may in a proper case, claim privilege under sections 123 and 124 of the Indian Evidence Act, and in the present case, he did and can legitimately, claim privilege with respect to some of the documents specified in exhibit P-7. But no such claim was made or court arise in the case of the documents specified in exhibit P-5. The prayer in the petition is for the issue of copies described in exhibit P-6, but these not being specific, the learned counsel for the petitioner was content at the close of the hearing to limit his prayer to that in exhibit P-5. It is open to this court to pass appropriate directions.

In the result, mandamus will issue to the first respondent to give copies to the petitioner of (i) the authorisation dated November 25, 1955, by the petitioner to his agent Shri Vellodi, produced before the Agricultural Income-tax Officer on November 28, 1955, together with the endorsement of the officer, and (ii) the proceedings of the Agricultural Income-tax Officer as recorded in the diary and in the docket or order sheet on November 17, 1955, November 28, 1955, December 3, 1955, and June 6, 1956. This original petition is allowed in the above terms with cost, including advocates fee Rs. 100 payable by respondents 2 and 3. The Civil Revision Petition No. 602 of 1959 is dismissed; no costs.


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