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From the Courts »
  Vatsala Shenoy vs. JCIT (Supreme Court)
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 ITO vs. Vikram A. Pradhan (ITAT Mumbai)

CPIO CUM ASSISTANT COMMISSIONER OF INCOME TAX Vs. RAKESH KUMAR GUPTA
December, 02nd 2014
            THE HIGH COURT OF DELHI AT NEW DELHI
%                                                Judgment delivered on: 24.11.2014
+        W.P.(C) 85/2010 & CM Nos.156/2010 & 5560/2011
         NARESH TREHAN                                                   ..... Petitioner
                                     versus
         RAKESH KUMAR GUPTA                                              ..... Respondent
                                                   AND
+        W.P.(C) 251/2010 & CM No.526/2010
         AAA PORTFOLIO PVT LTD AND ANR.                                  ..... Petitioners
                                     versus
         RAKESH KUMAR GUPTA                                              ..... Respondent
                                                   AND
+        W.P.(C) 206/2010 & CM No.392/2010
         ESCORTS LTD                                                     ..... Petitioner
                                     versus
         RAKESH KUMAR GUPTA                                              ..... Respondent
                                                   AND
+        W.P.(C) 214/2010 & CM No.445/2010
         CPIO CUM ASSISTANT COMMISSIONER
         OF INCOME TAX                                                   ..... Petitioner
                                     versus
         RAKESH KUMAR GUPTA                                              ..... Respondent
                                                   AND
+        W.P.(C) 202/2010 & 389/2010
         ESCORTS HEART INSTITUTE AND
         RESEARCH CENTRE                                                 ..... Petitioner



W.P.(C) Nos. 85/2010 & other connected matters                                  Page 1 of 29
                                     versus
         RAKESH KUMAR GUPTA                               ..... Respondent
                                                 AND
+        W.P.(C) 207/2010 & CM No.394/2010
         RAJAN NANDA                                      ..... Petitioner
                                     versus
         RAKESH KUMAR GUPTA                               ..... Respondent
Advocates who appeared in this case:
For the Petitioners   : Mr Rajiv Nayar, Sr. Advocate with Ms Shyel
                       Trehan and Ms Manjira Dasgupta in W.P.(C)
                       85/2010.
                       Mr Sandeep Sethi, Sr. Advocate with Mr Simran
                       Mehta and Mr Prabhat Kalia in W.P.(C) Nos.
                       251/2010, 206/2010 & 207/2010.
                       Mr Rohit Puri in W.P.(C) 202/2010.
For the Respondent   : In person.

CORAM:-
HON'BLE MR JUSTICE VIBHU BAKHRU

                                            JUDGMENT

VIBHU BAKHRU, J

1.       These petitions are filed inter alia impugning a common order dated
14.12.2009 passed by the Central Information Commission (hereafter
`CIC') directing the Public Information Officers, Commissioner of Income-
tax (hereafter `PIO') to provide inspection of the records and also other
information sought for by the respondent relating to the income tax returns
filed by the petitioners (other than the petitioner in W.P.(C) No.214 of
2010).




W.P.(C) Nos. 85/2010 & other connected matters                   Page 2 of 29
2.       Brief facts which are relevant for examining the controversy in the
present petitions are that on 13.01.2009, Rakesh Kumar Gupta ­
respondent, who is stated to be an informer to the income tax department,
filed an application under the Right to Information Act, 2005 (hereafter the
`Act') with the PIO inter alia seeking information and all the records
available with the Income tax department in respect of nine assessees (out
of the said assesses one assessee was deleted due to repetition) for various
assessment years. The respondent had also sought:-

         "1. Inspection of all records in above respect.

         2. Kindly provide the copies of the documents mentioned at
         the time of inspection.

         3. Kindly provide the officers (from assessing officers to
         CCIT), who are the officers to take action on "Tax Evasion
         Petition" given by me from 1/8/2003 till date.

         Request
         4      If you want to treat the above information as third
         party information and want to send the notice to so called
         third parties inviting their objection, then kindly send the
         complete request to them including all the annexure e.g.
         citing public interest by me due to which information should
         be given to me ."

3.        The details sought by the respondent of the eight assessees
(hereinafter collectively referred to as `assessees') including the details of
the assessment years are as under:-

  i)     Dr. Naresh Trehan - petitioner in W.P.(C) No.85/2010 pertaining to
         Assessment Year 1998-99 to 2005-06




W.P.(C) Nos. 85/2010 & other connected matters                   Page 3 of 29
  ii)    Mr. Rajan Nanda - petitioner in W.P.(C) No.207/2010 pertaining to
         Assessment Year 1998-99 to 2005-06

  iii) AAA Portfolio Pvt. Ltd. ­ petitioner in W.P.(C) No.251/2010
         pertaining to Assessment Year 1998-99 to 2005-2006

  iv) Big Apple Clothing Pvt. Ltd. ­ petitioner in W.P.(C) No.251/2010
         pertaining to Assessment Year 1998-99 to 2005-06

  v)     Escorts Ltd. - petitioner in W.P.(C) No.206/2010 pertaining to
         Assessment Year 1998-99 to 2005-06.

  vi) Escorts Heart Institute & Research Centre Ltd. (Delhi) - petitioner in
         W.P.(C) No.202/2010 pertaining to Assessment Year 1998-99 to
         2001-02.

  vii) Escorts Heart Institute & Research Centre Chandigarh (Society)
         pertaining to Assessment Year (2001-2002)

  viii) Escorts Heart Institute & Research Centre Limited, Chandigarh
         pertaining to Assessment Year 2000-01 to 2005-06.

