T.V.R. TATACHARI, J.

( 1 ) THIS reference to the Full Bench has been made by Avadh Behari Rohatagi,.

under Rule 2 (as amended) of the Original Side Rules. 1967, in Suit No. 64 of 1969

instituted on the Original Side of this Court. The questions referred to by the learned

Judge for the opinion of the Full Bench relate to the scope and effect of the

provisions in sections 54 and 59b of the Indian Income-tax Act, 1922, and sections

137 and 138 of the Income-tax Act, 1961.

( 2 ) THE facts which have occasioned the reference are briefly the following. The

plaintiff, Trilok Chand Jain, instituted the suit referred to above for recovery of Rs.

1,39,722. 86 from the defendants M/s. Dagi Ram Pindi Lall, its three partners Pindi I

all, Bishamber Nath and Dagi Ram and Smt. Budh Wanti, wife of Pindi Lall. While

evidence was being recorded in the Suit, the plaintiff obtained summons from the

Court requiring the Income-tax Department to produce in Court the records relating

to the income-tax of M[s. Dagi Rani Pindi Lall for the years 1964-65 to 1971-72. The

Income-tax Officer, District II (XI), New Delhi, sent a letter, dated November 1,

1972, to the Court claiming that the said records relating to Mis. Dagi Ram Pindi Lall

were privileged under section 137 of the Income-tax Act, 1961, in view of the

decision of H. R. Khanna,. (as his lordship then was) in Daulat Ram and others v.

Som Nath and others, (l968) 68,. T. A. 779 (1 ). The Income-tax Officer, however,

sent the records in a sealed cover through an Inspector in compliance with the

summons of the Court. The plaintiff again applied for and obtained summons

requiring the Income-tax Officer to produce the income-tax records relatins: to m/s.

Horizon Industrial Products (P) Ltd. and Bishamber Nath Kaul. By a letter, dated

January 4, 1973, the Income-tax Officer, Companies Circle-VIII, New Delhi, claimed

privilege under section 138 of the Income-tax Act, 1961. It was submitted in the

letter that no disclosurs of information regarding income-tax pertaining to incometax

assessees could be made, and that if any information was required, the party

should apply to the Commissioner of Inane-tax under section 138 (1) of the Incometax

Act, 1961, read with Rule 113 of the Income-tax Rules, 1962, in Form No. 46.

The officer, however, sent the records in a sealed cover to the Court. The plaintiff

also filed in the Court a number of certified copies of the accounts of the defendants

which he had been able to obtain from the Income-tax authorities, and wanted to

tender the certified copies in evidence. The defendants in their turn wanted to

summon certain records relating to the plaintiff from the Income-tax Department,

but the plaintiff opposed the same relying, inter alia, on the decision in Daulat Rams

case (supra ).

( 3 ) AT that stage, arguments were addressed before the learned Judge on the

question of privilege. The counsel for the plaintiff relied, inter alia, upon the decision

in Daulat Rams case (supra), while the counsel for the defendants argued that the

said decision needed re-consideration in view of a decision of a Division Bench of

the High Court of Madras inve V. Sivagami Achi v. Vr. Ve. Vr. Ramanathan Chettiar

and others, (1967) 64. T. R. 36 (2 ). A number of decisions of other High Courts

including a decision of a Full Bench of the Punjab High Court in Amar Singh Lamba

v. Sewa Singh and another,. L. R. 1972 (2) Punjab 202 (F. B) (3), were cited before

the learned Judge. On a consideration of the various decisions, the learned Judge

was inclined to take a view different from the view taken in Daulat Rams case

(supra) and in some of the Other decisions cited before him. The learned Judge

observed that the derived some support for his view from the decision of the

Supreme Court in Lalji Raja and Sons v. Firm Hans Raj Nathuram, AIR 1971

Supreme Court 974 (4 ). However, since the question of privilege claimed by the

Income-tax officers was likely to arise frequently on the Original Side in the course of

trial of suits, the learned Judge considered that the said question should be settled

by a Full Bench of this Court, and accordingly made the present reference

suggesting that the question of privilege may be examined under the following three

heads:1. What is the position of law relating to privilege prior to 1964 2. What is

the position of law relating to privilege after 1964 and3. What is the effect of the

production of certified coptes relating to income-tax assessment records, and how

far certified copies can be admitted in evidence" It is thus that the matter has

come up before us for our opinion.

( 4 ) FOR a proper appreciation of the various points that are involved in the

questions referred to. us, it is necessary to refer to the relevant provisions in the

Indian Income-tax Act, 1922, and the Income-tax Act, 1961. Sub-sections (1) and

(2) of section 54 of the Indian Income-tax Act, 1922, provided as under :"54.

Disclosure of information by a public servant (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 this

Chapter, or in any record of any assessment proceeding, or any proceeding relating

to the 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) If a public servant disposes 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. (3 ). . . . . . . . . . . . . (4 ). . . . . . . . . . . . . . (5 ). . . . . . . . . . .

. . . . It has to be noted that sub-section (1) declared (i) that the various documents

referred to therein shall be treated as confidential, and (ii) prohibited a Court from

requiring any public servant to produce before it any such documents or to give

evidence before it in respect thereof, and that sub-section (2) made punishable the

disclosure by a public servant of any particulars contained in such documents. Subsection (3) of section 54 recognised certain exceptions to the aforesaid provisions in sub-sections (1) and (2), and they are not material for the purposes of the points

involved in the reference before us.

( 5 ) BY section 9 of the Taxation Laws (Amendment) Act No. XXVIII of 1960,

section 59b was inserted in the Indian Income-tax Act, 1922, with effect from April

1, 1960. It provided as under :"59-B. Disclosure of information regarding tax

payable Where a person makes an application to the Commissioner in the prescribed

form and after payment of the prescribed fee for information as to the amount of

tax determined as payable by any assessee in respect of any assessment made on

or after the 1st day of April, 1960, the Commissioner may, notwithstanding anything

contained in section 54 if he is satisfied that there are no circumstances justifying its

refusal, furnish or cause to be furnished the information asked for. " This new

section thus permitted a person to make an application to the Commissioner for

information only as to the amount of tax determined as payable by any assesses in

respect of any assessment made on or after April 1, 1960. and empowered the

Commissioner to furnish or cause to be furnished the information asked for if he was

satisfied that there were no circumstances justifying its refusal.

( 6 ) THE above legal position continued till April 1, 1962, when the Indian Incometax

Act, 1922, was repealed by the Income-tax Act, 1961, which came into force

from the said date. In this new Act, provisions were made in sections 137 and 138

corresponding to the provisions in sections 54 and 59b respectively of the Indian

Income-tax Act. 1922. The relevant portions of the said sections 137 and 138 read

as under :"137 : Disclosure, of information prohibited (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

Charter. 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. 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.

( 7 ) IT has to be noted that the provisions in sub-section (1) of section 137 of the

new Act were almost identical with the provisions in sub-section (1) of section 54 of

the Indian Income- tax Act, 1922. Sub-section (2) of section 137 merely prohibited a

public servant from disclosing any particulars contained in any of the documents

mentioned in sub-section (1), while sub-section (2) of section 54 of the. Indian

Income-tax Act, 1922, made the disclosure by a public servant punishable.

Subsections (3) to (5) of section 137 were almost similar to subsections (3) to (5) of

section 54. The provisions in section 138 were also similar to the provisions in

section 59b of the Indian Income-tax Act, 1922.

( 8 ) THE aforesaid provisions continued to be in force till April 1, 1964, on which

date, by section 32 of the Finance Act No. 5 of 1964, section 137 was omitted, and

by section 33 thereof, section 138 was substituted by a new section 138. The said

substituted section 138 read as under :"138. Disclosure of information respecting

assessees (1) 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 either under this Act or the Indian Income-tax Act, 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 lew for the time being in force, the Central

Government may, having regard to the practices and usages customary or any other

relevant factors, by older 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 in the order. "

( 9 ) IT has to be noted that by the changes so made, the declaration of the

confidential nature of the documents, the prohibition against a Court requiring any

public servant to produce such documents or to give evidence before it in respect

thereof, and the prohibition against a public servant making a disclosure of any

particulars in the said documents, which were provided in section 137 have all been

omitted. The scope of the provision in section 138 which came into force with effect

from April 1, 1962, was enlarged by sub-section (1) of the substituted section 138.

While under the previous section 138 a person could make an application for

information as to the amount of tax determined as payable by an assessee, under

subsection 1 of the substituted section 133 a person could make an application for

"any information" relating to any assessee. Also, while under the previous section

138, the Commissioner was to be satisfied that there were no circumstances

justifying a refusal to furnish the information asked for, under sub-section (1) of the

substituted section 138 he was to be satisfied that it was in the public interest to

furnish the information asked for and his decision in that behalf was made final and

could not be called in question in any court of law. Further, sub-section (2) of the

substituted section 13s empowered the Central Government to direct, by order

notified in the Official Gazette, 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.

( 10 ) AGAIN, sub-section (1) ot section 138 was substituted by a new sub-section

(1) by section 28 of the Finance Act No. 20 of 1967 with effect from April 1, 1967,

which reads as under :" (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.

( 11 ) 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 (d) of the Foreign Exchange Regulation Act, 1947; or

( 12 ) 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 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. WHERE a person makes an

application to the Commissioner in the prescribed form for any information relating

to any assesses in respect of any assessment made under this Act or the Indian

Indian-tax Act, 1922, oil or after the 1st day of April, 1960, the Commissioner may,

if be 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. "

( 11 ) IT has to be noted that the provision in the previous subsection (1) of section

138 was incorporated in clause (b) of the new substituted sub-section (1 ). and a

further provision was made in clause (a) of the new sub-section (1) empowering the

Board or any other income-tax authority specified by it by a general or special order

in that behalf to furnish or cause to be furnished information relating to any

assessee to such officer, authority or body as was mentioned in the clause.

