Tulsiram Sanganaria & ANR Vs.
Shrimati Anni Rai & Ors  INSC 5 (7 January 1971)
SHAH, J.C. (CJ) HEGDE, K.S.
CITATION: 1971 AIR 671 1971 SCR (3) 310
Income-tax Act (11 of 1922), s. 54-Production
of assessment order by assessee or his representative-If admissible in
Section 54 of the Income-tax Act, 1922,
created a complete bar to the production by officials and other servants of the
Income-tax Department of the documents mentioned in the section. But, where the
assessee or his representative-in- interest himself produces a copy of the
incometax assessment order in any legal proceeding the order would be
admissible in evidence. [311H; 312 G-H; 31 B A] Emperor v. Osman Chotani (1942)
10 I.T.R. 429, Suraj Narain v. Seth Jhabhu Lcl & Ors., (1945) 13 I.T.R. 13
and Buchibai v. Nagpur University, (1947) 15 I.T.R. 150, approved.
Charu Chandra Kundu v, Gurupada Ghosh, 
2 S.C.R. 833, referred to.
ClVlL APPELLATE JURISDICTION: Civil Appeals
Nos. 1001 to 1003 of 1965.
Appeals from the judgment and decree dated
December 22, 1961 of the Orissa High Court in First Appeals Nos. 82, 83 and 84
Bishan Narain and P. C. Bhartari, for the
'appellants (in all the appeals).
B. P. Maheshwari, for respondent No. 1 (in
C.A. No. 1002 of 1965).
Sadhu Singh and Jagmohan Khanna, for
respondents Nos. 1 to 5 (in C.A. No. 1003 of 1965).
The Judgment of the Court was delivered by
Grover, J. These appeals have been brought by certificate from a common
judgment of the Orissa High Court.
Five different suits were filed against
certain defendants on the foot of five different pronotes. All the five suits
were' heard together and were decreed by the trial judge.
In respect of two suits the valuation being
low the appeals were preferred before the District Judge and in three suits the
appeals were filed in the High Court. The High Court dismissed the appeals. It
is altogether unnecessary to refer to the points in controversy between the
parties because. the sole question which has been agitated before us relates to
the admissibility of certain assessment orders 311 on which reliance has been
placed for deciding whether the contesting defendants were the partners of firm
Surajmal Manilal on whose behalf the pronotes had been executed. The learned
subordinate judge had found that the suit transactions were genuine and
execution on behalf of the firm as well as the passing of consideration had
been proved. He had further found that the contesting defendants were joint
with their uncle Manilal in 1949 and that they were the partners of the firm
Surajmal Manilal-being members of a trading family, and therefore they were
liable to the extent of the assets of the joint family in their hands. It
appears that the assessment orders were produced not by the contesting
defendants but by the son of Manilal who was the assessee. After examining s.
54 of the Income tax Act 1922 and the various decisions of the High Courtís the
learned judges of the High Court ,game to the conclusion that the general consensus
was that if a copy of the assessment order or a certified copy thereof was
produced by the assessee waiving his privilege it would be admissible in
Section 54(1) of the Act was in the following
terms S. 54(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 of record or any part of any such record, or to give
evidence before it in respect thereof." Under sub-section (2) if a public
servant disclosed any particulars contained in a statement, return etc.
mentioned in sub-s. (1) he was liable to punishment with imprisonment as well
as fine. The prohibition against disclosure was not applicable to the facts and
particulars in such cases and circumstances as were set out in sub-s. (3).
Now it is quite clear that s. 54 created a
complete bar to the production by officials and other servants of the Income
tax Department of any such documents which were mentioned in sub-ss. (1) and
(2). It also made it obligatory on them to treat as confidential the records
and documents mentioned in the 312 sub-sections. They were further prohibited
from giving any evidence. relating to them. The question which came up for
consideration before the courts was if the documents could be given without
requiring a public servant to produce them could the court allow them to be
tendered and admitted into evidence ? The Madras High Court held in Mythili
Ammal v. Janaki Ammal & Another(") that statements made in income tax
returns could not be brought up in court against the person making them or
against any one else nor could the income returns be proved by secondary
evidence under s. 64 of the Indian Evidence Act. The Calcutta High Court in
Promatha Nath Pramanick v. Nirode Chandra Ghose (2) considered it startling
that when an assessment order was to be treated as confidential under s. 54 of
the Act a joint assessee could be permitted the use of the copy of such an
order to the detriment of his co-assessee in contentious proceedings between
them. A Full Bench of the Madras High Court, however, held in Rama Rao v.
Venkataramayya(3) that a return was confidential and could not be disclosed to
a third party but there could be no objection to the maker of a return having a
COPY for his own purposes if he so desired and he was not bound to treat the
document as confidential. In other words he could produce that document as
evidence in court.
It is unnecessary for the purposes of this
case to go into the larger question of production of the documents covered by
s. 54(1) by third parties as it was the son of Manilal the assessee who had
produced the assessment orders which are in dispute. There is an overwhelming
weight of authority in favour of the view that assessment orders could be
produced by the assessee or his representative-in- interest; see Emperor v.
Osman Chotani(4), Suraj Narain v. Seth Jhabhu Lal & Others(5) and Buchibai
v. Nagpur University(6). In our opinion the law laid down by these cases on the
admissibility of evidence of assessment orders produced by an assessee or his
representative-in-interest is unexceptionable. We may refer to a decision of
this Court in Charu Chandra Kundu v. Gurupada Ghosh (7) on which reliance was
placed on behalf of the appellants. There the appellant had applied to the
trial court praying that the Commissioner of Income tax be directed to arrange
for the production before the court of the record of the statement made by the
respondent therein. In that situation it was held that the prohibition imposed
under s. 54 of the Act was absolute and the operation of the section was not obliterated
by any waiver by the assessee in whose assessment the evidence was tendered,
documents produced or (1) 7 I.T.R. 657. (2) 7 I.T.R. 570 (3) 8 I.T.R. 450. (4)
(5) (1945)131.T.R.13. (6) (1947)151.T.R.150.
(7)  2 S.C.R. 833.
313 record prepared. It is apparent that in
that case the question of production of an assessment order by the assessee
himself did not come up for consideration.
These appeals fail and are dismissed with
costs. One hearing fee.
V.P.S. Appeals dismissed.