4.       Since the information sought by the respondent is third party
information, the Deputy Commissioner of Income-tax issued separate
notices dated 04.02.2009 under Section 11(2) of the Act to the assessees.
The assessees submitted their separate objections and objected to the
inspection and furnishing of the information. PIO considered the objections
of the assessees and rejected the RTI application of the respondent, by its
common order dated 16.02.2009, on the ground that the respondent has
failed to substantiate the public interest involved in disclosing the




W.P.(C) Nos. 85/2010 & other connected matters                  Page 4 of 29
information relating to third parties. PIO, however, held that the Tax
Evasion Petition is under compilation and would be provided in due course.

5.       The respondent preferred separate appeals before the First Appellate
Authority - Addl. Commissioner of Income-tax (hereafter the `FAA')
against the order of PIO. By a common order dated 08.05.2009, FAA
rejected the appeal of the respondent. Aggrieved by the order dated
08.05.2009 of FAA, the respondent preferred an appeal before the CIC. By
the impugned order dated 14.12.2009, the CIC allowed the appeal and
directed PIO to provide inspection of the records and also other information
sought for by the respondent.

6.        The learned counsel for the petitioner contended:-

6.1      that the information sought for by the respondent such as income tax
returns are personal information and are exempt from disclosure under
Section 8(1)(j) of the Act. Reliance was placed on decision of Supreme
Court in Girish Ramchandra Deshpande v. Central Information Commr.:
(2013) 1 SCC 212, decision of Full Bench of this Court in Secretary
General, Supreme Court of India v. Subhash Chandra Agarwal & Anr.:
166 (2010) DLT 305 and decision of Full Bench of the CIC in G R Rawal
v. Director General of Income Tax (Investigation): Appeal No.
CIC/AT/A/2007/00490, decided on 05.03.2008.

6.2      that the disclosure of the income tax returns is prohibited under
Section 138 of the Income Tax Act, 1961 and can be made only if the
Commissioner is satisfied that the disclosure is in public interest, which in
the present case was rejected by the Commissioner. Reference was made to



W.P.(C) Nos. 85/2010 & other connected matters                   Page 5 of 29
Hanuman Pershadganeriwala v. The Director of Inspection, Income Tax,
New Delhi: (1974) 10 DLT 96.

6.3      that the disclosure of information is also exempted under Section
8(1)(e) of the Act as the income tax department is holding the information
of the assessees in fiduciary capacity.

6.4      that the respondent has failed to disclose the public interest which is
a mandatory requirement under Section 11 of the Act for disclosure of
confidential and personal third party information.

6.5      that the disclosure of the information sought for would be violative
of the right to privacy, which has been read into Article 21 of the
Constitution of India. Reference was made to paragraph 110 to 112 of the
decision of this court in Secretary General, Supreme Court of India v.
Subhash Chandra Agarwal & Anr.: 166 (2010) DLT 305.

6.6      that the disclosure of income tax returns is expressly forbidden to be
published by a tribunal, in the present case and the CIC               therefore,
exempted under Section 8(1)(b) of the Act.

7.       The respondent contended:-

7.1      that he is an informer with the income tax department and sought the
information in public interest in order to recover the tax evaded by the
petitioners, to recover the properties mis-appropriated by the petitioners and
to curb corruption and therefore, the exemptions provided under Section
8(1)(e) and (j) of the Act are not applicable.




W.P.(C) Nos. 85/2010 & other connected matters                      Page 6 of 29
7.2      that the bank details and tax details should be given to public, where
prima facie wrong doing is detected by the government. Reliance was
placed on Ram Jethmalani & Ors. v. Union of India: (2011) 8 SCC 1.

7.3      that the activities performed by the income tax department are public
in nature and the income tax records are public documents. Reliance was
placed on Bhagat Singh v. Chief Information Commissioner and Ors.:
146 (2008) DLT 385.




7.4      that the disclosure of information under Section 3 of the Act is the
rule and exemption under Section 8 of the Act is the exception.

8.       The controversy that needs to be addressed is whether income tax
returns and the information provided to the income tax authorities during
the course of assessment and proceedings thereafter, are exempt under the
provision Section 8(1) of the Act and further whether in the given
circumstances of this case, the CIC was correct in holding that such
information was required to be disclosed in public interest.

