Muniyammal, Proprietrix, Salem vs Third Additional Income Tax Officer, Salem and Another

Ramachandra Iyer, J.

(1) This is a petition under Art. 226 of the Constitution for the issue of a writ of prohibition or other appropriate writ, prohibiting the first

respondent from granting to the second respondent certified copies of Income Tax assessment orders or other records relating to the Income Tax

assessment of one G. V. Rangaswami Naidu.

(2) G. V. Rangaswami Naidu was an Income Tax assessee who was running a bus service in Dowlatabad, Krishnagiri, Salem Dt. He died intestate

on 21-10-1956, leaving behind him his heirs, the first petitioner, his widow, a minor daughter, and the 2nd respondent, his mother. The widow

entered into possession of the estate. She put herself forward as the proprietrix of the bus service, and she submitted returns to the Income Tax

authorities for the assessment years 1956-57 and 1957-58. She was assessed to tax on the basis of the returns; the taxes have also been paid.

(3) The second respondent filed O. S. No. 3 of 1957 in the court of the Subordinate Judge, Salem, against the petitioner and her daughter,

claiming partition of the estate left by her son, Rangaswami Naidu. The bus service was one of the items of properties, in respect of which partition

was claimed. With a view to establish her title to the properties, she applied, on 6-9-1957, to the first respondent for the grant of certified copies

of the Income Tax returns filed by G. V. Rangaswami Naidu and also the assessment orders thereon for the years 1951-52 to 1956-57. The

petitioner does not want that the second respondent should obtain the copies, and she has applied for the issue of a writ by this court to prevent

the first respondent from granting the copies.

(4) The case for the petitioner is that she is the sole legal representative of the deceased, treated at any rate as such by the Income Tax authorities,

and that, therefore, the grant of the copies to the 2nd respondent would contravene the provisions of S. 54 of the Indian Income Tax Act. That

position is denied by the second respondent. She claims that she is also one of the legal representatives of the deceased, Rangaswami Naidu, being

entitled to a share of the assets left by him, and that she, representing the estate of the deceased, would be entitled to the copies applied for.

It is contended on her behalf that S. 54 confers only a privilege on the assessee to treat the documents referred to therein as confidential, a

privilege which could be waived by him, and she, standing in the shoes of the deceased, could exercise the same power, apply for the copies,

obtain them and produce the same as evidence in the partition suit. In support of that contention, reliance was placed on the decision in RAMA

RAO Vs. VENKATARAMAYYA., , where it was held that a profit and loss statement and one showing details of net income filed by an

assessee in support of his return were public documents which could be proved by the production of certified copies, and that S. 54 of the Indian

Income Tax Act did not make the issue of a certified copy of Income Tax return to an assessee illegal.

It was also held that the assessee was not bound to treat the documents as confidential. In Emperor Vs. Osman Chotani, it was held that S. 54 did

not expressly enact that the documents referred to therein were inadmissible, but only provided that such documents should be treated as

confidential; and that no court could require a public servant to produce the same, but as the documents should be treated as confidential only in

the hands of other persons, it was open to an assessee to disclose the contents of the documents.

A similar view was expressed in Suraj Narain Vs. Seth Jhabbu Lal and Others, . In (1947) 15 ITR 150 the widow of a deceased assessee applied

for and obtained certified copies of the statements made by the assessee to the Income Tax authorities. The principal question decided was that it

was open to the assessee to produce or allow production of those documents in court. The right of the assessee to waive the objection for the

production of the Income Tax statements was held to inhere in his widow, who, in that case, was representative of his estate.

(5) The decisions referred to above were not directly concerned with the question that has been raised in the present case, namely, in what

circumstances certified copies of the statements could be given by the Income Tax authorities after the assessee had died, and when there was a

dispute between his heirs.

(6) In terms, Sec. 54 prohibits a disclosure by the officials of the Income Tax department. A court cannot require the documents mentioned in S.

54 to be produced. S. 54, which, so far as it is relevant for the purpose of the present case runs as follows:

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 (I 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.

If a public servant discloses any particulars contained in any such statements, 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.

Subject to the exceptions recognised in S. 54(3), the prohibition against disclosure of the statements, made by an assessee is absolute. Likewise, a

court cannot require any public servant, to produce the returns, accounts or documents or any part thereof. The provisions of the section were

obviously enacted in the interests of the public and of the revenue. It is obviously in the interest of the latter and of fairness to the assessee that he

should be assured that the statements made to him would not be revealed to others.

