http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: CHARU CHANDRA KUNDU

       Vs.

RESPONDENT: GURUPADA GHOSH

DATE OF JUDGMENT: 05/05/1961

BENCH: SHAH, J.C. BENCH: SHAH, J.C. DAS, S.K. HIDAYATULLAH, M.

CITATION:  1962 AIR 1119            1962 SCR  (2) 833  CITATOR INFO :  R          1962 SC1121  (6)  RF         1971 SC 671  (6)

ACT: Production     of    document-Assessment     proceedings-Law prohibiting    income-tax   authorities   from    disclosure Production    of   proceedings   into    court--Waiver    by assessee--Indian Income-tax Act, 6122 (11 of 1922). s. 54.

HEADNOTE: In  a suit instituted by the respondent for the recovery  of monies which he alleged were due to him from the  appellant, the  latter pleaded that the liability had been  discharged. In  support of that plea the appellant sought to  tender  in evidence  a  statement which he said had been  made  by  the respondent   before  the  Income-tax  Officer   in   certain proceedings relating to the assessment of Income-tax of  the appellant  for  the  year 1949-50.   For  this  purpose  the appellant  applied  to  the trial  court  praying  that  the Commissioner of Income-tax might be asked to arrange for the production  before the court of the record of the  statement made  by  the  respondent.   On  objection  raised  by   the Commissioner of Income-tax, the court held that he could not be  required  to  produce  the statement,  in  view  of  the prohibitions  imposed by s. 54 of the Indian Incometax  Act, 1922.    The  appellant  contended  that   the   prohibition contained  in s. 54 of the Act related only to the  evidence given  by  an  assessee himself and not  to  that  of  other witnesses,  and that, in any event, the provisions  in  that section  being in the interest of and for the protection  of the assessee only, if the assessee waived the privilege, the prohibition contained therein would be inoperative. Held,  that the prohibition imposed in s. 54 of  the  Indian Income-tax  Act, 1922, is absolute and the operation of  the section is not obliterated by any waiver by the assessee  in whose  assessment the evidence was tendered,  document  pro- duced or record,prepared.

JUDGMENT:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 206 of 1959. Appeal  by special leave from the judgment and  order  dated May 28, 1456, of the Calcutta High Court, in Civil Rule  No. 3317 of 1955. N.  C. Chatterjee, A. K. Dutta and P.K. Chatterjee, for  the appellant. 834 The respondent, did not appear. 1961.  May 5. Judgment of the, Court was delivered by SHAH, J.-Gurupada Ghosh respondent to this appeal filed suit No. 41 of 1953 in the 6th court of the Subordinate Judge  at Alipore,  District  24 Parganas" West Bengal,  for  a  money decree  against  the appellant-Charu Chandra  Kundu-for  Rs. 32,132-12-3  claiming that he had advanced to  appellant  on May  11, 1949, "by way of temporary accommodation loan"  Rs. 30,000/-  by  a cheque drawn upon the  Comilla  Union  Bank, Calcutta,  and  that the appellant had  in  two  instalments repaid  Rs.  5,500/-  out of the  amount  advanced  and  the balance  of  Rs.  24,500/- with interest  remained  due  and payable  by  the appellant.  The appellant  pleaded  by  his written  statement that a loan of Rs. 30,000/- was  advanced by  the  respondent to him and his wife  Chapalabala  and  a promissory note was in consideration thereof executed by the borrowers  in  favour of the respondent  and  as  collateral security  for  the loan, title deeds  of  certain  immovable properties belonging to the said Chapalabala were  deposited with the respondent and that thereafter between September 7, 1949,  and  April  13, 1953, the  appellant  had  repaid  an aggregate  amount of Rs. 37,000/- and the respondent  having relinquished a sum of Rs. 235-7-0 on account of interest  on such repayment the debt was discharged and in acknowledgment thereof,  the  promissory note and the title  deeds  of  the immovable  properties  lodged  with  the  respondent   were, returned.   The appellant also raised other pleas which  are not  material  for  the purposes of  this  appeal.   On  the pleadings,  the  burden of proving repayment  lay  upon  the appellant. The appellant applied to the Subordinate Judge for the issue of  a  summons to the Commissioner of  Income-tax  directing that  officer  to arrange to produce  "through  a  competent officer                     835 the original file and depositions given "by the  respondent" before  the Income-tax Officer I Division in the  assessment of Charu Chandra Kundu." The Commissioner of Income-tax  in- formed  the  court that having regard  to  the  prohibitions imposed  by  s. 54 of the Income-tax Act, he was  unable  to produce any of the statements, returns, accounts,  documents or  records of assessment proceedings under  the  Income-tax Act  or to give evidence in support thereof.  The  appellant then  applied  that  the objection of  the  Commissioner  of Income-tax  be over-ruled and that the Incometax Officer  or any  other  competent  officer be directed  to  produce  the statement  made by the respondent and recorded  on  February 22, 1950, in the proceedings for assessment of the income of the  appellant.   In  that petition, by  paragraph  10,  the appellant submitted that "on a true construction of s. 54 of the Indian Income-tax Act, the exemption from disclosure and production  relate only to the evidence or  deposition  etc. made  by  an  assessee himself and  not  to  depositions  or evidence  of other witnesses.  In any event, the  disclosure and  production etc. prohibited by s. 54 of  the  income-tax Act being in the interest of the assessee only, the assessee himself  can waive this  special protection  and  privilege" and  that the appellant waived his right to  the  protection