9.       By virtue of Section 3 of the Act all citizens have a right to
information subject to provisions of the Act. The expression "information"
is defined under Section 2(f) of the Act as under:-

         "2(f) "information" means any material in any form, including
         records, documents, memos, e-mails, opinions, advices, press
         releases, circulars, orders, logbooks, contracts, reports, papers,
         samples, models, data material held in any electronic form and
         information relating to any private body which can be accessed
         by a public authority under any other law for the time being in
         force;"




W.P.(C) Nos. 85/2010 & other connected matters                      Page 7 of 29
                                                        (emphasis provided)

10.      It is also relevant to note that by virtue of Section 22 of the Act, the
provisions of the Act have an overriding effect over any other inconsistent
law or instrument.

11.      The petitioners have contended that the income tax returns and other
information provided by the assessees during the course of assessment
would be exempt from disclosure by virtue of section 8(1)(d), Section
8(1)(e) and 8(1)(j) of the Act. It is thus necessary to examine the
applicability of each of the above provisions with respect to the information
sought by the respondent.

12.      Section 8(1)(d) of the Act expressly provides an exemption in respect
of such information. At this stage, it is necessary to refer to Section 8(1)(d)
of the Act which reads as under:-

         "8. Exemption from disclosure of information.-- (1)
         Notwithstanding anything contained in this Act, there shall be
         no obligation to give any citizen,--

         xxxx              xxxx                  xxxx   xxxx       xxxx

         (d) information including commercial confidence, trade secrets
             or intellectual property, the disclosure of which would harm
             the competitive position of a third party, unless the
             competent authority is satisfied that larger public interest
             warrants the disclosure of such information;

13.      Certain petitioners had specifically pleaded that information provided
in the income tax returns could not be disclosed as the information was
provided in confidence. The CIC rejected the same by holding that the
parties had failed to explain as to how that ground could apply or how


W.P.(C) Nos. 85/2010 & other connected matters                            Page 8 of 29
disclosure of information relating to commercial confidence would harm
their competitive interest.

14.      The income tax returns filed by an assessee and further information
that is provided during the assessment proceedings may also include
confidential information relating to the business or the affairs of an
assessee. An assessee is expected to truly and fairly disclose particulars
relevant for the purposes of assessment of income tax. The nature of the
disclosure required is not limited only to information that has been placed
by an assessee in public domain but would also include information which
an assessee may consider confidential. As a matter of illustration, one may
consider a case of a manufacturer who manufactures and deals in multiple
products for supplies to different agencies.     In the normal course, an
Assessing Officer would require an assessee to disclose profit margins on
sales of such products. Such information would clearly disclose the pricing
policy of the assessee and public disclosure of this information may clearly
jeopardise the bargaining power available to the assessee since the data as
to costs would be available to all agencies dealing with the assessee. It is,
thus, essential that information relating to business affairs, which is
considered to be confidential by an assessee must remain so, unless it is
necessary in larger public interest to disclose the same. If the nature of
information is such that disclosure of which may have the propensity of
harming one's competitive interests, it would not be necessary to
specifically show as to how disclosure of such information would, in fact,
harm the competitive interest of a third party. In order to test the
applicability of Section 8(1)(d) of the Act it is necessary to first and




W.P.(C) Nos. 85/2010 & other connected matters                   Page 9 of 29
foremost determine the nature of information and if the nature of
information is confidential information relating to the affairs of a private
entity that is not obliged to be placed in public domain, then it is necessary
to consider whether its disclosure can possibly have an adverse effect on
third parties.

15.      Insofar as the applicability of Section 8(1)(e) of the Act is concerned,
I am unable to accept the contention that a fiduciary relationship within the
meaning of Section 8(1)(e) of the Act can be attributed to a relationship
between an assessee and the income tax authority. The Supreme Court in
the case of CBSE v. Aditya Bandopadhyay: (2011) 8 SCC 497 had
explained that the words "information available to a person in its fiduciary
relationship" could not be construed in a wide sense but has to be
considered in the normal and recognized sense. The relevant extract of the
said decision is quoted below:-

         "41. In a philosophical and very wide sense, examining bodies
         can be said to act in a fiduciary capacity, with reference to the
         students who participate in an examination, as a Government
         does while governing its citizens or as the present generation
         does with reference to the future generation while preserving
         the environment. But the words "information available to a
         person in his fiduciary relationship" are used in Section 8(1)(e)
         of the RTI Act in its normal and well-recognised sense, that is,
         to refer to persons who act in a fiduciary capacity, with
         reference to a specific beneficiary or beneficiaries who are to be
         expected to be protected or benefited by the actions of the
         fiduciary--a trustee with reference to the beneficiary of the
         trust, a guardian with reference to a minor/physically
         infirm/mentally challenged, a parent with reference to a child, a
         lawyer or a chartered accountant with reference to a client, a
         doctor or nurse with reference to a patient, an agent with



W.P.(C) Nos. 85/2010 & other connected matters                      Page 10 of 29
         reference to a principal, a partner with reference to another
         partner, a Director of a company with reference to a
         shareholder, an executor with reference to a legatee, a Receiver
         with reference to the parties to a lis, an employer with reference
         to the confidential information relating to the employee, and an
         employee with reference to business dealings/transaction of the
         employer. We do not find that kind of fiduciary relationship
         between the examining body and the examinee, with reference
         to the evaluated answer books, that come into the custody of the
         examining body."
16.      The information provided by an assessee in its income tax return is in
compliance of the provisions of the Income Tax Act, 1961 and thus, could
not be stated to be information provided in course of a fiduciary
relationship.