( 12 ) COMING now to the questions referred to the Full Bench, the first of them is

as regards the position of law relating to privilege prior to April 1, 1964. As pointed

out by Mr. B. N. Kirpal, learned counsel for the Income-tax Department, in dealing

with the said question, the following situations or aspects require to be considered,

viz.- (A) where the documents, records etc. in respect of which privilege is claimed

were filed by an assessee or a third party before April 1, 1962, with effect from

which date the Indian Income-tax Act, 1922, was repealed, in respect of assessment

years up to and including assessment year 1961-62 in proceedings for the said

assessment years taking place under the Indian Income-tax Act, 1922;here the

documents, records, etc. were filed by an assessee or a third party after April 1,

1962, but before April 1, 1964, in respect of assessment years up to and including

assessment year 1961-62 in proceedings for the said assessment years taking place

under the Indian Income-tax Act, 1922. (C) where the document, records, etc. were

filed by an assessee or a third party after April 1, 1962, but before April 1, 1964, in

respect of assessment years up to and including assessment year 1961-62 in

proceedings for the said assessment years taking place under the Income-tax Act,

1961; and where the documents, records, etc. were filed by an assessee or a third

party after April 1, 1962, but before April 1, 1964, in respect of assessment years

1962-63 and 1963-64 in proceedings for the said assessment years taking place

wider the Income- tax Act, 1961.

( 13 ) THE first question referred to the Full Bench has thus to be treated as

consisting of questions 1 (a) to 1 (d) and answered seriatim.

( 14 ) SO far as question 1 (a) is concerned, the legal position up to April. 1, 1962.

was that section 54 of the Indian Income- tax Act applied to such documents,

records, etc. and they, with the exception of those which fell within the exceptions

mentioned in sub-section (3) of section 54. were confidential and a Court was

prohibited absolutely from requiring any public servant to produce before it any such

documents, etc. or to give evidence before it in respect thereof. The absolute nature

of the said prohibition was emphasised by the Supreme Court in Charu Chandra

Kundu v. Gurupada Ghosh, (1961) 43. T. R. 83 (5), where-in Shah. , who spoke for

the Court, observed at page 86 that "the prohibition imposed against the Court by

section 54 is absolute", and that "its operation is not obliterated by any waiver by

the assessee in whose assessment the evidence is tendered, document produced or

record prepared. " Similarly, in Commissioner of Income-tax, Bombay v. Laxmichand

Nara" yandas and another, (1962)44. T. R. 548 (6), the Supreme Court reiterated at

page 550 that section 54 of the Indian Income-tax Act, 1922, contained in effect an

unconditional prohibition against a public servant producing the documents, etc.

mentioned therein, and that the section was not confined to documents produced by

the assessee but applied also to documents produced before an income-tax

authority by third parties. Also, disclosure by a public servant of any particulars

contained in such documents, etc. was punishable. After April 1, 1960, section 59-B

also applied, and the Commissioner could furnish or cause to be furnished

information, on an application by a person, only as to the amount of tax determined

as payable by any assessee in respect of any assessment made on or after Apra 1,

1960, if he was satisfied that there were no circumstances justifying its refusal.

( 15 ) THE question then is whether the confidential nature of the aforesaid

documents, records, etc. and the prohibition against their being required by a Court

to be produced or evidence thereof to be given as well as the liability of a public

servant to be punished for disclosure of the particulars contained in the documents,

records, etc. continued to subsist even after April 1, 1962, with effect from which

date the Indian Income-tax Act, 1922, had been repealed and the Income-tax Act,

1961, came into force. As regards the effect of repeal of an enactment, section 6 (c)

of the General Clauses Act, 1897, provides as under :"6. Where this Act, Or any

Central Act or regulation made after the commencement of this Act, repeals any

enactment hitherto made or hereafter to be made, then, unless a different intention

appears, the repeal shall not (C) affect any right, privilege, obligation or liability

acquired, accrued or incurred under any enactment so repealed. " As pointed out by

a single Judge of the High Court of Madras, Venkataraman J in S. V. Ramakrishna

Mudaliar v. Mrs. Rajab Fathima Bukari and another, (1965) 58. T. R. 288 (7), 295,.

the principle of the above provision would apply even to a case of repeal of one of

the sections of an. enactment. The Drovision lays down two propositions. The first is

that the repeal of an enactment shall not affect any right, privilege, obligation or

liability acquired, accrued or incurred under the enactment repealed. The second is

that the said consequence will follow lineless a different intention appears in the

repealing enactment.

( 16 ) IT has, therefore, to be seen in the first instance whether it can be said that

by virtue of the declaration of the documents, etc. as confidential, the prohibition

imposed against the Court and the liability of a public servant to be punished for

disclosure under section 54, a right, privilege, obligation or liability had been

acquired, accrued or incurred within the meaning of section 6 (c) of the General

Clauses Act. In S. V. Ramakrishna Mudaliars case (supra), Venkataramon. held at

page 295 that the public servant (the Income-tax Officer in that case) was under an

obligation not to give evidence in Court, and that the said obligation accrued or was

incurred under section 54 of the Indian Income-tax Act, 1922. The learned Judge

also held that the said obligation was correlated to the corresponding right of the

assessee concerned to forbid the public servant (the Income-tax Officer in that case)

from producing the document or giving evidence thereof, that the obligation of the

Income-tax Officer was there even apart from the corresponding right of the

assessee to forbid him from giving evidence, and that the prohibition was enacted in

public interest to enable full and true disclosure to be made by the assesses and

that was why it ,was not waivable by the assessee. At page 296, the learned Judge

observed that the Commissioner of Income-tax had both a light to refuse to produce

the documents before the Court, as also an obligation not to produce them before

the Court.

( 17 ) IN Daulat Ram v. Som Nath, (1968) 68. T. R. 779, H. R. Khanna. (as his

Lordship then was) treated the matter as one of privilege. The. learned Judge

observed at page 784 as under : "as a privilege existed in respect of the production

of the documents in question at the time they were filed before the Income-tax

authorities in the present case, the aforesaid privilege could not be affected because

of the repeal of section 54 of the Act of 1922, in view of the plain language of clause

(c) of section 6 of the General Clauses Act. " The learned Judge also referred to and

agreed with the view taken in S. V. Ramakrishna Mudaliars case (supra ).

( 18 ) IN Tulsiram Sanganaria and another v. Smt. Annibai, A.. R. 1971 Supreme

Court 671 (8 ). Grover. observed at page 672 that section 54 made it "obligatory" on

the officials and other servants of the Income-tax Department to treat as

confidential the records and documents mentioned in sub-sections (1) and (2)

thereof.

( 19 ) BUT, a different view was taken by a Division Bench of the High. Court of

Madras (Veeraswami and Krishnaswamy Reddy.), in the case of Ve. v. Sivagami Achi

(supra ). The learned Judges took the view that section 54 of the Incoms-tax Act,

1922, did not create any right, privilege, obligation or liability which could be

properly regarded as having been acquired, accmed or incurred. The learned Judges

observed that the declaration in section 54 was not from the point of view of any

particular individual, and such a declaration did not confer a right or impose an

obligation on any specified person. They added that no particular person could by

virtue of the declaration be said to have incurred an obligation or acquired a right or

privilege. As regards the prohibition, the learned Judges expressed the view that the

second part of sub-section (1) of section 54 merely contained a bar on Courts from

summoning for the specified particulars, and sub-section (2) merely enjoined a

prohibition against any public servant disclosing such particulars, and the same did

not amount to an obligation incurred. They also observed that every obligation,

however, abstract, does not necessarily invoke a corresponding right also in the

abstract. It was pointed out that if the Court or the public servant contravened the

power, no particular person including the assessee had a cause of action against it,

and all that any one like the assessee could do in such a case was to bring it to the

notice of the Court or the authority concerned that the provision had been

contravened. The learned Judges were of the view that section 6 (c) of the General

Clauses Act does not comprehend a right in gross or in the abstract, but confers

only a specific right or obligation with reference to ascertainable persons as

distinguished from the general public. In support of the said view, reliance was

placed upon the following observations in Hamilton Gell v. White (1922) 2 K. B. 422

(9), 431, 432 and Abbott v. Minister for Lands (1895)A. C. 425- (10 ). In the former

case Atkin L.. , referring to section 38 of the Interpretation Act, 1889, which

corresponds to section 6 (c) of the Indian General Clauses Act, expressed the view :

"it is obvious that that provision was not intended to preserve the abstract rights

conferred by the repealed Act, such for instance as the right of compensation for

disturbance conferred upon tenants generally under the Act of 1908, for. if it were,

the repealing Act would be altogether inoperative. It only applies to the specific

rights given to an individual upon the happening of one or other of than events

specified in the statute. " In the latter case, it was observed as under : "the mere

right (assuming it to be properly so-called) existing in the members of the

community or any class of them to take advantage of an enactment, Without any

act done by an individual towards availing himself of that right, cannot properly be

deemed to be a right accrued within the meaning of the enactment. "

( 20 ) WITH utmost respect to the learned Judges of the Division Bench in the case

of Ve. V. Sivagami Achi (supra), we are unable to agree with their view. No doubt,

the declaration in section 54 that the documents mentioned therein shall be treated

as confidential was not from the point of view of any particular individual. But, in the

context and on a plan reading of the section, it seems to us to be clear that the

documents were required to be treated as confidential by every one concerned

including the authorities before whom they were filed. The persons concerned and,

particularly, the said authorities were thus placed under an obligation to treat the

documents as confidential. Also, as pointed out by Venkataraman. in S. V.

