The Hindu Business Line : Information request in public interest

SECTION 138, vide sub-section (1) clause (b), authorises the Chief Commissioner or Commissioner of Income-Tax to furnish to a person information relating to a taxpayer, which an income-tax authority has obtained in the performance of his functions under the I-T Act, if he makes an application in the prescribed form and the CC/CIT is satisfied "that it is in the public interest" to furnish or cause to be furnished the information asked for and that the CC/CIT decision in this behalf shall be final and not questioned in any court of law.

The CC/CIT decision in this matter is, thus, final and cannot be questioned in any court of law unless the same appears to be arbitrary and, prima facie, not backed by any reasons. This power has to be exercised keeping in view `public interest'.

Thus, the concept of `public interest' becomes paramount and the decision on this matter has to be arrived at not in a subjective and narrow way, but taking a broad view.

The issue involved can be understood better through the following hypothetical case: `A' is married to B.

Before marriage, B's parents did not disclose that B is mentally challenged, which fact came to the knowledge of A on the day when B came to A's place after marriage. `A' refused to accept B as his wife and sent her back to her parents' place and initiated proceedings for divorce.

B's parents are well off and have only two daughters. `A' is not financially well placed and works on a moderate salary in an establishment.

In the course of divorce proceedings, B's parents have made a claim for maintenance, which works out to nearly 40 per cent of A's gross salary, plus costs for divorce proceedings. `A' wants to establish, through the I-T Department's records of B's father, that considering the sound financial position of B's father, the demand for maintenance and cost of defending divorce proceedings is unjustified and highly inflated.

For getting information about the income and assets of B's father, A filed an application before the jurisdictional Chief Commissioner in Form No 46 of the I-T Rules, 1962.

The CC refused to accept the application on the ground that it would not be in public interest to furnish the information.

The limited issue being examined is whether the refusal to give the information on public interest grounds is correct.

The term `public' has not been defined in the I-T Act.

However, the court decisions over the years have established that the term `public' does not mean the whole body of the citizens of a state, nation or municipality, but can mean in particular situations, a part of the inhabitants of a place, community or nation.

Public interest is something in which the public or community, at large, has some interest pecuniary or of any other nature, by which, legal, social or financial rights or interests shared by citizens generally are affected.

The circumstances, which clothe a particular kind of position with public interest, have to be such as to create a peculiar kind of circumstance between the public and those engaged in it, and should raise implications of an affirmative obligation on their part to be reasonable in dealing with public.

In the context of Section 47 of the Motor Vehicles Act, 1939, public interest has been said to mean the interest of the public which uses the stage carriage, and not the public in general (AIR 1956 All 594). A subject may become one of public interest if public or a section of the public becomes interested in it.

Public interest/purpose can include any purpose in which even a fraction of the community may be interested or by which it may be benefited (1963 SC 151).

A problem raised by an individual does not become of private interest because it is raised by one person.

An issue raised by one person, too, can be of public interest. A public interest litigation (PIL) can be initiated even by a single person.

The situation under consideration, though emanating from the facts peculiar to the individual `A', poses the broader question whether a person by deceit or non-disclosure of primary facts, which makes a person to take a decision (of marriage in the case mentioned), should be allowed to be in advantageous position and get protection from law also for his misdemeanours.

It may serve wider public interest to deter those who, even in spite of being well placed, wish to take advantage of the legal veil available under Section 138(1)(b) on the pretext of public interest.

If such persons know that information about their financial status can be obtained by making applications under Section 138(1)(b) by persons against whom process of law is being abused by making highly inflated claims, they would be discouraged to do so, and by this process, wider public interest would be served by disclosing the information, treating it to be in public interest.

Section 137(1) of the I-T Act, 1961 (operative up to March 31, 1964) was almost identical to Section 54(1) of I-T Act, 1922 and made information in the I-T records of a taxpayer absolutely confidential, prohibiting a public servant from producing documents forming part of the assessment proceedings even to courts, which could not summon such records from the I-T authorities.

The position widely changed after the enactment of Section 138.

Various amendments were made to the secrecy provisions of Section 137, including facility of exchange of information with other tax and enforcement authorities.

Thus, the old concept changed substantially for better fiscal management and there is need to give a broader interpretation of the concept of public interest in the changed situation of law, with Section 137 becoming non-operative.

With a new jurisprudence fast developing following the popularity of PIL, which has been evolved by the courts, clinging to the narrow concept of `public interest' in the context of Section 138(1)(b) seems outmoded.

When the frontiers of public law (as observed by the Supreme Court in S. P. Gupta vs President, 1982 SC 149-95) are expanding, the view that giving of information to `A' about the income of B's father as asked under Section 138(1)(b) would not be in public interest seems to be archaic.

Public interest, prima facie, would be better served by disclosing the information asked for, as it would discourage taking advantage of one's own wrongful acts.

The Central Board of Direct Taxes (CBDT) needs to get the legal position examined in the context of the hypothetical case discussed, and issue guidelines as to how the concept of public interest mentioned in Section 138(1)(D) should be interpreted in the context of disclosure of information concerning taxpayers.

(The author is a former chairman of CBDT.)

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