17.      Four of the petitioners (Dr Naresh Trehan, Escorts Heart Institute and
Research Center, Delhi, Escorts Heard Institute and Research Center,
Chandigarh and Escorts Heart Institute and Research Center Ltd.) had
further contended that information sought by the respondent was exempt
under Section 8(1)(j) of the Act.                       Section 8(1)(j) of the Act exempts
information which relates to personal information.                      The said clause is
quoted below for ready reference:-

         "8. Exemption from disclosure of information.-- (1)
         Notwithstanding anything contained in this Act, there shall be
         no obligation to give any citizen,--
         xxxx              xxxx                  xxxx         xxxx       xxxx

         (j) information which relates to personal information the
             disclosure of which has not relationship to any public
             activity or interest, or which would cause unwarranted
             invasion of the privacy of the individual unless the Central



W.P.(C) Nos. 85/2010 & other connected matters                                  Page 11 of 29
               Public Information Officer or the State Public Information
               Officer or the appellate authority, as the case may be, is
               satisfied that the larger public interest justifies the
               disclosure of such information:"

18.      The question whether the information provided by an individual in
his income tax returns is exempt from disclosure under Section 8(1)(j) of
the Act is no longer res integra in view of the decision of the Supreme
Court in Girish Ramchandra Deshpande v. Central Information Commr.:
(2013) 1 SCC 212. The relevant extract of the said judgment is quoted
below:

         "11. The petitioner herein sought for copies of all memos,
         show-cause notices and censure/punishment awarded to the
         third respondent from his employer and also details viz.
         movable and immovable properties and also the details of his
         investments, lending and borrowing from banks and other
         financial institutions. Further, he has also sought for the details
         of gifts stated to have been accepted by the third respondent, his
         family members and friends and relatives at the marriage of his
         son. The information mostly sought for finds a place in the
         income tax returns of the third respondent. The question that
         has come up for consideration is: whether the abovementioned
         information sought for qualifies to be "personal information" as
         defined in clause (j) of Section 8(1) of the RTI Act.

         12. We are in agreement with the CIC and the courts below that
         the details called for by the petitioner i.e. copies of all memos
         issued to the third respondent, show-cause notices and orders of
         censure/punishment, etc. are qualified to be personal
         information as defined in clause (j) of Section 8(1) of the RTI
         Act. The performance of an employee/officer in an organization
         is primarily a matter between the employee and the employer
         and normally those aspects are governed by the service rules
         which fall under the expression "personal information", the
         disclosure of which has no relationship to any public activity or



W.P.(C) Nos. 85/2010 & other connected matters                       Page 12 of 29
         public interest. On the other hand, the disclosure of which
         would cause unwarranted invasion of privacy of that individual.
         Of course, in a given case, if the Central Public Information
         Officer or the State Public Information Officer or the appellate
         authority is satisfied that the larger public interest justifies the
         disclosure of such information, appropriate orders could be
         passed but the petitioner cannot claim those details as a matter
         of right.

         13. The details disclosed by a person in his income tax returns
         are "personal information" which stand exempted from
         disclosure under clause (j) of Section 8(1) of the RTI Act,
         unless involves a larger public interest and the Central Public
         Information Officer or the State Public Information Officer or
         the appellate authority is satisfied that the larger public interest
         justifies the disclosure of such information.

         14. The petitioner in the instant case has not made a bona fide
         public interest in seeking information, the disclosure of such
         information would cause unwarranted invasion of privacy of
         the individual under Section 8(1)(j) of the RTI Act."
19.      The CIC rejected the aforesaid contention by holding that the
expression "personal information" would necessarily only apply to an
individual and could not be applicable in case of corporate entities.