Ramakrishna Mudaliars case (supra), the declaration of the confidential nature and

the prohibition against disclosure were enacted in public interest to enable a full and

true disclosure to be made by the assessee or a third party required to file

documents or furnish information to the income-tax authority. The assessee or the

third party could, therefore, insist that the documents filed or the information

furnished by him should be regarded as confidential and the documents or

information should not be disclosed. In that view. a right to resist the production

and disclosure of the documents can be said to have been acquired or accrued

which could be exercised by the assessee or the third party, and an obligation not to

produce or disclose can be said to have been incurred by the concerned officer or

authority. Similarly, the provision in the second part of sub-section (1) of section 54

which contained a bar on Courts from summoning for the production of the

documents or for requiring evidence thereof to be given, did create a right in the

assessee or the third partly to enforce the said bar. Again, the prohibition contained

in sub-section (2) of section 54 against any public servant disclosing the particulars

of the documents, etc. can be said to have created an obligation on the part of the

said public servant. It may be that the declaration and the prohibition were general

abstract in the first instance. But, as soon as the documents, records, etc. were filed

by the assessee or the third party before the concerned officer, the provisions in

section 54 were attracted and the declaration and the prohibition ceased to be

general or abstract and became concrete and specific, with the result that a specific

right accrued to or was acquired by the assessee or the third party and a specific

obligation was incurred by the officer concerned in respect of the said specific

documents, records, etc.

( 21 ) THE above view gains support even from the English decisions relied upon by

the learned Judges of the Division Bench.

( 22 ) IS Abbotts case (supra.), Abbott purchased certain Crown land in March

1871, under the provisions of the Crown Lands Alienation Act, 1861, and it was

granted to him in fee simple. Later, in November, 1873, he took up a conditional

purchase of a certain. extent of adjoining land. Then in March, 1892, he applied for

an additional conditional purchase of certain other land adjoining the land already

purchased by him. Section 22 of the aforesaid Act of 1861 provided that holders in

fee simple of lands granted by the Crown in areas not exceeding 280 acres might

make additional purchases of adjoining lands. The said Act was repealed subject to

a saving provision by the Crown Lands Act, 1884, which, like the Act of 1861,

provided for additional conditional purchases, hut section 22 of the Act of 1861 had

no counter part in the latter Act, there being no provision relating to the conditional

purchase of adjoining lands by a holder in fee simple of lands granted by the Crown.

Section 2 of the Act of 1884 under which the former Act was repealed contained a

proviso which read as under : " "provided always that notwithstanding such repeal

(B) all rights accrued and obligations incurred or imposed under or by virtue of any

of the said repealed enactments shall subject to any express provisions of this Act in

relation thereto remain unaffected by such repeal. "

( 23 ) IT was contended on behalf of Abbott that although section 22 of the Act of

1861 was repealed and there was no corresponding provision in the Act of 1884, yet

the saving proviso to section 2 of the Act of 1884 enabled him still to make an

additional conditional purchase as if section 22 remained in force. The argument

was that under the repealed enactment he had a right to make the additional

conditional purchase, that it was a "right accrued" at the time Act 1884 was passed,

and that notwithstanding the repeal it remained unaffected by such repeal.

Rejecting the said contention, the Privy Council observed at page 431 that the

power to take advantage of an enactment may without impropriety be termed a

"right", but "the mere right (assuming it to be properly so- called) existing in the

members of the community or any class of them to take advantage of an

enactment, without any act done by an individual towards availing himself of that

right, cannot properly be deemed a "right accrued" within the meaning of the

enactment". Thus, the right claimed under section 22 of the Act of 1861 was, if at

all, a general or an abstract right existing in the members of the community to take

advantage of the enactment, and unless an individual did any act towards availing

himself of that right, it could not properly be deemed a "right accrued". As Abbott

did not file any application before the repeal of the Act of 1861, it was held that no

right had accrued to him within the meaning of the proviso to section 2 of the Act of

1884.

( 24 ) IN the case of Hamilton Cell (supra), a similar question arose for consideration

Section 11 of the Agricultural Holdings. Act, 1908, provided that "where the landlord

of a holding,. . . terminates the tenancy by notice to quite. . . . the tenant upon

evicting the hold in shall, in addition to the compensation, (if any) to which he may

be entitled in respect of improvements. . . be entitled to compensation for the loss

or expense directly attributable to his quitting the holding. " There was a proviso to

that section to the effect, inter alia. that no compensation under the section shall be

payable (i) unless the tenant had within two months after he had received notice to

quit given to the landlord notice in writing of his intention, to claim compensation

under the section; and (ii) if the claim for compensation was not made within three

months after the time at which the tenant quits the holding. The landlord, Hamilton

Cell, gave his tenant John White notice to. quit. The tenant duly gave notice of his

intention to claim compensation within the time limited. But. before the tenancy had

expired, and therefore before he could satisfy the second condition, section 11 of

the Act of 1908 was repeated. He subsequently made his claim within three months

limited by the section. It was held by the Court of Appeal that notwithstanding the

repeal he was entitled to claim compensation under section 11 by virtue of section

38 of the Interpretation Act. 1889, which corresponds to section 6 (c) of the Indian

General Clauses Act. It was pointed out that when the landlord gave the tenant

notice to quite, the tenant "acquired a right" to compensation for disturbance under

section. The decision in Abbotts case was distinguished at page 428 as follows: "this

is not like the case which was cited to us (i) (Abbotts case) in argument where the

tenants right depended upon some act of his own. Here. it depends upon the act of

the landlord -namely, the giving of a notice to quit in view of a sale in which event

the section itself confers a right to compensation subject to the tenant complying

with the conditions therein specified, and so far as it was possible to comply with

them down to the time when the section was repealed he did in fact comply with

them. "

( 25 ) THUS, as stated earlier, even if the declaration and the prohibition in section.

54 are regarded as being general or abstract, as soon as the documents were filed

by an assessee or a third party before the concerned officer the provisions in section

54 applied to them and the declaration and the prohibition ceased to be general or

abstract and became concrete and specific, with the result that a right accrued to or

was acquired by the assessee or the third party, and an obligation was incurred by

the officer concerned in respect of the documents, records, etc.

( 26 ) A similar view was taken by a single Judge (R. L. Gulati,.) of the High Court of

Allahabad in Raghubir Saran v. 0. P. Jain, Additional Munsif (1) Bulandshahr and

others. (1969) 73. T. R. 482 (11 ). The learned Judge observed at page 488 as

follows : "the object behind the enactment of section 54 clearly was to induce the

assessee to make a true and full disclosure before the income-tax authorities of

facts relating to their income by affording them a protection against the disclosure

of such facts to anybody else including a court. Under the cover of protection

granted by section 54 people felt free to state facts involving confidential matters

relating to their business and property without fear of such information being used

against them in any other proceedings or inquiry. This undoubtedly created a right

or a privilege in favour of assessees and other people concerned and in order to

make that right or privilege effective, the legislature, in its wisdom, imposed an

absolute ban on the income- tax authorities not to disclose any document filed or

statement made before them during the course. of such assessment and went

further to impose a restriction on the powers of the courts to compel the disclosure

of any information contained in the income-tax records. . . . . . In this background, it

is not possible to say that section 54 merely imposes an obligation upon the incometax

authorities without creating any corresponding right in favour of any particular

person. " The learned Judge declined to agree with the view of the Division Bench of

the High Court of Madras in Ve. V. Sivagami Achis case (supra ). The learned Judge

concluded that section 54 was intended to create a right and a privilege in favour of

the assessee and other persons concerned, and that it wag for the preservation of

that right or privilege that an absolute obligation was imposed upon the income-tax

authorities never to divulge to anybody including, a court any information from the

assessment records. The learned Judge also observed that the obligation extended

to each document referred to in section 54 (1 ).

( 27 ) MR. Watel, learned counsel for the defendants, referred. to the decision of the

Supreme Court in Lalji Raja and Sons v. Firm Hansraj Nathuram,. A.. R. 1971

Supreme Court 974 (12 ). It is necessary to state the facts in the said case. Lalji

Raja and Sons obtained a decree against Firm Hansraj Nathuram in the Court of

Sub-Judge, Bankura, West Bengal, on December 3, 1949. On an application by the

decree-holder, the Court which passed the decree transferred the decree to the

Court of the Additional District Judge at Morena in the then State of Madhya Bharat

for execution. The judgment-debtor resisted the execution on the ground that the

transferee court had no jurisdiction to execute the decree as it was that of a foreign

Court and had" been passed ex parte. The transferee court accepted that contention

and dismissed the execution petition on December 29, 1950. On April 1, 1951, the

Code of Civil Procedure (Amendment) Act. (Act II of 1951) came into force, and as a

result of that amendment the Indian Code of Civil Procedure was extended to the

former State of Madhya Bharat as well as to various other places. Meanwhile, the

decree-holders appealed against the order of the transferee court to the High Court

of Madhya Pradesh which allowed the appeal. On further appeal by the judgment debtor to the Supreme Court, the order of the transferee Court was restored. The

Supreme Court held that the transfer ordered by the Bankura Court was without

jurisdiction as on that date the Indian Code of Civil Procedure did not apply to the

Morena Court, but it was governed by the said Indian Code of Civil Procedure as

adapted by the Madhya Bharat Adaptation Order, 1947,. e. , it was governed by a

law passed by the then Madhya Bharat State. The decree-holders again filed an

execution application in the Bankura Court on February 15, 1963, praying for the

transfer of the decree-again to the Morena Court for execution as by that time. the

Indian Code of Civil Procedure had been extended to the Madhya Bharat State. "the

transfer was ordered and execution proceedings commenced in the Morena Court.

The judgment-debtors again resisted the application on various grounds. The

transferee Court rejected the. objections, and an appeal against that. order to the

High Court of Madhya Pradesh was allowed oil the ground that the decree was not

executable as the Court which passed the decree was a foreign Court. The decreeholders preferred an appeal to the Supreme Court, and it was contended before the Supreme Court that in view of section 20 clause (1) of the Civil Procedure

(Amendment) Act, 1951. by which the Code was extended to Madhya Bharat and

other areas, the judgment-debtors right to resist the execution of the decree was

protected. Section 20 (1) of the Act deals with repeals and savings. The relevant

portion thereof reads as under "if, immediately before the date on which the said

Code comes into force in any Part B State there is in force in that State any law

corresponding to the said Code, that law shall on that date stand repealed. Provided

that the repeal shall not affect (B) any right, privilege, obligation or liability acquired,

accrued or incurred under any law so repealed. . . . . as if this Act had not been

passed. " The said provision thus protected the rights acquired and privileges

accrued under the law repealed by the amending Act.

