Report No. 69
V. Confidential Documents
35.18. Confidential documents.-
Another controversy seems to have arisen in the past in relation to certain documents which are required to be treated as confidential under a specific statutory provision. An example of such provision is in section 137 of the Income-tax Act, 1961, which corresponds to section 54 of the Income Tax Act of 1922. That section-as far as is material, and to state only its gist-provides that the documents in question shall be treated as confidential. As to the effect of such a provision on the question whether the documents are public documents and, if so, whether there, is a right to inspect, there appear to exist views on the subject,-the first being that by virtue of such a provision the documents cease to be public documents, the second being that though they are public documents, there is no right to inspect them, and the third being that they are documents subject to a right of inspection.
35.19. The first view is represented by a decision of the Bombay High Court,1 to which we have already referred. It was held in that case that the assessment order of the Income-tax Officer was not a public document, since it was confidential.
1. Devi Dutt v. Sri Ram, AIR 1932 Born 291.
35.20. The second view is represented by a Calcutta case,1 holding that whilst such an order is a public document, it is a document in respect of which there is no right to inspect. This view, while taking note of the fact that the Income-tax Manual allows the assessee to have a copy of the document, points out that the Manual has no statutory authority, and also that the Manual does not, in terms, provide for a right of inspection.
1. Promoth v. Nirode, AIR 1940 Cal 187 (Panckridge, J.).
35.21. According to the Allahabad High Court,1 the document is a public document in such a case, and further, it is also a document of which a certified copy can be given in evidence. This is also the view of the Patna High Court.2 The Allahabad view is based on the reasoning that the provision in the Income-tax Act for keeping the assessment order confidential was aimed simply at preventing the Income-tax Officer from betraying the confidence of which he is the recipient, and did not prohibit the assessee from giving evidence in respect of a document in his possession.
1. Suraj Narain v. Jhabu Lal, AIR 1944 All 114.
2. Hira Lal v. Ramanand, AIR 1959 Pat 515.
35.22. Recommendation as to confidential documents.-
In our view, it is desirable that the law on the subject should be clarified. Where a person has a right to inspect or to obtain a copy of a public document by law or by virtue of a non-statutory rule or order made by Government, then the mere fact that the officer is bound to keep the document confidential from others should be immaterial. The specific provision as to non-statutory rule or order is desirable, in view of the Calcutta decision that the Income-tax Mantra' does not have statutory authority. We recommend that the section should be so amended. Our reasons are as follows:-
Confidentiality as an obligation imposed on the Income-tax Officer or other authority is intended, in such cases, to prevent disclosure to third per-sons, and not a disclosure to the person affected by the order. For that reason, confidentiality should be immaterial in the context of section 76, where the copy is proposed to be used as evidence by that very person who is entitled to a copy.
35.23. "Any person".-
The words "any person" in section 76 would, at the first blush, Any person. seem to suggest that the section is meant for documents which every person has a right to inspect.
35.24. This, however, is not the only possible construction-Vide the words "that person", which later follow. If the section was intended to be narrow, the appropriate words would have been "every person" at both the places. The words "that person" seem to suggest that the right to copies is available to a person who has the right of inspection,-or, at least, that such can be a possible interpretation.
35.25. Dichotomy not helpful.-
It would not be improper to observe that such special cases cannot be adequately dealt with by resorting to the dichotomy of documents which-(i) the public have a right to see, and (ii) documents which no one can inspect as they relate to the affairs of the State. Where the question is whether certain documents are concerned with affairs of State, copies will not be given, and, in fact, even evidence thereof is not permissible without the permission of the head of the Department1 subject to the final determination by the court.2 In these cases the privilege is conferred in the interests of the state, and not for the protection of any person.
But, in the case of Income-tax assessment orders and the like, the position is not exactly the same.3 They are not records kept for the information of the public, it is true. But, at the same time, they are not records kept exclusively for the information of the executive. The dichotomy referred to at the outset in this paragraph would not produce just and satisfactory results in regard to the right to inspect, because the documents in question (like income-tax assessments and income-returns) stand midway between a document which every member of the public has a right to inspect (on the one hand) and a document which no citizen has a right to inspect (on the other hand).
1. Section 123.
2. State of Punjab v. S.S. Singh.
3. Muniayommal v. 3rd Addl. I.T.
35.26. Subject of provisions as to confidentiality.-
The principal object of such provisions as to confidentiality is fairness to the assessee. In a Madras case,1 it was observed-
"A full disclosure of a person's affairs may be attendant with the risk that it prejudices him in his business. The statute, therefore, contains stringent provisions in the matter of disclosure by rendering a breach thereof by a public servant punishable under section 54(2). It must be noticed that the protection given by section 54 was for the benefit of the assessee.2 It would, therefore, stand to reason that he could, if he so chooses, waive the privilege conferred on him."
1. Muniayommal v. 3rd Addl. I.T.
2. Emphasis added.
35.27. In a Patna case1 the object of section 54, Indian Income-tax Act, 1922, was thus described-
"The object of this section seems to be that the matters referred to in such documents should be kept strictly confidential as between the assesses and the Income-tax Department so that the assessee and the Income-tax Department may not hesitate in placing before the department even confidential matters for the purposes of assessment without fear of any disclosure of those matters."
In view of what is stated above, the law should be amended as already indicated.
1. Banarsi Devi v. Janki Chowdhry, J.).