Nazir Mahammad Vs. Jamila Bibi and ors. - Court Judgment

K.N. Misra, J.

1. Opposite parties Nos. 1 to 3 who are plaintiffs have instituted T.S. No. 300 of 1969 in the court of the learned Subordinate Judge of Cuttack. In essence it is a suit for partition. The business assets of the family are included in the hotchpot for partition and such business was being run in the names of M/s. Roshan Mahammad and M/s. Nazir Mahammad.

2. When the trial commenced, an application was made by the plaintiffs for summoning the income-tax records relating to the asssessment years 1953-54 to 1968-69 from the Income-tax Officer, Ward C, who was the concerned assessing officer. No notice was given of this application to defendant No. 2, who is the petitioner in this court, but orders were passed calling upon the Income-tax Officer to produce the records. On July 9, 1970, the documents were produced by an inspector of the income-tax department. At that point the objection was raised by the defendants about the legality of the order calling for production of the documents and the power of the court to receive those documents. This objection was on the basis that there was a bar against production of these documents under the Income-tax Act, 1961. The objection was over-ruled by the learned trial judge and he held that the order of production was justified and he was competent to receive the documents from the income-tax department. The present revision application is directed against that order.

3. Certain facts which are material to be indicated for convenient disposal of the revision application may now be stated. It is conceded that while the application was made on July 7, 1970, no copy thereof was given to defendant No. 2 and he had no notice of either the application or making of the order on July 7, 1970, in regard to summoning of the documents. Though the papers relating to assessment years 1953-54 to 1968-69 had been summoned, it is now stated by Mr. R. C. Mohanty for the plaintiffs-opposite parties Nos. 1 to 3 that he does not want production of the papers up to the assessment year 1964-65 and it would be sufficient for his pur-purpose if the papers for the assessment years 1965-66 to 1968-69 are produced. In this civil revision I shall, therefore, confine the contentions and the ultimite decision to the legality of the learned trial judge's order in the matter oi production of these papers only.

4. Under section 137 of the Income-tax Act, 1961, the bar against disclosure was provided. It was to the following effect:

'(1) All particulars contained in any statement made return furnished or accounts or documents produced under the provisions 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 Chapter XXII, or in any record of any assessment proceeding, or any proceeding relating to recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the Indian Evidence Act, 1872 (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 any such record, or to give evidence before it in respect thereof.

(2) No public servant shall disclose any particulars contained in any such statement, return, accounts, documents, evidence, affidavit, deposition or record . . . .'

5. In Sub-section (3) of Section 137 exceptions were provided. Exception (iv) may be extracted :

'(3) Nothing in this section shall apply to the disclosure-- ....(iv) of any such particulars to a civil court in any suit or proceeding to which the Government or any income-tax authority is a party, which relates to any matter arising out of any proceeding under this Act or under any other law for the time being in force authorising any income-tax authority to exercise any powers thereunder . . . .'

6. There was a similar provision in Section 54 of the Indian Income-tax Act, 1922. But, as it appears, by the Finance Act of 1964 the provisions of Section 137 have been omitted with effect from April 1, 1964. By the same Act, Section 138 was recast and ran to the following effect :

'(1)(a) 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-

(i) any officer, authority or body performing any functions under any law relating to the imposition of any tax, duty or cess, or to dealings in foreign exchange as defined in Section 2{b) of the Foreign Exchange Regulation Act, 1947 (7 of 1947); or

(ii) such officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify by notification in the Official Gazette in this behalf,

any such information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922 (11 of 1922), as may, in the opinion of the Board or other income-tax authority, be necessary for the purpose of enabling the officer, authority or body to perform his or its functions under that law.

(b) where a person makes an application to the Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922 (11 of 1922), on or after the 1st day of April, 1960, the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law.

(2) Notwithstanding anything contained in Sub-section (1) or any other law for the time being in force, 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 on the order.'