20.      It has been contended by the petitioners that the expression "personal
information" must also extend to information relating to corporate entities.
Inasmuch as they may also fall within the definition of expression "person"
under the General Clauses Act, 1897 as well as under the Income Tax Act,
1961. However, I am unable to accept this contention for the reason that the
expression "personal information" as used in clause (j) of Section 8(1) of
the Act has to be read in the context of information relating to an
individual. A plain reading of the aforesaid clause would indicate that the



W.P.(C) Nos. 85/2010 & other connected matters                        Page 13 of 29
expression "personal information" is linked with "invasion of privacy of the
individual".        The use of the word "the" before the word "individual"
immediately links the same with the expression "personal information"

21.      Black's law dictionary, sixth edition, inter alia, defines the word
"personal" as under:-

         "The word "personal" means appertaining to the person;
         belonging to an individual; limited to the person; having the
         nature or partaking of the qualities of human beings, or of
         movable property."
22.      A perusal of the above definition also indicates that the ordinary
usage of the word "personal" is in the context of an individual human being
and not a corporate entity. The U.S. Supreme Court has also interpreted the
expression "personal" to be used in the context of an individual human
being and not a corporate entity. In the case of Federal Communications
Commission v. AT&T Inc: 2011 US LEXIS 1899 the US Supreme Court
considered the meaning of the expression "personal privacy" in the context
of the Freedom of Information Act, which required Federal Agencies to
make certain records and documents publically available on request. Such
disclosure was exempt if the records "could reasonably be expected to
constitute an unwarranted invasion of personal privacy" .         The U.S.
Supreme Court held that the expression "Personal" used in the aforesaid
context could not be extended to corporations because the word "personal"
ordinarily refers to individuals. The Court held that the expression
"personal" must be given its ordinary meaning. The relevant extract of the
said judgment is as under:




W.P.(C) Nos. 85/2010 & other connected matters                  Page 14 of 29
         ""Person" is a defined term in the statute; "personal" is
         not. When a statute does not define a term, we typically "give
         the phrase its ordinary meaning." Johnson v. United States, 559
         U.S. ___, ___, 559 U.S. 133, 130 S. Ct. 1265, 176 L. Ed. 2d 1,
         8 (2010). "Personal" ordinarily refers to individuals. We do not
         usually speak of personal characteristics, personal effects,
         personal correspondence, personal influence, or personal
         tragedy as referring to corporations or other artificial entities.
         This is not to say that corporations do not have correspondence,
         influence, or tragedies of their own, only that we do not use the
         word "personal" to describe them.
         Certainly, if the chief executive officer of a corporation
         approached the chief financial officer and said, "I have
         something personal to tell you," we would not assume the CEO
         was about to discuss company business. Responding to a
         request for information, an individual might say, "that's
         personal." A company spokesman, when asked for
         information about the company, would not. In fact, we often
         use the word "personal" to mean precisely the opposite of
         business-related: We speak of personal expenses and business
         expenses, personal life and work life, personal opinion and a
         company's                                               view.

         Dictionaries also suggest that "personal" does not ordinarily
         relate to artificial "persons" such as corporations. See, e.g., 7
         OED 726 (1933) ("[1] [o]f, pertaining to . . . the individual
         person or self," "individual; private; one's own," "[3] [o]f or
         pertaining to one's person, body, or figure," "[5] [o]f, pertaining
         to, or characteristic of a person or self-conscious being, as
         opposed to a thing or abstraction"); 11 OED at 599-600 (2d ed.
         1989) (same); Webster's Third New International Dictionary
         1686 (1976) ("[3] relating to the person or body"; "[4] relating
         to an individual, his character, conduct, motives, or private
         affairs"; "[5] relating to or characteristic of human beings as
         distinct from things"); ibid. (2002) (same)."




W.P.(C) Nos. 85/2010 & other connected matters                       Page 15 of 29
23.      In my view, the aforesaid reasoning would also be applicable to the
expression "personal" used in Section 8(1)(j) of the Act. The expression
`individual' must be construed in an expansive sense and would include a
body of individuals. The said exemption would be available even to
unincorporated entities as also private, closely held undertaking which are
in substance alter egos of their shareholders. However, the expression
individual cannot be used as a synonym for the expression `person'. Under
the General Clauses Act, 1897 a person is defined to "include any company
or association or body of individuals, whether incorporated or not ". Thus,
whereas a person would include an individual as well as incorporated
entities and artificial persons, the expression `individual' cannot be
interpreted to include such entities. The context in which, the expression
"personal information" is used would also exclude it application to large
widely held corporations. While, confidential information of a corporation
is exempt from disclosure under Section 8(1)(d) of the Act, there is no
scope to exclude other information relating to such corporations under
Section 8(1)(j) of the Act as the concept of a personal information cannot in
ordinary language be understood to mean information pertaining to a public
corporation.

24.      It would also be relevant to refer to the decision of a Division Bench
of this Court in the case of Ashok Kumar Goel v. Public Information
Officer Vat Ward No. 64 & Anr.: (2012) 188 DLT 597 whereby it was
held that information of the returns made to the Sales Tax Commissioner in
relation to a firm was exempt under Section 8(1) of the Act. The relevant
portion of the said judgment is quoted as under:-




