The Right to Information Act, 2005 (RTI Act), a landmark legislation, provides Indian citizens a platform to access information, ordinarily under the control of governmental authorities at the federal, state and local body level. Questions have been raised regarding the confidentiality of information in relation to an individuals or corporate tax affairs.
Power to obtain tax information: The liberty to obtain any classified information is of wide amplitude, particularly in the context of information on taxes. The Act can throw open a Pandoras Box by making personal and corporate tax information available to (disgruntled) citizens.
The old income-tax law of 22 afforded protection against disclosure of information and the present Act of 61 had matching provisions. The secrecy provisions were omitted in 64 and new provisions were brought in to empower a chief commissioner or commissioner to disclose information regarding tax matters of an assessee to a third person, on request, if it is in public interest.
Checks and balances: Undoubtedly, tax returns contain personal and privileged information. Though the tax return disclosure is voluntarily, additional information is made available to the revenue department at their request. The revenue department, in a way, assumes and acts in a fiduciary capacity insofar as tax payers are concerned and hence, besides secrecy and confidentiality under the income-tax law, tax payers are protected under the general law. The revenue officers, while passing assessment orders, exercise quasi judicial authority and orders passed cannot be summoned by Parliament under the rules of procedure of Parliament. The RTI Act overrides the income tax law, which contains restrictive provisions limiting its application in case of certain classes of information.
Exceptions include : Commercial trade secrets harmful to the competitive position of a third party; Information obtained in a fiduciary relationship; Personal information, which has no relationship to public interest, that can cause invasion of privacy.
It is important to note that the exercise of judgment that personal information shall or shall not cause invasion of privacy is left to the discretion of the authorities. Though the decision of the authorities can be appealed against, damage could have been caused as a result of disclosure of privileged information.
Experience thus far: In a specific case, details of immovable property returns were sought and the commission held that it was personal information, the disclosure of which might cause unwarranted invasion of privacy of the officer. In another case, the PAN and TAN numbers were asked and the commission held that the information was confidential and the appellant could not make out a bona fide case for public interest for disclosure of such information.
In striking contrast to the earlier decisions, in a ruling sought by Ms Farida Hoosenally, the applicant asked for details of income-tax returns of a firm and copies of assessment orders. The officer held that the documents sought contained third party information and consent for such disclosure was not obtained. Further, since there is no public action involved, such information is personal and therefore, cannot be disclosed. However, the commission, favouring the applicant, held that in the spirit of the RTI Act, a public authority is required to adopt an open and transparent process of evaluation of norms and procedures for assessment of tax. Hence, the applicant was entitled to access copies of tax assessment orders. Ordinarily, income-tax proceedings until the appellate tribunal level is confidential, and hence the trend is worrying!
Fundamental rights and public interest: The fundamental right of privacy as a part of personal liberty is enshrined in Article 21 of the Constitution of India. A citizen has the right to safeguard the privacy of his or her personal information. The Supreme Court has held in Kharak Singhs case that right to privacy is a part of right to protection and personal liberty guaranteed under the Constitution.
Public interest means general interest of the community as opposed to particular interest of an individual. Public interest shall outweigh the harm to protected interests of a person, where interest of the community or a considerably large number of persons is involved. The Supreme Court in SP Guptas case spelt out the importance of disclosure of secret information in public interest, by observing that disclosure of information in regard to the functioning of the government must be the rule, and secrecy, an exception justified only where the strictest requirement of public interest so demands
The Global scenario: In Australia, the federal Freedom of Information Act provides access to documents held by Commonwealth agencies. The exceptions to the general rule are documents relating to national security, defense or relations between states, deliberations of the Cabinet internal working, law enforcement and public safety, personal privacy etc.
The US has a better tradition for open government than most countries. The US Constitution does not contain any specific provision for accessing administrative documents but such a right has been conferred by statutes. Further, only persons properly and directly concerned are entitled to procure public records. There is no provision for judicial review. Exempted documents include personnel and medical files, documents exempted from disclosure by statute, trade secrets, commercial or financial information, etc. An American citizen has the legal right to access more information, which otherwise may be a criminal offence to disclose in common wealth nations such as England or India.
The RTI Act, though a step in the right direction, needs fine tuning: It is a well settled principle of law that information imparted in confidence shall be protected. The courts will restrain the use of it, if it is a breach of good faith. It depends on the broader principles of equity that he who has received information in confidence shall not take unfair advantage and must not use it to prejudice without obtaining consent.
On the other hand, privacy cannot be the right to withhold all information regarding ones self from all institutions at all times. However, does the mere fact that citizens have parted with their income and private wealth information permit the revenue department to disclose such privileged information to third parties? The answer must necessarily be in the negative.
Liberty is neither a limited nor a quantifiable right and shows up in the entire gamut of the legal spectrum.
A word of caution to the revenue department, as administrators of law, would be rationale reasoning for such actions. The most impelling consideration for insistence upon disclosure of reasons in support of an order or decision is that it ensures proper application of mind, reduces the possibility of casualness, minimises whim and caprice and thereby serves to provide legal protection against arbitrary conduct.
According to a recent directive by the state information commissioner of Karnataka, details of assets and liabilities of government servants could be disclosed under the RTI Act. It just leaves one to wonder if this directive will also meet the same fate. The RTI Act is definitely a step forward towards modern democracy but needs greater clarity and articulation to meet its intended objectives and protect citizens right of privacy.
(Views expressed herein are personal views of the author)