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 S. 54(2). It must be noticed that the

protection given by S. 54 was for the benefit of the assessee. It would, therefore, stand to reason that he could, if he so chose, waive the privilege

conferred on him.

There would, therefore, be nothing objectionable in principle for him to disclose the contents of the documents mentioned in S. 54 or produce the

copies of the same in court. The terms of that section while it prohibits the Income Tax Officer from producing and a court from compelling the

officer to produce, cast no such disability on the assessee.

(7) The assessee having himself made the return and produced the document, should be held entitled to inspect and/or take copies of the same. In

paragraph 85 of the notes and instructions compiled by the Income Tax department for the guidance of its officers, it is stated that the following

persons shall, in practice, be allowed to inspect or to receive copies: (1) in any case the person who actually made the return; (2) any partner

(known to be such) in a firm registered or unregistered to whose income the return relates, and (3) the manger of a Hindu undivided family to

whose income the return relates, or any other adult member of the family who has been treated as representing it. In RAMA RAO Vs.

VENKATARAMAYYA., it was held there was nothing in S. 54 to prohibit the practice referred to in the Income Tax Manual.

That practice is the logical outcome of the principle that no matter could be confidential as against the very person who made the statements. What

Sec. 54 prohibits is the revealing of the confidential information, and there would be no revealing, if the party who made the statement is allowed to

inspect the statement or obtain copies thereof. It may be noticed that the cases in which the department is allowed to grant the copies are those in

which the person who applied for inspection or copies is either actually or constructively the party who made such statements.

In a case of partnership or a Hindu undivided family, the person who submits returns or filed statements in support thereof would have done so

only as representing the other partners or members of the family. It stands to reason that those persons on whose behalf the returns or statements

were made should be entitled to inspect or obtain copies thereof; no question of breach of confidence will arise in such cases, and, therefore, there

would be no contravention of the provisions of S. 54.

(8) Neither the rule nor the principle would apply where an assessee dies leaving certain legal representatives, and those legal representatives apply

to inspect or take copies. In (1947) 15 ITR 150 to which we have already referred, the widow of the deceased assessee obtained certified copies

of the statements of her husband recorded during the assessment proceedings, and these were tendered in evidence by the plaintiff in that suit. The

real question that had to be decided was whether those certified copies were admissible in evidence.

While holding that S. 54 of the Indian Income Tax Act did not bar the reception of the evidence, the learned Judges also held that the widow of the

deceased assessee was entitled to obtain the certified copies. In that case Letters of Administration had been granted to the University, the legatee

under the Will of the deceased, but the learned Judges were of the view, that as a representative of the estate of the deceased, his widow was

entitled to obtain the copies. It is not necessary for us to record any concluded opinion of ours on the question, whether the principle laid down in

(1947) 15 ITR 150 is correct.

The facts of the case before us distinguish it from Buchibai''s case, 1947 15 ITR 50: AIR 1946 Nag 377; there is a plurality of legal representatives

in the case before us, and the disputes are inter se those representatives; with those disputes the department has nothing to do, and the certified

copies have not been asked for to settle any dispute between the estate of the deceased assessee and the department. Whether in such

circumstances one of the legal representatives is entitled to obtain certified copies is the question for decision, now, and (1947) 15 ITR 150 is not

authority for answering that question.

(9) The question whether one of several representatives could obtain copies of those documents has, therefore, to be decided on principle. In a

case where a person dies leaving more than one legal representative, the estate would be represented by all of them jointly, and not by one of them

alone. As between co-heirs, it is well settled that one is not the agent of the other. Sec. 24-B of the Indian Income Tax Act makes a legal

representative of a deceased person liable to the tax assessed as payable by the deceased, the liability being however limited to the extent of the

estate left by the deceased.

The word ""legal representative"" in S. 24-B sub-clause (1) would mean all the legal representatives collectively, if there were more than one. The

question of liability to Income Tax where an assessee left more than one legal representative was considered by a Bench of this court (to which one

of us was a party) in E. Alfred Vs. The I Additional Income Tax Officer, . It was held in that case that the liability imposed under S. 24-B (2) of

the Act attached itself to all the legal representatives of the deceased person on whom notices were served, and that all the legal representatives of

the deceased would be liable to be served with the notices under that provision.