W.P.(C) Nos. 85/2010 & other connected matters                     Page 16 of 29
         "7. It is not in dispute that the information in the form of returns
         filed by the respondent No. 2's firm is in the nature of
         commercial confidence which is clearly inferable from Section
         98 of the Act. Such information can be given only if larger
         public interest warrants the disclosure of this information. All
         the authorities below including the learned Single Judge has
         held and rightly so that no public interest is at all involved in
         seeking of this information by the appellant from the
         Sales Tax Commissioner. What to talk of public interest, the
         finding is that the information is sought with oblique motive to
         settle personal scores."
25.      Indisputably, Section 8(1)(j) of the Act would be applicable to the
information pertaining to Dr Naresh Trehan (petitioner in W.P.(C) 88/2010)
and the information contained in the income tax returns would be personal
information under Section 8(1)(j) of the Act. However, the CIC directed
disclosure of information of Dr Trehan also by concluding that income tax
returns and information provided for assessment was in relation to a "public
activity." In my view, this is wholly erroneous and unmerited. The act of
filing returns with the department cannot be construed as public activity.
The expression "public activity" would mean activities of a public nature
and not necessarily act done in compliance of a statute. The expression
"public activity" would denote activity done for the public and /or in some
manner available for participation by public or some section of public.
There is no public activity involved in filing a return or an individual
pursuing his assessment with the income tax authorities. In this view, the
information relating to individual assesse could not be disclosed. Unless,
the CIC held that the same was justified "in the larger public interest"




W.P.(C) Nos. 85/2010 & other connected matters                        Page 17 of 29
26.      At this stage, it may be appropriate to consider the nature of
information that is provided by an assesse to its Assessing Officer. In case
of Income from business and profession, the income tax returns mainly
disclose the final accounts (i.e. profit and loss account and balance sheets)
This information is otherwise also liable to be disclosed by companies and
is available in public domain since it is necessary for a company to file its
annual accounts with the Registrar of Companies. Other incorporated
entities are similarly required to also publically disclose their final
accounts. However, an Assessing Officer may call for further information
while determining the assessable income, which may include all books and
papers maintained by an entity. Such information may also have
information relating to other parties, the disclosure of which may be exempt
under Section 8(1) of the Act. As a matter of illustration, the books of
accounts would record transactions of commercial nature which may enjoin
the parties to the transactions to keep the information confidential. Further,
the books of accounts would also record salaries and other payments to
other individuals. Disclosure of such information would affect not just the
assessee but also other parties. In the circumstances, it would be necessary
to examine the details of information that are sought from the public
authority. In the present case, the respondent seems to have sought for an
omnibus disclosure of all records and returns. In my view, the same could
not be allowed without examining the nature of information contained
therein.

27.      The Supreme Court in the case of Thalappalam Ser. Coop. Bank Ltd.
and others v. State of Kerala and others: Civil Appeal No. 9017 of 2013,



W.P.(C) Nos. 85/2010 & other connected matters                   Page 18 of 29
decided on 07.10.2013. considered the question whether a society
registered would fall within the definition of a public authority under
Section 2(h) of the Act. The Court also clearly stated that the information
supplied by a society to the Registrar of Societies could be disclosed except
for the information that was exempt under Section 8(1) of the Act and that
included accounts maintained by members of society. The relevant passage
from the said judgment is quoted below:-

         "52. Registrar of Cooperative Societies functioning under the
         Cooperative Societies Act is a public authority within the
         meaning of Section 2(h) of the Act. As a public authority,
         Registrar of Co-operative Societies has been conferred with lot
         of statutory powers under the respective Act under which he is
         functioning. He is also duty bound to comply with the
         obligations under the RTI Act and furnish information to a
         citizen under the RTI Act. Information which he is expected to
         provide is the information enumerated in Section 2(f) of the
         RTI Act subject to the limitations provided under Section 8 of
         the Act. Registrar can also, to the extent law permits, gather
         information from a Society, on which he has supervisory or
         administrative control under the Cooperative Societies Act.
         Consequently, apart from the information as is available to him,
         under Section 2(f), he can also gather those information from
         the Society, to the extent permitted by law. Registrar is also not
         obliged to disclose those information if those information fall
         under Section 8(1)(j) of the Act. No provision has been brought
         to our knowledge indicating that, under the Cooperative
         Societies Act, a Registrar can call for the details of the bank
         accounts maintained by the citizens or members in a
         cooperative bank . Only those information which a Registrar of
         Cooperative Societies can have access under the Cooperative
         Societies Act from a Society could be said to be the information
         which is "held" or "under the control of public authority". Even
         those information, Registrar, as already indicated, is not legally
         obliged to provide if those information falls under the exempted



W.P.(C) Nos. 85/2010 & other connected matters                      Page 19 of 29
         category mentioned in Section 8(j) of the Act. Apart from the
         Registrar of Co-operative Societies, there may be other public
         authorities who can access information from a Co-operative
         Bank of a private account maintained by a member of Society
         under law, in the event of which, in a given situation, the
         society will have to part with that information. But the demand
         should have statutory backing.

         53. Consequently, an information which has been sought for
         relates to personal information, the disclosure of which has no
         relationship to any public activity or interest or which would
         cause unwarranted invasion of the privacy of the individual, the
         Registrar of Cooperative Societies, even if he has got that
         information, is not bound to furnish the same to an applicant,
         unless he is satisfied that the larger public interest justifies the
         disclosure of such information, that too, for reasons to be
         recorded in writing."