( 28 ) THE argument before the Supreme Court was that the non-executability of

the decree in the Morena Court under the law in force in Madhya Bharat before the

extension of the Code could not be said to be a right accrued under the repealed

law. Hegde. speaking for the Court, held that even by straining the language of the

provision it could not be said that the non- executability of a decree within a

particular territory could be considered as a privilege, that in order to get the benefit

of the provision in section 20 (l) (b.) of the Amendment Act. the. non-executability

of the decree must, firstly, be a right and, secondly, it must be a right that had

accrued from the previsions of the repealed law, and that it was difficult to consider

the non-executability of the decree in Madhya Bharat as a vested right of the

judgment-debtors. The learned Judge pointed out that the non-executability in

question pertained to the jurisdiction of certain courts and not to the right of the

judgment debtors, that the relevant provisions of the Civil Procedure Code in force in

Madhya Bharat did not confer the. right claimed by the judgment-debtors, that all

that had happened in view of the extension of the Indian Code to the whole of India

in 1951 was that the decrees which could have been executed only by courts in

British India have been made executable in the whole of India, and that the change

made was one relating to procedure and jurisdiction. It was further pointed out by

the learned Judge that before the Indian Civil Procedure Code was extended to

Madhya Bharat, the decree, in question could have been executed either against the

person of the judgment-debtors if they had happened to come to British India or

against any of heir properties situate in British India, that the execution of the

decree within the State of Madhya Bharat was not permissible because the arm of

the Indian Code of Civil Procedure did not reach Madhya Bharat, and that it was the

invalidity of the order transferring the decree to the Morena court that stood in the

way of the decree-holders in executing their decree in that court on the earlier

occasion and not because of any vested right of the judgment-debtors, and that by

the extension of the Indian Code to Madhya Bharat, want of jurisdiction on the part

of the Morena court was remedied and that Court has now been made competent to

execute the decree. The learned Judge referred to the decisions in Hamilton Gells

case (supra ). Abbotts case (supra), and G. Ogden Industries Pvt. Ltd. v. Lucas.

(1969) I All FR 121 (13), and observed that a provision to preserve the right accrued

under a repealed Act was not intended to preserve the abstract rights conferred by

the repeated Act, that it only applied to specific rights given to an individual upon

the happening of one or the other of the events specified in the statute, and that

the mere right existing at the date of the repealing statute to take advantage of the

provisions of the statute revealed was not a "right accrued" within the meaning of

the usual saving clause. The learned Judge concluded that the view taken by the

High Corut that the decree in question was a nullity qua the Morena Court could not

be accepted as correct.

( 29 ) RELYING upon the above decision, Mr. Watel contended that in the present

case also the prohibition against a Court contained in section 54 related to the

procedure and jurisdiction of the Court, and that under the provision in section 54 it

cannot be said that a right, privilege or obligation had been acquired, accrued or

incurred within the meaning of section 6 (c) of the General Clauses Act. We are

unable to accept the contention. In the case before the Supreme Court, the Morena

Court had no jurisdiction to start with, and the want of jurisdiction was remedied by

the extension of the Indian Code of Civil Procedure to Madhya Bharat and the Court

was made competent to execute the decree. In the case of section 54, it laid down a

prohibition against the Court doing a certain act and the same cannot be regarded,

in our opinion, as one relating to procedure or absence of jurisdiction. The

prohibition in section 54 was a substantive provision and not merely procedural, and

the section only required the Court not to exercise the jurisdiction normally vested in

it. It was just a restraint on existing jurisdiction of the Court. The learned counsel

cannot, therefore, derive any assistance from the decision. We have already referred

to the decisions in Hamilton Cells case and Abbotts case and pointed out that the

said decisions in fact support the view taken by us. The case of G. Ogden Industries

Pty. Ltd. , referred to in the decision of the Supreme Court, is also in no way against

the view taken by us. Section 5 of the English Workers Compensation Act, 1958,

provided for compensation fit certain rates for personal injury suffered by an

employee in the course. of his employment. By an Amendment Act of 1965, the

benefits payable to. the dependents of a deceased worker were. increased. After

the said amendment Act came into force, a worker suffered pulmonary oedema from

which he died. His dependents claimed compensation under the Act of 1958. The

question arose, whether compensation should be paid under the increased rates

introduced by the Amendment Act. or whether. the rights of the dependents and the

liabilities of the employer under the 1958 Act were preserved by section 7 (2) (c) of

the Acts Interpretation Act, 1958, and thus not affected by the Amendment Act of

1965. The Privy Council held that the liability in section 7 (2) (c) of the Acts

Interpretation Act was used to connote something quite different from the liability

referred to in section 5 of the Act of 1958, and that section 5 being merely

introductory, even when read in conjunction with section 9, did not confer on the

dependents any rights until the death of the worker, and accordingly there was no

liability preserved by section 7 after the Amendment of the Act of 1958. The

principle underlying that decision is the same as in the other two English decisions

and is consistent with the view taken by us.

( 30 ) MR. Watel referred to a passage at Page 217 in Salmond on Jurisprudence

(12th Edition) which reads as under :- "rights are concerned with interests, and

indeed have been defined as interests protected by rules of right. . e. by moral or

legal rules. Yet rights and interests are not. identical. Interests are things which are

to a mans advantage; he has an interest in his freedom or his reputation. His rights

to these, if he has such rights, protect the interest, which accordingly form the

subject of his rights but are different from them. To say he has an interest in his

reptitation means that it is to his advantage to enjoy a good name; but to say he

has a right to this is to imply that others ought not to take this From him. "

( 31 ) THE learned counsel also referred to the characteristics of a legal right set out

at page 221 in the aforesaid book. He argued that, as pointed out by Salmond.

rights and interests arc not identical, and that even if an assessee or " third party

may be regarded, as having an interest in the confidential nature of the documents,

records, etc. filed by him as declared in section 54. and in the protection against the

disclosure of the particulars in the said documents, etc. contained in the section, he

cannot be regarded as having acquired a right in respect of the same. We do not

think so. It is true that rights and interests are not identical. But, the question is

whether the assessee or the third party acquired a right or merely an interest under

section 54. As pointed out earlier, the assessee or the third party acquired a right or

a right accrued to the assessee or the third party under the section. In our opinion,

it is not a mere interest that he acquired or that has accrued. to him. Even as.

explained by Salmond, an interest is merely an advantage to be enjoyed by the

assessee, while a right is one which ought not to be taken. away from him by

others. Further, Section 54, as explained earlier imposed an obligation on the officer

concerned before whom the documents are filed by an assessee or a third party.

and the obligation thus imposed creates a corresponding right in the assessee to

resist the production and disclosure of the documents in contravention of the

obligation. In this connection. the learned counsel referred to pages 7 and 8 of the

New Jurisprudence by P. B. Mukherji where the learned author dealt with the

concept of rights. It is, however, not necessary to consider the same at length in the

view taken by us regarding the scope and effect of the provisions in section 54 of

the Indian Income- tax Act, 1922. The learned counsel also referred to the decision

in Arbon v. Anderson, 1943 1 All ER 154 (14), 156. where it was observed by

Goddard L.. that the question as to when the breach of a duty imposed by statute

confers a right of action on an individual depends upon the scope and language of

the Act which creates the obligation and on considerations of policy and

convenience. We are unable to see how this observation is of any assistance to the

learned counsel regarding the question under consideration.

( 32 ) FOR the reasons set out above, we are of the opinion that by virtue of the

declaration of the documents, etc. as confidential, the prohibition imposed against

the Court and the liability of a public servant to be punished for disclosure under

section 54 of the Indian Income-tax Act, 1922, a right to resist the production and

disclosure of the documents, etc. had been acquired or had accrued to an assessee

or a third party on his filing the documents before the income-tax authority, and an

obligation not to produce or disclose had been incurred by the concerned officer or

authority.

( 33 ) THE second proposition laid down in section 6 (c) of the General Clauses Act

has to be considered next. In the State of Punjab v. Mohar Singh, (1955) 1 S. C. R.

893 (15), the Supreme Court pointed out. the correct scope. and effect of the said

section 6. Mukhar. (as his" Lordship then was) observed at page. 899 as follows :

"whenever there is a repeal of an enactment, the consequences laid down in section

6 of the General Classes Act will follow unless as the section itself says, a different

intention appears. In the case of a simple repeal there is scarcely any own for

expression of a contrary opinion. But when the repeal is followed by fresh legislation

on the same subject, we would undoubtedly have to look to the provisions of the

new Act, but only for the purpose of determining whether they indicate a different

intention. The line of inquiry would be, not whether the new Act expressly keeps

alive old rights and liabilities but whether it manifests an intention to destroy them.

We cannot, therefore, subscribe to the broad proposition that section 6 of the

General Clauses Act is ruled out when there is repeal of an enactment followed by a

fresh legislation : Section 6 would be applicable in such cases also unless the new

legislation manifests an intention incompatible with or contrary to the provisions of

the section. Such incompatibility would have to be ascertained from a consideration

of all the relevant provisions of the new law and the mere absence of a saving

clause is by itself not material. " It has, therefore,, to be seen whether a different

intention appeared in the repealing enactment, Income-tax Act, 1961, This aspect

has been considered in some decisions.