Therefore, when there is a plurality of legal representatives, it would, follow that, all of them should concur in applying for the inspection of the

statements made to the Income Tax Officer or for obtaining certified copies of the same from him. But where they do not agree, one of them alone

could not be held to represent the deceased, and, therefore, one of them alone could not have inspection. To recognise such a right might perhaps

defeat the very purpose for which the section was enacted.

Suppose an assessee had a business and had made certain disclosures to the Income Tax authorities which in the hands of a rival would result in a

prejudice to the business. If on the death of the assessee his property vests in a number of his heirs, it should not be open to any one of the heirs to

ruin the business which might fall to the share of another by the simple process of getting copies of the statements made by the assessee and

making them public.

(10) The matter can be viewed on another line of reasoning as well. The right to inspect or to obtain copies is a privilege conferred on the assessee

personally. It cannot be held that such a privilege is a property transferable or heritable on the death of an assessee. In Salmond''s Jurisprudence,

11th Edn. it is observed thus at page 482.

The rights which a dead man thus leaves behind him vest in his representative. They pass to some persons when the dead man or the law on his

behalf has appointed to represent him in the world of the living. The representative bears the persona of the deceased and therefore has vested in

him all the inheritable liabilities of the deceased. Inheritance in some sort is a legal and fictitious continuation of the personality of the dead man, for

the representative is in some sort identified by the law with the person whom he represents.

(11) What, therefore, vests in the legal representative is the heritable right. It cannot be said that a mere privilege to inspect one''s statement or

obtain copies thereof would be a heritable right. Nor can it be held that one of several legal representatives could be considered as one in whom

the personality of the deceased is continued so as to entitle him to obtain copies, which the assessee, had he been alive, would be entitled to.

(12) Yet another contention was urged on behalf of the second respondent. Reliance was placed upon S. 76 of the Indian Evidence Act which

would entitle every person, who has right to inspect a public document, to obtain copies of the same on payment of legal fees therefor. In RAMA

RAO Vs. VENKATARAMAYYA., it was held that an Income Tax return or statement made by an assessee to an Income Tax officer would

constitute a public document within the meaning of S. 74 of the Evidence Act.

It was contended that being a public document, the second respondent would be entitled to the copies under Sec. 76. Section 76 does not specify

as to who the persons entitled to inspect a public document are. But the section allows grant of a certified copy of a public document only to a

person who has right to inspect the document.

(13) It is, therefore, necessary to consider whether the second respondent would be a person entitled to inspect the Income Tax returns made by

the deceased. There is no provision in the Indian Income Tax Act enabling a right of inspection of the Income Tax returns or statements made in

respect thereof. We have already pointed out that rule 85 of the Income Tax Manual relates to an inspection by the person who either actually or

constructively made the return or the statement. It was contended on behalf of the second respondent that, under the common law, the second

respondent, as one of the legal representatives of the deceased would be entitled to inspect the documents.

A reference was made to the decision in R. v. Justices of Staffordshire, (1837) 112 ER 33. That was a case where certain rate-payers applied for

a writ of mandamus against the justices and clerk of the peace of a county to allow them an inspection of certain orders of sessions, concerning the

expenditure of the county rate, evidently with a view to find out whether there had been any illegal expenditure of the rates already collected. Lord

Denman C. J. observed at pages 38 and 39.

It is alleged that these are public documents, and that every one having interest in them has therefore a right to inspect them........ But the difficulty

is to see that the present applicants have such an interest as brings them within the rule. During the arguments, we enquired what interest in the

applicants was relied on as entitling them to the inspection. In answer, it was conceded that the rate-payers had no direct interest in ascertaining the

expenditure of the by-gone rate, because, even if discovered to be illegal, the monies paid by the treasurer could not be recovered from him: and it

is obvious that they could not be recovered from the parties to whom they had been paid, nor from the individual justices who had sanctioned the

payment....

The utmost, therefore, that can be said on the ground of interest, is that the applicants have a rational curiosity to gratify by this inspection, or that

they may thereby ascertain facts useful to them in advancing some ulterior measurers in contemplation as to regulating county expenditure but this is

merely an interest in obtaining information on the general subject, and would furnish an equally good reason for permitting inspection of the records

of any other county; there is not that direct and tangible interest, which is necessary to bring them within the rule on which the Court acts in granting

inspection of public documents.