28.      It is apparent that information submitted by an assessee in the course
of assessment, may also include information relating to other persons. The
exclusions available under Section 8(1) of the Act, would also be available
in respect of that information.

29.      Section 137 of the Income Tax Act, 1961 provided that the
information furnished by an assessee was confidential and was not liable to
be disclosed. Section 137 of the Income Tax Act, 1961 was deleted by the
Finance Act, 1964 and simultaneously, Section 138 the Income Tax Act,
1961 was substituted. Section 138 of the Income Tax Act, 1961 is quoted
below:-

         "138. Disclosure of information respecting assessees.- (1)(a)
         The Board or any other income-tax authority specified by it by
         a general or special order in this behalf may furnish or cause to
         be furnished to-



W.P.(C) Nos. 85/2010 & other connected matters                        Page 20 of 29
           (i) any officer, authority or body performing any functions
               under any law relating to the imposition of any tax, duty
               or cess, or to dealings in foreign exchange as defined in
               clause (n) of section 2 of the Foreign Exchange
               Management Act, 1999 (42 of 1999); or

           (ii) such officer, authority or body performing functions
                under any other law as the Central Government may, if in
                its opinion it is necessary so to do in the public interest,
                specify by notification in the Official Gazette in this
                behalf,




         any such information received or obtained by any income-
         tax authority in the performance of his functions under this
         Act, as may, in the opinion of the Board or other income-tax
         authority, be necessary for the purpose of enabling the
         officer, authority or body to perform his or its functions
         under that law.

         (b) Where a person makes an application to the Chief
         Commissioner or Commissioner in the prescribed form for any
         information relating to any assessee received or obtained by any
         income-tax authority in the performance of his functions under
         this Act, the Chief Commissioner or Commissioner may, if he
         is satisfied that it is in the public interest so to do, furnish or
         cause to be furnished the information asked for and his decision
         in this behalf shall be final and shall not be called in question in
         any court of law.

         (2) Notwithstanding anything contained in sub-section (1) or
         any other law for the time being in force, the Central
         Government may, having regard to the practices and usages
         customary or any other relevant factors, by order notified in
         the Official Gazette, direct that no information or document
         shall be furnished or produced by a public servant in respect of
         such matters relating to such class of assessees or except to
         such authorities as may be specified in the order."




W.P.(C) Nos. 85/2010 & other connected matters                        Page 21 of 29
30.       In the case of Hanuman Pershad (supra), this Court considered the
question whether there was any bar on the Income Tax Department from
disclosing records produced during the assessment proceedings. The said
controversy was answered by the following words:-

         "It is undoubtedly open to the authorities to disclose
         information received by them from assessments or other
         proceedings under the Act. However, there are restrictions
         contained in Section 138 as now existing concerning the
         manner in which that information is to be disclosed. Leaving
         aside sub-clause (a) of sub-section (1) it seems that under sub-
         clause (b), the Commissioner can disclose information if he is
         satisfied that it is within the public interest to do so. Hence, if
         some other authority applies to the Commissioner to obtain
         information, the same may be disclosed in the discretion of the
         Commissioner. Under Sub-clause (a) there is also a power to
         furnish information to other authorities. As this matter has not
         been fully argued or discussed in the present case, it is
         sufficient to note that there is no power to disclose information
         to other authorities and officers outside the provisions of the
         Section. As far as the information already given is concerned,
         we have no power to give any direction concerning the same."

31.      Although by virtue of Section 22 of the Act, the provisions of the Act
have an overriding effect over any other inconsistent law, the said
provisions of the Act insofar as they are not inconsistent with other statutes
must be read harmoniously. Undoubtedly, the income tax returns and
information provided to Income Tax Authorities by assessees is
confidential and not required to be placed in public domain. Given the
nature of the income tax returns and the information necessary to support
the same, it would be exempt under Section 8(1)(j) of the Act in respect of
individual and unincorporated assessees. The information as disclosed in




W.P.(C) Nos. 85/2010 & other connected matters                       Page 22 of 29
the income tax returns would qualify as personal information with regard to
several private companies which are, essentially, alter egos of their
promoters. However, in cases of widely held companies most information
relating to their income and expenditure would be in public domain and the
confidential information would be exempt from disclosure under Section
8(1)(d) of the Act. Further, even in cases of corporate entities, the income
tax returns and other disclosure made to authorities would also include
transactions with other parties and those parties can also claim the
exception under Section 8(1) of the Act. One has to also bear in mind that
an authority may not have any obligation to provide any information other
than in the form in which it is available and the information provided by an
assessee may not have been edited to remove references to other persons.
Keeping all the aforesaid considerations in view, the parliament has enacted
Section 138 of the Income Tax Act, 1961 to provide for disclosure only
where it is necessary in public interest. Similar provisions are enacted
under the Act and clauses (d), (e) and (j) of Section 8(1) of the Act that
specify that information exempt from disclosure under those clauses, could
be disclosed in larger public interest. Section 8(2) of the Act also provides
for a non obstante clause which permits disclosure of information in larger
public interest.