( 34 ) IN D. P. Aggarwal v. The Suite and others, (1966) 59. T. R. 158 (16), a

Division Bench (S. B. Capoor and. S. Bed.) of the High Court of Punjab held at page

170 that "there is nothing in the Income-lax Act, 1961, which manifests an intention

that the protection from and prohibition of disclosure of assessment records as

afforded by section 54 would not be applicable to assessments which had been

completed before the 1st day of April, 1962, which was the date on which the

Income- tax Act, 1961, came into force". We are in respectful agreement with the

view taken by the learned Judges for the reason that there was in fact a clear

indication in the Income-tax Act, 1961, that the legislature was careful to keep the

protection from and prohibition of disclosure alive and subsisting with regard to

assessments completed before April 1, 1962, as is apparent from the re-enactment

of the provisions in sub-sections (1) and (2) of section 54 of the Indian Income-tax

Act, 1922, in almost identical terms in sub-sections (1) and (2) of section 137 of the

Income-tax Act, 1961. We may add that the same position obtains even if the

assessments had not been completed before April 1, 1962, but the proceedings

happened to continue thereafter, in-as-much as such assessment proceedings

pending on April 1. 1962, would continue to be governed by the Indian Income-tax

Act, 1922, by virtue of the provisions in section 297 (2) of the Income-tax Act. 1961,

as if the latter Act had not been passed.

( 35 ) IN Daulat Rams case (supra), an application was filed for summoning the

clerk of the Income-tax Office to produce the balance-sheets and profit- and loss

accounts for the years 1950 to 1954 filed by a firm of which the applicant was a

partner to prove that that firm was carrying on business in the premises in dispute

in certain proceedings instituted under the Delhi Rent Control Act, 1958. The

Income-tax Officer claimed privilege in respect of the production of the documents

under section. 54 of the Indian Income-tax Act, 1922. H. R. Khanna,. held as stated

earlier, that the privilege under section 54 of the Act of 1922 had accrued in respect

of the said documents filed at a time when section 54 was in. force, and that -the

same could not be affected by the repeal of the Act of 1922 in view of section 6 (c)

of the) General Clauses: Act, 1897. The learned Judge further held that although the

application for the protection of the documents was made in 1966 when the

Income-tax Act of 2922 had been repeated and there was no provision like section

54 of the Act of 1922, the subsequent legislation did not reveal an intention to

destroy the privilege which had accrued when section 54 was in force. This view of

the learned Judge supports the view expressed by us.

( 36 ) IN Raghubir Sarans (supra), an application was filed in a suit for the recovery

of arrears of rent to summon the income-tax assessment records of the defendant

to prove a statement alleged to have been made by him during the course of his

assessment proceedings which took place when section 54 of the Indian Income-tax

Act, 1922, was in force. R. L. Gulat. held that the obligation on the part of the

income-tax authorities to treat the same as confidential under section 54 had

accrued the moment the statement was recorded, and neither the repeal of the

Income-tax Act, 1922, nor the enactment of the Income- tax Act, 1961, had

obliterated the obligation imposed by section 54. The learned Judge expressed the

view that the repealing Act of 1961 did not disclose any intention of the. legislature

to destroy the effect of section 54. and that by enacting section 137 in the new Act

the legislatures clear intention was to preserve in tact the object of section 54 of

the old Act. This decision also supports the view taken by us.

( 37 ) IN Chandrasekhara Mandian v. Income-tax Officer (1973) 87. T. R. 564 (17 ).

K. Sadasivan. held that the effect of section 54 of the Indian Income-tax Act, 1922,

has been preserved, after its repeal, by section 6 (c) of the General Clauses Act,

1897. and that the repealing Act did not disclose any intention of the legislature to

destroy the effect of section 54 of the old Act. The learned Judge added that, on the

other hand the intention, as was evident from the enactment of section 137 in the

new Act, was to preserve in tact the object of section 54 of the old Act. In that view,

he held that certain returns relating to the years 19. 57 to March 31. , 1954, filed

before the Income-tax Officer by the plaintiff in a suit could not be summoned by

the Court in view of the protection under section 54 of the Income- tax Act of 1922

and section 137 of the Income-tax Act, 1961. This decision also supports the view

expressed by us.

( 38 ) IN P. Kandiah Thevar v. Third Income-tax Officer Tirunelvel. (1963) 49 T. T.

R. 665 (18), a Division Bench of the High Court of Madras (Srinivasan and

Venkatadr.) held that the Income-tax Act, 1961, was not merely a repealing

enactment, but it both repealed and re-enacted and also introduced in sub-section

(3) of section 137 certain new classes of cases where the confidential natural and

the prohibition against disclosure in section 54 was relaxed, that the provision in

clause (xxi) of section 137 (3) was one such case and in enacting the said clause

(xxi) the legislature did have a different intention to that extent, and that

notwithstanding that a certain statement was made in assessment proceedings

which had terminated before the coming into force of the Income-tax Act, 1961, the

relaxation contained in section 137 (3) (xxi) applied to the statement and its

disclosure was permitted there by. With respect, we are unable to agree. Certain

exceptions to the provisions in sub-sections (1) and (2) were laid down in sub-

section (3) of section 54 itself. The mere fact that some more exceptions were

added in sub-section (3) of section 137 does not necessarily mean an intention to

destroy the right acquired or accrued or the obligation incurred under sub-sections

(1) and (2) of section 54. particularly when the provisions in sub-sections (1) and

(2) of section 54 were substantially re-enacted in sub-sections (1) and (2) of section

137.

( 39 ) IN Chinnanmal v. Kumidhini, (1966) 61. T. R. 597 (19) a view similar to that

taken in P. Kandiah Thevars case (supra) was taken by a single Judge (K.

Veeraswam.) of the High Court of Madras. For the reason given above, we are

unable to agree with this decision, also.

( 40 ) IN Kalawati Devi Harlalka v. Commissioner of Income- tax, West Bengal,

(1967) 66. T. R. 680 (20), prior to its repeal made under the Indian Income-tax Act,

1922, prior to its repeal for assessment years 1952-53 to 1960-61, and after the

repeal of that Act by the Income-tax Act, 1961, the Commissioner issued a notice on

January 24, 1963, under section 33-B of the Act of 1922 for revision of those

assessments. The Supreme Court held that section. 297 (2) (a) of the Income-tax

Act, 1961, included within its scope a proceeding under section 33b of the Indian

Income-tax Act, 1922, and that the Commissioner, therefore, had jurisdiction to

issue the notice under section 33b of the Indian Income-tax Act, 1922, in view of

the section 297 (2) of the Income-tax Act, 1961. In that context, the Supreme Court

observed that section 297 was meant to provide as far as possible for all

contingencies which may arise out of the repeal of the 1922 Act, and section 6 of

the General Clauses Act, 1897, would not apply because section 279 (2) (a)

specifically evidenced in intention to the contrary. As observed by Ramaswam. In

Third Income-tax Officer. Mangalore v. M. Damodar Bhat, (1969) 71. T. R. 806 (S.

C.) (21) at page 813, the Supreme Court held in Kalawati Devi Harlalkas case

(supra) that "section 6 of the General Clauses Act will not. apply in respect of those

matters where Parliament had clearly expressed its intention to the contrary by

making detailed provisions for similar matters mentioned in that section. " Again in

T. S. Baliah v. T. S. Rangachar. (1969) 72 T. T. R/787 (S. C.) (22), the same learned

Judge observed at page 794 that his observation quoted above was the ratio of the

decision in Kalwati Devi Harlalkas case (supra ). It will thus be seen that the

decision was based on the fact that the issuance of notices under section 33-B fell

within the specific provision in section 297 (2) (a), and it was riot concerned with

the proposition under consideration by us, namely, whether the confidential nature

of the documents, etc. filed in proceedings for assessments completed prior to April

1, 1962, or continued after that date, and the prohibition in section 54 against the

disclosure of the particulars therein remained unaffected even after April 1, 1962, by

virtue of section 6 (c) of the General Clauses Act.

( 41 ) THUS, the two propositions in section 6 of the General Clauses Act had been

satisfied, and. therefore, by virtue of clause (c) of the said section 6, the right,

privilege, obligation or liability acquired, accrued or incurred under section 54 of the

Indian Income-tax Act, 1922. continued to subsist even after April 1, 1962, with

effect from which date the said Act had been repealed and the Income-tax Act,

1961 came into force.

( 42 ) IT has next to be considered whether the confidential nature of the aforesaid

documents, records, etc. and the prohibition against their being required by a Court

to be produced or evidence thereof to be given as well as the liability of a public

servant to be punished for disclosure of the particulars contained in the said

documents, records, etc. continued to subsist even after April 1, 1964, with effect

from which date. by Finance Act No. 5 of 1964, section 137 of the Income-tax Act,

1961, was omitted and section 138 therein was substituted by a new section 138

which consisted of sub-sections (1) and (2 ). This aspect also has been considered

in some of the decisions already adverted to. In S. V. Ramakrishna Mudaliars case

(supra), Venkataraman. held that in a case governed by section 137 (which

contained provisions similar to those! in sub-sections (1) and (2) of section 54 of the

1922 Act the prohibition therein would continue to. operate in spite, of the deletion

of the section in 1964 as a contrary intention was not apparent in the Finance Act

No. 5 of 1964 or in sub-sections (1) and (2) of section 138 as inserted by the said

Finance Act and the prohibition contained in section 137 hod not been destroyed.

( 43 ) IN Ve. V. Sivagami Achis case (supra), the Division Bench of the Madras High

Court (Veeraswami and Krishna- swamy Reddy.) agreed that Venkataraman. rightly

held-in S. V. Ramakrishna Mudaliars case (supra) that, section 138 (2) did not

contain any intention so as to eliminate the application of section 6 of the General

Clauses Act. The learned Judges, however, took the view that section 137, like its

predecessor section 54 of the Indian Income-tax Act, 1922, neither created an

obligation nor privilege or right which could be properly regarded as having been

incurred, acquired, or having accrued and, therefore, section 6 (c) of the General

Clauses Act was not attracted to the omission, of section 137. We have already

indicated our disagreement with the said view of the learned Judges. It is sufficient

to note in the present context that so far as the existence of any contrary intention

in section 138 is concerned, the view of the learned Judges was that there was no

such contrary intention.