(14) In Mutter v. Eastern and Midlands Rly. Co., (1888) 38 Ch. D. 92 inspection of a company''s register was applied for by a share-holder who,

it was proved, was serving interests of a rival company. The statute provided that a share-holder would have a right to inspect. It was held that the

fact that the share-holder was serving the interests of the rival company would not disentitle him to the assistance of the Court in enforcing the

statutory right. At p. 106 Lindley L. J. observed:

When the right to inspect and take a copy is expressly conferred by statute the limit of the right depends on the true construction of the statute.

When the right to inspect and take a copy is not expressly conferred the extent of such right depends on the interest which the applicant has in

what he wants to copy, and on what is reasonably necessary for the protection of such interest.

It follows therefore that before a person could claim to inspect a public document, he should possess a direct and tangible interest in that

document. An interest in some other matter which would be better served by the inspection of the document would not be sufficient. In other

words, an inspection of the public document for the reason that the person would be able to advance his other interests would not be sufficient to

constitute an interest in the document. For instance, a creditor of the assessee who may be anxious to secure his own interest or to realise his

decree may like to get information about an assessee''s business.

It cannot be disputed that he would have no right to inspect the Income Tax papers of the assessee, though in one sense he would have an interest

in securing the information. Such an interest would be held to be neither direct and tangible nor one in the documents. The second respondent has,

no doubt, interest to secure a proper distribution of the properties of the deceased. That would not constitute a direct and substantial interest in the

Income Tax assessment and the statements. Such interests would exist only for instance, if the second respondent were liable to pay the tax or

become entitled to any refund payable to the legal representatives of the deceased.

We have referred to the provisions of S. 24-B sub-cl. (1) which makes all the legal representatives of a deceased assessee liable for the tax

payable by him. Section 24-B sub-cl. (2) enables the Income Tax Officer to serve notices on the legal representatives of a deceased, in case he

has died without submitting his returns, and proceed to assess the legal representatives. In such a case, if there are more than one legal

representative, notices should be served on all of them. In the present case, no proceedings were initiated by the Income Tax Officer against the

legal representative for the assessment years 1951-52 to 1955-56.

The returns were made by the deceased, and the taxes that were assessed had been paid by him, and there are no arrears to be paid. It is not a

case where the assessments are to be disputed or any appeal has to be failed filed against the orders of assessments in respect of those years; they

have become final. Under those circumstances, it cannot be held that the second respondent had an interest in the income returns or statements

made by the deceased for the assessment years 1951-52 to 1955-56.

(15) For the assessment years 1956-57 and 1957-58, the petitioner voluntarily submitted returns. It may be that she was entitled to do so under S.

26(2) of the Indian Income Tax Act. But the fact is that the return was filed by her, not as representing the estate of the deceased, but in her own

right, claiming as the sole proprietrix of the business. Such returns being filed by the petitioner herself, it would not be open to the second

respondent to have either inspection or obtain copies of the same. That apart, the returns have culminated in assessments and the taxes as assessed

paid long prior to the date on which the second respondent filed the application for the copies.

(16) It was contended on behalf of the second respondent that in the partition suit the petitioner might claim contribution or credit for the taxes paid

by her as against the other legal representatives and she would be entitled to know the amount of the tax levied, and she should therefore be held

to have an interest in the Income Tax papers. It is difficult to appreciate how the second respondent could be held to have an interest in the Income

Tax returns etc. If the petitioner wants to obtain contribution or to take credit for payment of Income Tax made by her, she would have to show

first how much tax was paid. Anyway, such an interest is only problematical and not either direct or tangible. The second respondent would not,

therefore, be entitled to the certified copies of the returns or the assessment orders thereon.

(17) A writ of mandamus will, therefore, be issued to the third Additional Income Tax Officer, Salem, directing him to conform to the provisions of

S. 54 of the Indian Income Tax Act, and not to grant copies of the returns filed by the late G. V. Rangaswami Naidu and of the assessment orders

for the years 1951-52 to 1956-57 to the second respondent.

(18) Rule Nisi is made absolute. In the circumstances of the case, there will be no order as to costs.

(19) Application allowed.