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Civil Revision Petition No. 196 of 1961, decided on 2nd July 1962.

S. 54(3)(m) ‑ Income‑tax pro ceedings‑Prohibition of disclosure of particulars ‑ Summoning income‑tax returns to prove that defendants were a Joint Hindu family‑Permissibility‑Scope of S. 54(3)(m).

Clause (m) of section 54(3) of the Income‑tax Act, 1922, permits disclosure only of such particulars as may be‑necessary to establish whether a person has or has not been assessed to income‑tax in any particular year or years, when under the provision of any law such fact is required to be established. Proof of other matters generally falling under the Evidence Act is not covered by clause (m). Consequently, an Income‑tax Officer cannot be called upon to produce the income‑tax returns filed by the defendants in a civil case to prove that the defendants constituted a joint Hindu family.

Seshavatharam v. Venkata Rangayya A I R 1947 Mad. 111 distinguished.

[Cases‑Law referred]:

T. Ramachandra Rao for A. Kuppuswamy for Petitioner.

K. E. Krishna Murthy for Respondent No. 1.

The question, how far the prohibition contained in section 54 of the Income‑tax Act, 1922, affects the mode of proof by a plaintiff of the joint family status of the defendants, is raised in this revision petition.

A few facts leading to the filing of this revision are the following:

The plaintiff, who is the first respondent herein, filed O.S. No. 77 of 1960, on the file of the court of the subordinate Judge, Bapatla, for recovery of sums given by him to the first defendant for carrying on tobacco trade by him. He joined the son, of the first defendant as second defendant and his brothers as defendants Nos. 3 and 4 to the suit. The defendants pleaded that the liability by the first defendant was not incurred by the first defendant as manager of the joint family and that as there was a partition even in January 1955, they could not be proceeded against in this suit. Therefore, in order to prove the contention of the plaintiff that all the defendants constituted members of a Hindu joint family, the plaintiff made an application, I. A. No. 80/61, to send for the income‑tax returns filed by the defen dants for the years 1953 to 1958. This application has been opposed in the lower Court by all the defendants on the ground that section 54 of the Income‑tax Act, 1922, imposes absolute prohibition in regard to the production of the returns by the Income‑tax Department and also from that Department disclosing particulars contained in those returns. On behalf of the plaintiff, a contention was raised that, inasmuch as the plaintiff has to prove the joint status of the defendants in accordance with the burden of proof laid on him under the Indian Evidence Act and the provisions thereof, clause (m) of subsection (3) of section 54 is attracted and, therefore, the income‑tax returns could be sent for. Reliance was placed in this regard on the case decided in Seshavatharam v. Yenkata Rangayya (A I R. 1947 Mad. 111). The lower Court held that the decision relied upon applied to this case and ordered the production of the documents by the Income‑tax Officer, Bapatla. As against this, the fourth defendant preferred the present revision petition.

It is convenient to take up a point raised on behalf of the first respondent herein (plaintiff) which is in the nature of a preliminary objection. Mr. K. B. Krishnamurthy argued that the fact that it is only the fourth defendants and not the other defendants who preferred the revision petition would go to show that the other defendants do not object to the order of the lower Court and that the fourth defendant could not be having special grievance to question that order. It is also pointed out by the learned counsel that in this case the attitude of the income‑tax authorities has not been disclosed as yet and, since they do not object to the production of the returns, the maintainability of this revision petition at the instance of the fourth defendant has to be questioned. Which ever way it is put, this objection, in my view, has no substance. It is not necessary, under law, that all the defendants should join in filing this revision, petition. Nor could it be said that because the fourth defendant did not make the others as respondents to this revision petition, this petition is not maintainable.

The other point that the income‑tax authorities have not protested against the proposal, made, by the plaintiff is not at all material for the determination of the question raised in this revision petition ; nor could it be said that this renders the revision application incompetent.