( 44 ) IN Daulat Rams case (supra), H. R. Khanna. referred with approval to the

view taken by Veakataraman. in S. V. Ramakrishna Mudaliars case (supra)

regarding sub-sections (1) and (2) of section 138 of the Act of 1961. and held at

page 785 that even after the repeal of section 137, the legislation did not reveal an

intention to destroy the privilege which had accrued in respect of documents filed at

the time section 54 of the Act of 1922 was enforced.

( 45 ) SIMILARLY, in Raghubir Sarans case (supra), R. L. Gulat. observed at page

487 that "the mere omission of a section does not necessarily lead to the conclusion

that it was the intention of the legislature to do away with the rights and obligations

created under or by the omitted section", that "section 138 also, in my opinion, is

not incompatible or inconsistent with the effect of section 137 being continued

notwithstanding its omission", and at page 488 that "it is, therefore, clear that the

legislature did not indicate its intention to destroy the effect of section 54 of the old

Act by deleting section 137 from or by amending section 138 of the new Act. "

( 46 ) IN Chandrasekhara Mandians case (supra.), K. Sadasivan. took a similar view.

( 47 ) LA Nazir Mahammad v. Jamila Bibi, (1972) 85. L R. 342 (23), R. N. Misra. held

that after the omission of section 137 of the) Income-tax Act, 1961, with effect from

April 1, 1964, there was no bar on a Court calling for production of income-tax

assessment records of an assessee for any period subsequent to April 1, 1964. The

learned Judge did not go into the question as to whether records relating to a period

before April 1, 1964, could be called for. In Smt. Rama Gouri Devi v. Harish Chandra

(1973) 87. T. R. 15 (Patna) (24),j S. Sarwar Al. held in a similar manner that after

the repeal of section 137 of the Income-tax Act, 1961, there could not be any

impediment in the way of a Civil Court in directing production of documents which

were filed before an Income-tax Officer after the repeal. The case related to

documents filed after April 1, 1964, and not before the said date. We shall refer to

these two decisions later when we deal with the question No. 2 relating to

documents, records, etc. filed after April I, 1964.

( 48 ) WE have pointed out above the view taken in S. V. Ramakrishna Mudaliars

case (supra), Ve. V Siyagami Achis case (supra), Daulat Rams case (supra),

Raghubir Sarans case (supra) and Chandra-Sekhara Mandians case (supra ). In our

view also, it cannot be said that the legislature had indicated an intention to destroy

the effect of section 54 of the Indian Income-tax Act. 1922, by deleting section 137

from of by amending section 138 of the Income-tax Act, 1961. We do not find any

such intention either in the Finance Act No. 5 of 1964 or in sub-sections (1) and (2)

of section 138 as inserted by the said Finance Act. No doubt, sub-sections (1) and

(2) of section 138 did not contain a declaration or prohibition as was laid down in

sub-sections (1) and (2) of sections 54 and 137. But, that by itself, in our opinion,

does not show an intention. to destroy any right that was acquired OT accrued or

the obligation that was incurred either under sub-sections (. 1) and (2) of section

54 or under sub-sections (1) and (2) of section 137. Also, as pointed out by

Venkataraman. in S. V. Ramakrishna Mudaliars case (supra) with which H. R.

Khanna. agreed at pages 785 and 786 in Daulat Rams case (supra), the mere fact

that the discretion was exclusively given to the Commissioner of Income-tax under

sub-section. (1) of section 138 does not necessarily mean; an intention. lo destroy

the rights and obligations already acquired, accrued or incurred. The provision in

section 138 (2) also shows only that when the Central Government issues a

notification, there would be a prohibition in respect of the documents specified

therein. Therefore, in the absence of a contrary intention in section 138, it has to be

held that the aforesaid rights and obligations in respect of documents, records. etc.

filed prior to April 1, 1962, continued to subsist even after April 1, 1964 by virtue of

the provision in section 6 (c) of the General Clauses Act.

( 49 ) MR. Watel contended that the provisions in section 54 and 137, particularly in

so far as they related to the power of the Court to summon the records of

income-tax authorities pertaining to assessees parties before the Court were

procedural provisions like sections 133 to 125 of the Evidence Act, and that changes

in such procedural law have always a retrospective operation on proceedings

pending on the dates of the said changes unless provided for otherwise. In support

thereof, the learned counsel relied upon Paras Ram v. Mt. Meera Kunwar, A.. R.

1930 Allahabad 561 (25), 567, and Tika Sao v. Hari Lal, A.. R. 1940 Patna 385 (26),

392 (F. B. ). He argued that the declaration and prohibition laid down in sections 54

and 137 having been repealed, and the aforesaid procedural bar to the production

of documents or summoning of witnesses to give evidence thereof having been

removed, the said alteration should be deemed to be retrospective. The contention

and the argument were based on the assumption that the provisions in- subsections

(1) and (2) of section 54 and 137 were procedural. We have already

indicated that the said provisions are substantive and not procedural, and in that

view the contention and the argument cannot be said to have any force.

( 50 ) MR. Watel next contended that since by virtue of subsection (5) of section

137 of the Act of 1961 the prohibition was lifted in so far as the assessee himself

was concerned, the prohibition or privilege was no longer absolute and the courts

were no longer completely fettered by the provisions of sections 54 and 137 even in

respect of the records filed while the said provisions were in force. The learned

counsel argued that if the effect of the provisions in sub-sections (1) and (2) of

sections 54 and 137 were intended to continue, then section 137 (5) also would

have been continued, and that the fact that the legislature omitted section 137 in

toto including sub-section (5) thereof showed that the intention was not to continue

the effect of the provisions in sub-sections (1) and (2) of sections 54 and 137. It is

true that sub-section (5) of section 137 permitted the assessee or the party by

whom the documents were filed to produce or disclose the same if he so desired,

and subsequently the legislature, in its wisdom, instead of giving that option to the

assessee left the production and disclosure to the discretion of the Commissioner.

That does not, however, mean, in our opinion, that the right or obligation acquired,

accrued. or incurred by virtue of sections 54 and 137 was thereby completely

destroyed. It would at the most mean that the sad right or obligation which was

earlier subject to the option given to the assessee or the party that filed the

documents, has since been made subject to the power given to the Commissioner.

( 51 ) MR. Watel argued also that while under section 54 of the Indian Income-tax

Act, 1922. there was an absolute ban against the Court requiring the production of

the documents, records, etc. or evidence thereof to be given, section 137 (5) lifted

the ban imposed by section 54 so far as voluntary disclosure by the assessee who

filed the documents, and to that extent the jurisdiction of the Court was restored.

We do not think so. The provision in section 137 (5) would no doubt apply to

documents, records, etc. filed after April 1, 1962. But. so far as documents. records,

etc. filed prior to April 1, 1962, which we are now considering in dealing with

question I (a), are concerned, the absolute prohibition in section 54 applies to them

subject of course to the exceptions in section 54 (3), and the right or obligation

acquired, accrued or incurred cannot be said to have been destroyed by reason of

the provision in section 137 (5 ). In this connection, Mr. Watel referred to the

decision in Income-tax Officer, Central Circle. Madras v. P. Ramaratnam and others,.

(1965) 58. T. R. 297 (27) (Madras) in which it was held by Sadasivarn. that certain

documents could be summoned by the Court by virtue of section 137 (5) at the

instance of the assessee. In that case, the documents were filed prior to April 1,

1964. It is not, however. clear from the judgment whether they were filed prior to

April 1, 1962. In the absence of that detail, we consider that the documents must

have been filed after April 1, 1962, but before April 1, 1964, in which case tile

exception in section 137 (5) applied and the Court could summon the documents at

the instance of the assessee himself. The decision cannot, therefore, be of any

assistance to the learned counsel.

( 52 ) MR. Watel also pointed out that section 59-B which came into effect on April,

1960, as well as section 138 as originally enacted in the Income-tax Act. 1961,

restricted the information that could be furnished by the Commissioner to the

amount of tax determined and that too in respect of any assessment made on or

after April 1, 1960, while section 138 (l) (b) substituted with effect from April 1,

1967, enlarged the ambit by using the words "any information", in respect of

assessments made on or after April 1, 1960, and argued that it suggests that the

intention was not to continue the right or obligation already acquired. accrued, or

incurred under sections 54 and 137. There is no force in this argument. The

legislature conferred a limited powers on the commissioner by section 59-B and

section 138, and subsequently enlarged the power to the extent stated in section,

138 (l) (b ). From this circumstance alone, it cannot be said, in our opinion, that the

intention, was to destroy the right or obligation already acquired, accrued or

incurred. On the other hand, the fact that section 138 (1) (b) provides only for

assessments on or after April 1, 1960, as did the provision in sections 59-B and 138

when sections 54 and 137 were in force, seems to suggest that the intention was

not to destroy such right or obligation.

( 53 ) THE last contention of Mr. Watel regarding question I (a) was that whatever

might have been the position prior to April 1, 1967, section 138 (l) (b), which was

enacted on the said date, enabled a person to make an application to the

Commissioner for any information relating to any assessee in. respect of any

assessment made under the 1922 Act or the 1961 Act on or after April 1, 1960, that

the words "on or after the 1st day of April, 1960", referred to the making of the

application and not to the making of the assessment, that consequently a person.

could apply after April 1, 1960, under section 138 (l) (b) for information even in

respect of documents, records, etc. filed when section 54 was in force, that section

138 (l) (b) thus implied an intention contrary to the provision in section 6 (c) of the

General Clauses Act, and so the said section 6 (c) was not attracted, with the result

that the prohibition in section. 54 did not subsist in respect of documents filed when

section 54 was in force,. e. . filed prior to April 1, 1962, and that a Court could,

therefore, require the production of the said documents, records, etc. or evidence

thereof to be - given. The contention cannot be accepted. In the first place, the

words "on or after the 1st day of April, 1960", on a plain reading of the clause, seem

to refer to the making of the assessment rather than to the making of the

application. Secondly, the provision - in section 138 (l) (b) was not introduced for

the first time. The previous sections 59-B. 138 and 138 (1) also contained a similar

provision though of a smaller ambit, April 1, 1960, was the date on which section

59-B was added by amendment. Prior to April 1, 1960, there was only section 54

which contained The absolute prohibition against a court requiring the production of

the documents, records, etc. or evidence thereof to be given. During the period April

1, 1960, to April 1, 1962, there was the aforesaid prohibition under section 54 and

the enabling provision, was also there in section 59-B. Reading the two provisions

together, the position during that period was that while a Court was absolutely

prohibited, the Commissioner was empowered to furnish information to the extent

mentioned in section 59-B. Similarly during the period April 1, 1962, to April 1, 19.

