Full Judgment
The applicants are the plaintiffs in the suit which was referred to the learned Official Referee for enquiry. They served upon the Income-tax Officer a subpoena requiring him to produce some account books in his possession which are said to have belonged to the firm of Cunniappa Nayagar for the year 1930 and 1934-35. The Income-tax Officer does not produce them.
The present application is made by the plaintiffs against the Income-tax Officer calling upon him to show cause why he should not be directed to produce the account books mentioned in the subpoena. In his affidavit, the Income-tax Officer says that of the account books mentioned in the subpoena he has only one book containing the monthly trial balance for the year 1930 and further he says this book was produced in the course of proceedings under the Income-tax Act for the year 1938-39. Learned Counsel on his behalf claims that the Income-tax Officer is entitled to refuse to produce the books either in pursuance of the subpoena served upon him or under any order of Court. This claim is made under the provisions of Section 54(1) of the Income-tax which are as follows :-
'All....... accounts.... produced.... in the course of any proceedings under this Act........ shall be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act 1872, no Court shall, save as provided in this Act, be entitled to require any public servant to produce before it any such......... accounts'.
Sub-section (2) gives a number of exceptions to sub-section (1); but learned Counsel for the applicants conceded that he cannot bring himself within any of these exceptions. The seriousness with which the Legislature considers the provisions in sub-section (1) is reflected by sub-section (2) of the section which renders any public servant liable to punishment with imprisonment for six months in the event of his disclosing any particulars contained in any accounts which are produced as contemplated in sub-section (1).
It is argued on behalf of the applicants that inasmuch as they are partners in the firm with the persons who deposited these books as such, they are entitled to inspect and to obtain an order requiring their production in Court. 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 them as would appear to be the case from the observations in the course of the opinion expressed in Rama Rao v. Venkataramayya : [1940]8ITR450(Mad) in which the learned Chief Justice referred to paragraph 5 of the Notes of Instructions compiled for the guidance of Income-tax Officers. In no way is this any departure or exception to the provision of Sec. 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 Sec. 54 covers the present case and in consequence this application must be dismissed with costs of the Income-tax Officer.
Application dismissed.