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

and privilege ’under s. 54 of the Income-tax Act.  It   was  the  case  of  the  appellant  that  in   certain proceedings  relating  to  assessment of  incometax  of  the appellant  for  the  year 1949-50,  the  respondent  had  on February  22, 1950, made a statement before  the  Income-tax Officer,  and to support his defence in the suit he  desired that the statement be produced before the court.  The  trial court  upheld  the objection raised by the  Commissioner  of Income-tax  that in view of s. 54, he could not be  required to produce the statement he was summoned to produce, and the High  Court  of Judicature at Calcutta in  exercise  of  its jurisdiction 836 under  a. 115 of the Code of Civil Procedure confirmed  that view. Section 54 of the Income-tax Act by the   first  sub-section declares  all particulars contained in any  statement  made, return furnished or accounts or documents produced under the provisions  of the Income-tax Act or in any evidence  given, or  affidavit  or  deposition made, in  the  course  of  any proceedings  of any assessment proceedings under Ch.   VIII, or  in  any  record of any  assessment  proceedings  or  any proceeding relating to the recovery of a demand prepared for the  purposes of the Act, shall be treated as  confidential. The sub-section then proceeds to state that  notwithstanding anything  contained  in the Indian Evidence  Act,  1872,  no court  shall  save as provided in the 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.   By  sub-s. (2), a public servant  disclosing  any particular contained in any such document, return, accounts, documents,  evidence,  affidavit, deposition  or  record  is liable to be punished with  imprisonment which may extend to six months and also with fine.  These provisions however  do not apply to certain documents specified in cls. (a) to  (p) of sub-s.3. It  is  manifest  that disclosure of  information  given  to public servants in the course of incometax proceedings ha  a by  a comprehensive provision been prohibited.  The  Income- tax  authorities are directed by the provision to treat  the information   disclosed,  evidence  given,   and   documents produced  as confidential : the courts are  prohibited  from requiring any public servant to produce the documents or the records  and even to give evidence in respect  thereof,  and the.  public  servants  disclosing the  particulars  of  the evidence, documents or record are penalised.  The  statement alleged to be made by the respondent in the assessment                     837 proceedings  is not of the nature described in subs. (3)  of s.  54,  and is therefore not exempt from the  operation  of sub-ss.  (1)  and (2).  There- being  an  express  interdict against the court requiring production of the document,  the Subordinate  Judge was right in declining to accede  to  the request of the appellant. Mr. Chatterjee appearing on behalf of the appellant contends that  s.  54  is  enacted only for  the  protection  of  the assesses,, and if the assessee waives the privilege  enacted for  his protection, the prohibition contained therein  will be inoperative.  But there is no such exception, express  or implied, in the language used by the legislature.  The  pro- hibition  imposed against, the court by s. 54 is absolute  : its  operation  is  not obliterated by  any  waiver  by  the assessee  in  whose  assessment the  evidence  is  tendered, document produced or record prepared.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

Mr.  Chatterjee relied upon Buchibai  v..Nyagpur  University (1)  in  support  of  his contention  that  an  assessee  is entitled  to  waive the privilege which  confers  protection upon him by s. 54.  In that case, however, the only question which fell to- be determined was whether certified copies of statements  recorded  or  orders passed  by  the  Income-tax authorities  were admissible in evidence under s. 65 of  the Evidence Act to prove the contents of those documents.   The court in that case observed :  "The  direction that such document (documents described  in s.  54) shall be treated as confidential is a  direction  to officials of the Income-tax Department and in our opinion it is  open  to  an assessee to waive that right  and  to  give evidence, if he desires, or particulars contained in such  a record,  as  was  held, in Rama  Rao  v.  Venkataramayya(2). There is nothing in. s. 54 which prohibits the giving (1) (1947) 15 I.T.R. 150. (2) I.L.R, (1940) Mad. 996. 838 of  such evidence; the section merely directs  officials  of the  Income-tax  Department  to  treat  such  documents   as confidential  and prohibits the Court from requiring  public servants  to  produce such, documents or  to  give  evidence about such documents." But the question whether a certified copy. of the  statement made  by  the respondent before the  Income-tax  Officer  is admissible  does not fall to be determined in  this  appeal. The  Subordinate Judge expressly recorded in the  proceeding dated November 18, 1955, that he did "not mean to say  that, certified  copy  of the document will not be  admissible  in evidence  at the time of the trial of the suit if  the  said certified  copy  is  otherwise found  to  be  admissible  in evidence."  Buchibai’s  case  (1) is a  decision  About  the admissibility  of a certified copy of the statement made  by one Laxminarayan to the Assistant Commissioner of Income-tax it  did not decide that the court could require,  production by  summons of the original statements from the  records  of the Assistant Commissioner. A  similar view as to admissibility of certified  copies  of statements made before the Income-tax authorities was   also expressed  in Rama Rao v. Venkataramaya (2) Suraj Narain  v. Seth  Jhabhu  Lal and Others (1) and Banarsi Devi  v.  Janki Devi(4).   We  may observe that we are not  called  upon  to express any opinion on the correctness or otherwise of these decisions.  Suffice it to say that they have no  application to the question to be determined in this appeal. The appeal fails and is dismissed. Appeal dismissed. (1) (1947) 15 I. T. R. 130.  (2) I.T.R. (1940) Mad. 969. (3) (1945) 13 I.T.R. 13.  (4) A.I.R. 1959 Pat. 172.                     839