64, the right or obligation acquired, accrued or incurred by virtue of section 54 in

respect of documents, records, etc. filed prior to April 1, 1962, subsisted as

explained by us earlier, and consequently the Court remained prohibited, while the

Commissioner had the power to furnish information to the extent mentioned in

section 138 as it then stood. Between April 1, 1964, and April 1. 1967, the aforesaid

right or obligation continued to subsist, and consequently the Court remained

prohibited, while the Commissioner had the power to furnish information to the

extent mentioned in section 138 (1) as it then stood. After April I, 1967, the right or

obligation continued to subsist and the Court continued to remain prohibited, while

the Commissioner has the power to furnish information to the extent mentioned in

section 13s (1) (b ). Thus, even after April 1, 1967, the documents, records. etc.

filed prior to April 1, 1962, cannot be required by a Court to be produced and

evidence thereof cannot be required by a Court to be given. The contention of the

learned counsel has. therefore, to be rejected.

( 54 ) FOR the foregoing reasons, our answer to question 1 (a) is that where

documents, records, etc. , such as were mentioned in section 54 (1) of the Indian

Income-tax. 1922, were filed by an assessee or a: third party before April 1. 1962,

in respect of assessment years upto and including assessment year 1961-62, in

proceedings for the said assessment years taking place under Indian Income-tax

Act, 1922, the declaration of their confidential nature and the prohibition against a

Court requiring any public servant to produce before it any such documents, etc. or

to give evidence before it in respect thereof laid down in section 54 (1), and the

liability of a public servant to punishment for disclosure of any particulars contained

in such documents, etc. laid down in section 54 (2) remained unaffected and

continued to subsist notwithstanding the repeal of the Indian Income-tax Act, 1922,

the enactment of the Income-tax Act, 1961, and the amendments of sections 137

and 138 on April 1, 1964, and April 1. 1967.

( 55 ) COMING now to question l (b) which relates to documents, records, etc. filed

by an assessee or a third party after April 1, 1962, but before April 1, 1964, in

respect of assessment years up to and including 1961-62 in proceedings for the said

assessment- years taking place under the Indian Income-tax Act, 19-22, it has to be

noted that with effect from April 1, 1962, the Indian Income-tax Act, 1922, had

been repealed and the Income-tax Act, 1961, had come into force, and even though

the documents, records, etc. were filed after. April 1, 1962, they were filed in

assessment proceedings taking place under the Indian Income-tax Act, 1922.

Therefore, the provisions in sections 54 and 59-B apply, and the position in law is

the same as in the case of documents, records, etc. dealt with in question 1 (a ).

( 56 ) AS regards question l (c), it has to be noted that it relates to documents,

records, etc. filed by an assessee or a third party after April 1, 1962, but before April

1, 1964, in respect of assessment years up to. and including assessment year 1961-

62 in proceedings for the said assessment years taking place under the Income-tax

Act, 1961. Here, although the documents are in respect of assessment years up to

and including assessment year 1961-62, yet they were filed after April 1, 1962, in

proceedings taking place under the Income-tax Act, 1961. The Indian Income-tax

Act, 1922, having been repealed with effect from April 1, 1962, the provisions of

sections 54 and- 59-B ceased to exist. The proceedings being under the provisions

of the Income-tax Act, 1961, which came into force with effect from April 1, 1962,

the provisions of that Act were applicable to the proceedings. However, sub-section

(1) of section 137 of the Income-tax Act, 1961. contained provisions almost identical

with the provisions in sub-section (1) of section 54 of the Indian Income-tax Act,

1922. The declaration of the confidential nature of I he documents and the

prohibition against any Court requiring any public servant to produce or to give

evidence in respect thereof continued under section 137 (1) of the Income-tax Act,

1961. It is true that subsection (2) of section 137 merely prohibited a public servant

from disclosing any particulars of the documents mentioned in sub-section (1) of

section 137. while sub-section (2) of section 54 of the Indian Income-tax Act. 1922.

made the disclosure by a public servant punishable. This difference in the provisions

is immaterial for the purposes of the present discussion. Sub-sections (3) to (5) of

section 137 of the Income-tax Act, 1961, were similar to sub-sections (3) to (5) of

section 54 of the Indian Income-tax Act, 1922. The provisions in section 138 of the

former Act were also similar to the provisions in section 59-B of the Indian Incometax

Act, 1922. That being so, the reasons given by us regarding documents, records.

etc. filed prior to April 1, 1962, in dealing with question, 1 (a) would apply equally to

the documents mentioned in question l (c) also. In other words, the answer to

question l (c) is that where documents, records, etc. such as were mentioned in

section 137 (1) of the Income-tax Act, 1961. were filed by an assessee or a third

party after April 1, 1962, but before April 1, 1964, in respect of assessment years up

to and including assessment year 1961 -62 in proceedings for the said assessment

years taking place. under the Income-tax Act, 1961, the declaration of their being of

confidential nature and the prohibition against a Court requiring any public servant

to produce before it any such document etc. or to give evidence before it in respect

thereof laid down in. section 137 (1), and the prohibition against a public servant

disclosing any particulars contained in any such documents, records. etc. laid down

in section 137 (2) remained unaffected and continued to subsist notwithstanding

the omission of section 137 and the amendments of section 138 on April 1, 1964.

and April 1, 1967.

( 57 ) COMING next to question l (d), it has to be noted that it relates to documents,

records, etc. filed by an assessee or a third party after April 1, 1962, but before April

1, 1964, in respect of assessment years 1962-63 and 1963-64 in proceedings for the

said assessment years taking place under the Income-tax Act, 1961. The position of

law regarding the said documents, records, etc. is the same as in the case of

documents, records, etc. dealt with in section l (c) because sections 137 and 138

apply ft) such documents, records, etc.

( 58 ) THE second question referred to this Full Bench is as regards the position of

law relating to privilege after April 1. 1964. As pointed out by Mr. B. N. Kirpal,

learned counsel for the Income-tax Department, in dealing with the said question,

the following situations or aspects require to be considered, viz. WHERE the

documents, records, etc. in respect of which privilege is claimed were filed by an

assesses or a third party after April 1, 1964, in respect of assessment years up to

and including assessment year 1961-62 in proceedings for the said assessment

years taking place under the Indian Income-tax Act, 1922: where the, documents,

records, etc. were filed by an assessee or a; third party after April 1, 1964, in

respect of assessment years up to and including assessment year 1961-62 in

proceedings for the said assessment years taking place under the Indian Income-lax

Act, 1961; where the documents, records, etc. were filed by an assessee or a third

party after April 1, 1964. in respect of assessment years 1962-63 and 1963-64 in

proceedings for the said assessment years taking place under the Income-tax Act,

1961; and where the documents, records, etc. were filed by an assessee or a third

party after April 1, 1964, in respect of assessment years 1964-65 onwards. The

second question referred has thus to be treated as consisting of questions 2 (a) to 2

(d) and answered seriatim. Into which of the four categories (a) to (d) of the second

question a given proceeding would fall, has to be determined in the light of the

provisions in section 297 (2) of the Income-tax Act, 1961.

( 59 ) SO far as question 2 (a) is concerned, since the proceedings were taking place

under the Indian Income-tax Act, 1922, in respect of assessment years upto and

including 1961-62, the provisions in sections 54 and 59-B apply, and the position in

law is the same as that stated by us in our answers to questions 1 (a) and l (b)

above.

( 60 ) AS regards question 2 (b), it has to be noted that although the assessment

years were upto and including assessment year 1961-62, yet the proceedings were

taking place under the Income- tax Act, 1961, and the documents, records, etc.

were filed after April 1, 1964. . e. when sections 54 and 59-B had been repealed,

section 137 also had been omitted and either section 138 (1) and (2) as substituted

by Finance Act No. " 5 of 1964 or section 138 (l) (a) and (b) and (2) as substituted

by Finance Act No. 20 of 1967 was in operation. Therefore, section 138 (1) and (2)

as substituted by Finance Act No. 5 of 1964 or section 138 (l) (a) and (b) and (2) as

substituted by Finance Act No. 20 of 1967 applied according as the documents,

records, etc. were filed between April 1. 1964. and April 1,1967, or were filed after

April 1, 1967. In either case, there was no longer any declaration of the confidential

nature or a prohibition against the Court or a prohibition against a public servant as

in section 54 of the 1922 Act or section 137 of the 1961 Act. There were only the

provisions in section 138 (1) and (2) as substituted in 1964 or in section 138 (l) (a)

and (b) and (2) as substituted in 1967, which empowered the Commissioner under

the former, and the Board also under the later, to furnish or cause to be furnished

information as provided in the said sections.

( 61 ) THE legal position in a. case where documents were filed after April 1, 1964,

has been considered in some decisions, in Nazir Mohammads case (supra), an

application was filed on July 7. 1970, in a suit in a civil court for summoning

documents for the assessment years 1965-66 to 1968-69. R. N. Mistra. held that

"there was no ban on a Court calling for production of the income tax assessment

records of an assessee for any period subsequent to April 1, 1964". The learned

Judge also observed that section 138 (1) (b) was an enabling provision and did not

deal with any restriction on the Court summoning the documents.