7. Sub-section (1) has no material connection. The Central Government may, having regard to the practices and usages customary or any other relevant factors, by order notified in the Officical 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. I have been referred to two such orders which have been made by exercise of the authority conferred under Sub-section (2) of Section 138. The first one is contained in S.O. 2048 dated June 23, 1965, published in the Gazette of India in its Extraordinary issue dated June 23, 1965, and the second one is contained in S.O. 1043 dated March 30, 1966, similarly published in the Gazette of India of that date in its Extraordinary issue. These, admittedly, are with reference to an assessee being a banking company within the meaning of Section 34-A of the Banking Companies Act, 1949. Thus, as it appears, after the omission of Section 137 from the statute, the restriction in resoect of disclosure of information has been confined only in respect of the banking companies and none other. Three contentions were raised by Mr. Palit before me :

(1) According to him, the bar under Section 137 continues by virtue of Section 6 of the General Clauses Act even after the omission of Section 137 from the statute;

(2) As a result of the notification under Section 138(2) the ban has been made more rigorous ; and

(3) Under section 138(1) an application is to be made to the Commissioner and the Income-tax Officer has no jurisdiction to make any disposal.

8. The scope of Section 6 of the General Clauses Act is well known. Two decisions were placed before me by Mr. Palit in support of his contention with reference to Section 6 of the General Clauses Act. Those are the case of Daulat Ram v. Som Nath, [1968] 68 I.T.R. 779 (Delhi) and the case of Ramakrishna Mudaliar v. Mrs. Rajabu Fathima Bukari,[1965] 58 I.T.R. 288 (Mad.) Reliance was placed in the latter case on a decision of their Lordships of the Supreme Court in State of Punjab v. Mohar Singh, A.I.R. 1955 S.C. 84 for the application of Section 6 of the General Clauses Act. Mr. Mohanty sought to place reliance en another decision in Income-tax Officer v. Ramaratnam, [1965] 58 I.T.R. 297 (Mad.) where a contrary view was taken about the application of Section 6 of the General Clauses Act and it was held that the protection regarding rights accrued under an old Act given by Section 6 of the General Clauses Act was not an unqualified one and such rights and privileges were saved only when no contrary intention appeared, and Sadasivam J. construed in the amended provision of Section 138 a contrary intention.

9. I am not called upon in this case to examine the correctness of this aspect on account of the fact that in this court it has been clarified by the parties that they do not want to call for any papers relating to an account-ing period prior to April 1, 1964. It is conceded by the learned counsel on both sides that for a period after April 1, 1964, the question of application of Section 6 of the General Clauses Act does not arise, because after the omission of the provision from the statute the ban cannot continue to exist in respect of a period subsequent to the deletion.

10. The scope of the ban contemplated under Section 138(2) of the Act has now been limited only to the hanking companies and there is no scope for the contention that by virtue of such notifications there can be any restriction upon disclosure qua the assesses in this case. That contention of Mr. Palit has, therefore, to be negatived.

11. Now I shall come to the last contention raised in this case which is on the basis of the provision contained in Section 138(1)(b) which I have already extracted. That provision is an enabling one and it is open to the Commissioner to make a disclosure to anybody if the terms contained in Section 138(1)(b) are satisfied. That certainly does not cover a case of the present type when the court calts for certain papers for production. The ban against disclosure was contained in Section 137 before its deletion and can be said to be still contained ia Sub-section (2) and the notifications made thereunder. Section 138(1)(b) does not deal with the restriction. It is an enabling provision.

12. Normally a court constituted under the Code of Civil Procedure is entitled to call for documents ut the instance of parties, and in the present case such a direction was given. Unless there is a restriction or ban under any particular statute such power is in the discretion of the court and is open to be exercised. On my finding that a ban, so far as the present case is concerned, does not exist, there was no error committed by the learned subordinate judge in calling for the documents. There is, therefore, no force in the contention of Mr. Palit that the learned subordinate judge committed a gross illegality in calling for the documents and agreeing to accept them in evidence on a subsequent date.

13. I would, however, make it clear that my decision is confined to the documents relating to the period after April 1, 1964, and the parties would be entitled to have those documents only in this case. The civil revision fails and is dismissed. There would be no order as to costs.