I shall now proceed to consider whether the order of the lower. Court can be upheld. The learned counsel for both parties are not at variance with the principle that subsection (1) of section 54 generally prohibits production of records relating to assessment proceedings which are treated as confidential and that, no party to a suit would be entitled to require any public servant to produce before it any such return or give evidence before it in respect thereof. But what is urged on behalf of the plaintiff in support of the lower Court's order is that the exception provided in clause (m) of subsection (3) of section 54 is attracted to the facts of this case. The argument on behalf of the plaintiff put by Mr. Krishnamurthy is that inasmuch as clause (m) had made an exception in regard to facts which, under the provisions of any law for the time being in force, are required to be established by letting in the record, it can be sent for even if that record is a return and is with the Income‑tax Officer. He elaborated this by pointing out that the plaintiff is required to prove that the defendants constituted members of a joint family and inasmuch as the Evidence Act laid the burden on the plaintiff, it would stand to reason that, under the provisions of the Evidence Act, proof by production of the income‑tax return is permitted under clause (m). But the reading of clause (m) in 'the manner is, in my view, wholly incorrect. That clause read with the main body of subsection (3) is in the following terms:

"54. (3) Nothing in this section shall apply to the disclo sure--

(m) of so much of such particulars, to the appropriate authority, as may be necessary to establish whether a person has or has not been assessed to income‑tax in any particular year or years, where under the provisions of any law for the time being in force such fact is required to be established."

The particularity with which this clause is phrased gives no room for including the provisions of the Evidence Act as com prised in the category of provisions of other law, because the Evidence Act, it may be pointed out, is ruled out as not coming in the way of operation of the prohibition. The non obstante clause in subsection (1) of section 54 could be said to make this clear beyond any doubt. In subsection (1), it is stated that the prohibition will operate notwithstanding anything contained in the Indian Evidence Act of 1872. Therefore; to have to construe that the "provisions of any law" referred to in clause (m) also includes the provisions of the Evidence Act will be to reckon with the very statute which has been kept out of the way in sub‑clause (1). Furthermore, clause (m) specifically mentions that the only question, viz., whether a person has or has not been assessed to income‑tax in any particular year or years is in dispute or, when any provisions of law require the same to be establish ed, the information shall be disclosed at the instance of the appropriate authority. Therefore, the requirements, according to this clause, are that the question must directly concern the establishment of the assessment of a person to income‑tax and not that it must incidentally arise for consideration as in this case for determining whether, by reason of joint assessment, the defendants are members of a joint family. It cannot also be said in the instant case that the question of assessment to income-tax has been made specifically the basis of decision as it is the case where section 26 of the Madras Agriculturists Relief Act applied. If this is borne in mind, it supplies the key for under standing the decision in Seshavatharam v. Venkata Rangayya. There, the question directly in issue was whether the defendants were agriculturists; and having regard to the mode of proof prescribed by the provisions of section 26 of the Madras Agricul turists Relief Act, the Court came to the conclusion that the fact whether the defendants were assessed to income‑tax, which was in issue and had to be established, could be done in that manner as the provisions of section 26 of the Madras Agriculturists Relief Act provided therefore. Therefore, that decision, it could be seen, was within the purview of the language of clause (m). But it cannot be said that the same is the position in regard to the instant case.

Mr. T. Ramchandra Rao, the learned counsel for the petitioner, on the other hand had relied upon the ruling in Banarsi Devi v. Janki Devi ((1959) 37 I T R 510). There, the Patna High Court had to consider whether the plaintiff was entitled to call for the production of the originals of the income‑tax returns from the authorities to prove that the defendants constituted a Mitakshara joint family. It may be observed that in that case the plaintiff even produced certified copies of those returns which he had with him. Even then; a Division Bench of the High Court ruled that since the object of section 54 seems to be that the matters referred to in such documents should be kept as strictly confiden tial between the assessee and the income‑tax Department, so that the assessee may not hesitate in placing before the department even confidential matters for purposes of assessment without fear of disclosure of those matters, the whole object of the section would be frustrated if such documents are permitted to be put in evidence by persons other than the assessee. It is also found that in the decision in Additional Income‑tax Officer, Anantapur v. Golla Narayanamma ((1958) 34 I T R 212), Subba Rao, C. J. held the same view. It could be said that the ruling in Muniyammal v. Third Additional Income‑tax Officer ((1960) 38 I T R 664), is to the similar effect. The consensus of judicial opinion thus is that unless required by any statute for the purpose of proving particularly that a person has or has not been assessed to income‑tax; the proof of other matters generally falling under the Evidence Act would not be covered by the exception enumerated in clause (m) of subsection (3) of section 54. Since this is enough for the purposes of the instant case, it is not necessary here for me to deal with a further question which has been the subject‑matter of varying decisions, viz., whether the information contained in the returns could be disclosed by the assessee himself or certified copies pertaining to the returns could be made use of.

From the above, it follows that the order of the lower Court has to be set aside as its view of the law is incorrect. In the result, the income‑tax returns will not be sent for.

This revision petition, is accordingly allowed with costs.

Petition allowed.

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