( 62 ) IN Smt. Rama Gouri Devis case (supra), S. Sarwar Al. held that "after the

repeal of section 137 of the Income-tax Act, 1961, by Act V of 1964, there cannot

be any impediment in the way of a civil court in directing production of documents

which were filed before an Income-tax Officer". It has, however, to be noted that. it

is not clear from the judgment as to when exactly the documents were filed before

the Income-tax Officer.

( 63 ) IN Amar Singh Lamba v. Sewa Singh and another (1973) 90. T. R. I (Punjab

and Haryana) (F. B.), certain assessment records of an assessse prepared after April

1, 1964, were sought to be summoned in a suit in a civil court. It was contended on

behalf of the opposite party that in view of clause (b) of sub-section (1) of section

138, even when the court requisitions any record from the income-tax authorities,

the matter has to be decided by the Commissioner of Income-tax as to whether that

should be allowed to be produced or not. A Full Bench of the High Court, of Punjab

and Haryana (D. K. Mahajan, Bal Raj Tuli and Prem Chand Jain. ). held that the

aforesaid clause was not amenable to that interpretation. The learned Judges

observed at page 9 that the function to be performed by the Commissioner under

section 138 (l) (b) was purely administrative and his decision was subjective on the

point whether it was in the public interest to furnish the information or not and that

was way his decision had been made final that it could not be said that by enacting

the aforesaid provision of law, the legislature intended. that the Commissioner of

Income-tax was to sit in judgment over the requisition made by a court of law

requiring the production of certain records of assessment relating to an assessee

that the scope of the power of the court under the general law for summoning the

relevant record was entirely different from the scope of the power of the

Commissioner of Income-tax under the aforesaid clause; and that the repeal of

section 137 of the Act of 1961 clearly indicated that the legislature thought that it

was no more necessary to keep the records of assessment by the Income-tax

Department relating to an assessee as confidential, and the bar with regard to the

production of any part of the assessment records was removed as far as ^o courts

were concerned.

( 64 ) WITH respect, we are unable to agree. It is true that a civil court has power

under the general law for summoning documents or records relevant to the case

before it. But. that power has to be subject to the provision in a special statue like

the Income-tax Act. The Indian Income-tax Act, 1922. by section 54 thereof,

declared such documents, records, etc. as confidential and prohibited a court from

requiring, the production of such documents, records, etc. and from requiring

evidence thereof to be given before it. it also made the disclosure of any particulars

of any such documents, records, etc. by a public servant punishable with

imprisonment and or fine. Later, in 1960, the legislature, by adding section 59-B.

relaxed the provisions to a limited extent by empowering the Commissioner of

Income-tax to furnish or cause to be furnished information only as to the amount of

tax determined as payable by an assessee in respect of any assessment made after

April 1, 1960, if he was satisfied that there were no circumstances justifying its

repeal. . The position remained under sections 137 and 138 of the Income-tax Act,

1961, practically the same even after the repeal of the Indian Income-tax Act, 1922,

except that section 137 (2) merely prohibited a public servant from disclosing any

particulars contained in such documents, records, etc. , while section 54 of the

Indian Income-tax Act, 1922. made the disclosure by a public servant punishable.

Thereafter, in 1964, section 137 was completely omitted and by section 138 (1) and

(2) the Commissioner was empowered to furnish information if he was satisfied that

if was in the public interest so to do, and the Central Government was empowered

to direct by order notified in the Official Gazette that no information or document

shall be furnished or produced by a public servant in respect of such matters

relating to such class of assesses or except to such authorities as may be specified

in the order. Subsequently, in 1967. the decision of the Commissioner of Income-tax

was declared under section 138 (l) (b) to be final and not liable to be called in

question in any court of law.

( 65 ) THE complete omission of the declaration of the confidential nature of the

documents, records, etc. and the removal of the ban on courts and public servants,

no doubt, suggests that the power of a court under the general law to. Summon

such documents, records, etc. relevant to the case before it has been restored. But,

at the same time, the legislature which empowered the Commissioner of Income-tax

to furnish the information if he is satisfied that it is in the public interest so to do,

made the decision of the Commissioner final and unquestionable in a Court of law.

When two powers are thus vested in two legal authorities, neither of them can be

ignored and both of them have to be reconciled and given effect to. In the case of

the two powers under consideration, it has to be noted that the power to summon

which vests in a court is under the general law, while the power of the

Commissioner has been conferred upon him by a special law and has. therefore, to

prevail over the former. In view of the same, it has to be held that while it is open

to a court to summon the documents, records, etc. from the Income-tax

Commissioner, it is equally open to the Commissioner on receiving the summons to

consider whether the production furnishing of the documents, records etc. would be

in the public interest, and submit the same to the court in answer to the summons.

( 66 ) THE above; view seems to b. i correct and proper in view of two other

considerations. When, by emitting section 137, the legislature has removed the

confidential nature of the documents, records, etc. as well as the ban on a Court

and on a public servant, can the same be brought in in a circuitous way under

section 138 (l) (b) In our opinion, it cannot be so done. Also, under section 138 (l)

(b), complete discretion has been given to the Commissioner of Income-tax to

furnish or cause to be furnished the documents, records, ,etc. or any information

therein in case "he is satisfied that it is in the public interest so to do, and not to

furnish in case he is not satisfied. Can that be set at naught by filing a suit and

getting summons issued by the Court for the production of the documents, records,

etc. or for the, furnishing of any information therein If it can be so done, it would

obviously frustrate the object of the provision in section 138 (l) (b ). Further, though

the prohibition or ban incorporated in sections 54 and 137 has been omitted, the

legislature apparently intended to avoid free publicity of the documents, records.

etc. or any particulars thereof given in confidence by an assessee to the Income-tax

Officer as well as other information secured by the Income-tax Officer from other

sources, and that was why a restriction has been imposed upon the Commissioner

of Income-fax by section 138 in the mailer of furnishing or causing to be furnished

any information in the documents, records, etc. In this connection, an observation

made by Lord Denning in Norwich Pharmacal Co. and others v. Commissioner of

Customs and Excise (1972) 3 All E. R. 813 (28), 818, is apposite. In that case, by

virtue of section 28 of the English Customs and Excise Act, 1952. whenever goods

are imported the importer has to fill in the form of entry giving the name of the

importers, the description of the goods and so forth, and thus the customs authorities

have, in their possession, the names of the importers. The customs authorities

regard the said information as confidential and do not publish it at all. The said

confidence was strongly confirmed in the Finance Act of 1357. Section 3 of that Act

authorised the Commissioners of Excise and Customs to disclose some of the

information to others if it is in the National interest, or, rather, if the Secretary of

State is satisfied that it is in the National interest, but it was provided in the section

that the Commissioners were not to disclose "the price of the goods or the name of

the importer of the goods". In other words, those said matters were sacrosanct. and

not even the Secretary of State could require them to be disclosed even when it was

in the National interest. Referring to the said provision. Lord Denning observed at

page 818 as under : "even if the plaintiffs could over-come that hurdle they are

faced with another. It is that the names of the importers were given to the customs

authorities in confidence for a limited and restricted purpose and the Courts ought.

not to compel the customs to break that confidence. " Similarly, in the present case,

a Court has to respect the restraint placed on the Commissioner of Income-tax and

desist from breaking the confidence reposed in the income- tax authorities by an;

assessee or the third party. The view taken by us above is in accord with the said

principle.

( 67 ) FOR the foregoing - reasons, our answer to question 2 (b) is that when a

party to a proceeding in a Court applies for summoning any documents, records,

etc. from the income- tax authorities, the Court may summon the said documents.

records, etc. But, on receipt of the summons, it is open to the Commissioner of

Income-tax to consider the matter is provided under section 138 (1) (b), and decide

whether it would be in the public interest to produce or furnish the documents,

records, etc. summoned for, and submit his view to the Court in answer to the

summons. In case, he is satisfied that the production, etc. would not be in the public

interest, his decision is final and the Court to which the said decision is

communicated cannot question the same.

( 68 ) AS regards questions 2 (c) and 2 (d), the answers are the same as our answer

to question 2 (b ).

( 69 ) THE third question referred to the Full Bench is "what is the effect of the

production of certified copies relating to income-tax assessment records, and how

far certified copies can be admitted in evidence" Mr. S. L. Bhatia, learned counsel

for the plaintiff, sought to argue under the first part of the question that if any

party had obtained certified copies of his own documents or of documents of third

parties, the ground of privilege does not subsist, and the party is entitled to produce

the certified copies and prove those documents. Mr. Watel, learned counsel for the

defendants, sought to argue under the second part of the question "that certified

copies of returns of an assessee filed before the Income-tax authorities. and other

related records, cannot be said to he public documents, that the certified copies of

the said documents would, therefore, not be admissible per se in the absence of

legal proof in terms of section 67 of the Evidence Act. and that this would be.

particularly true of the certified copies of returns and other documents alleged to

have been filed by a party other than the party obtaining and producing the certified

copies of the said documents".

( 70 ) THE points sought to be argued by both the learned counsel have to be

considered and answered only with respect to a particular document and not in a

general manner. For instance, the argument of Mr. Bhatia regarding the subsistence

of the ground of privilege can be considered only with respect to a particular

document and the answer would depend, inter alia. upon the facts as to when it

was filed before the income-tax authority, to which assessment year it relates, and

under which of the two Acts of 1922 and 1961 the assessment proceeding in which

it was filed was taking place. Similarly the argument of Mr. Watel regarding the

admissibility and proof of a certained copy and the question whether the original of

that copy is a public document can be considered only with respect to a particular

document, and the answer would depend upon What that document is,. e. whether

it is a return, a statement recorded by the Income-tax Officer and so forth. Under

the third question referred to the Full Bench, we are not called upon to give our

opinion with respect to any particular document or documents. We, therefore, do

not express any opinion on the third question. The reference is answered

accordingly.