32.      It would also be necessary to refer to Section 11 of the Act, which
provides for a notice to a third party before any third party information is
disclosed.        The proviso to Section 11 of the Act also specifies that
disclosure of trade or commercial secrets, which are protected by law




W.P.(C) Nos. 85/2010 & other connected matters                   Page 23 of 29
would not be allowed unless their disclosure is necessary in public interest.
Section 11(1) of the Act reads as under:-

         "11. Third party information.--(1) Where a Central Public
         Information Officer or the State Public Information Officer, as
         the case may be, intends to disclose any information or record,
         or part thereof on a request made under this Act, which relates
         to or has been supplied by a third party and has been treated as
         confidential by that third party, the Central Public Information
         Officer or State Public Information Officer, as the case may be,
         shall, within five days from the receipt of the request, give a
         written notice to such third party of the request and of the fact
         that the Central Public Information Officer or State Public
         Information Officer, as the case may be, intends to disclose the
         information or record, or part thereof, and invite the third party
         to make a submission in writing or orally, regarding whether
         the information should be disclosed, and such submission of the
         third party shall be kept in view while taking a decision about
         disclosure of information:
         Provided that except in the case of trade or commercial secrets
         protected by law, disclosure may be allowed if the public
         interest in disclosure outweighs in importance any possible
         harm or injury to the interests of such third party."

33.      In the above context where the nature of income tax returns and other
information provided for assessment of income is confidential and its
disclosure is protected under the Income Tax Act, 1961 it is not necessary
to read any inconsistency between the Act and Income Tax Act, 1961. And,
information furnished by an assesse can be disclosed only where it is
necessary to do in public interest and where such interest outweighs in
importance, any possible harm or injury to the assesse or any other third
party. However, information furnished by corporate assessees that neither




W.P.(C) Nos. 85/2010 & other connected matters                      Page 24 of 29
relates to another party nor is exempt under Section 8(1)(d) of the Act, can
be disclosed.

34.      In view of the aforesaid, the principal question that is to be addressed
is whether the CIC has misdirected itself in concluding that disclosure of
income tax returns and other information relating to assessment of income
of the petitioners was in public interest.

35.      In order to address this controversy, it is important to understand the
purpose of the respondent in seeking such information. The proceedings
under the Income Tax Act, 1961 with respect to assessment of income are
at different stages. It is stated that in some cases, assessment is complete
and appeal proceedings are pending in other fora.            In one case, it is
contended that the Appellate Authorities have remanded the matter of
assessment to the Assessing Officer. It is apparent that the assessment
proceedings have thrown up contentious issues which are being agitated
between the income tax authorities and the assessees. The respondent,
essentially, wants to intervene in those proceedings by adding and
providing his contentions or interpretation as to the information provided
by the asseesees or otherwise available with the Income Tax Authorities.

36.      In my view, the CIC has misdirected itself in concluding that this
was in larger public interest. The CIC arrived at this conclusion by noting
that disclosure of information was in larger public interest in increasing
public revenue and reducing corruption. The assessment proceedings are
not public proceedings where all and sundry are allowed to participate and
add their opinion to the proceedings. Merely because a spirited citizen




W.P.(C) Nos. 85/2010 & other connected matters                      Page 25 of 29
wishes to assist in assessment proceedings, the same cannot be stated to be
in larger public interest. On the contrary, larger public interest would
require that assessment proceedings are completed expeditiously and by the
authorities who are statutorily empowered to do so.

37.      In the present case, there was no material to indicate that there was
any corruption on the part of the income tax authorities which led to a
justifiable apprehension that the said authorities were not performing their
function diligently. In any event, the CIC has not found that the
proceedings relating to assessment were not being conducted in accordance
with law and/or required the intervention of the respondent. Assessment
proceedings are quasi-judicial proceedings where assessee has to produce
material to substantiate their return of income.      Income tax has to be
assessed by the income tax authorities strictly in accordance with the
Income Tax Act, 1961 and based on the information sought by them. In the
present case, the respondent wants to process the information to assist and
support the role of an Assessing Officer.         This has a propensity of
interfering in the assessment proceedings and thus, cannot be considered to
be in larger public interest. The CIC had proceeded on the basis that the
income tax authorities should disclose information to informers of income
tax departments to enable them to bring instances of tax evasion to the
notice of income tax authorities. In my view, this reasoning is flawed as it
would tend to subvert the assessment process rather than aid it. If this idea
is carried to its logical end, it would enable several busy bodies to interfere
in assessment proceedings and throw up their interpretation of law and facts
as to how an assessment ought to be carried out. The propensity of this to




W.P.(C) Nos. 85/2010 & other connected matters                    Page 26 of 29
multiply litigation cannot be underestimated. Further, the proposition that
unrelated parties could intervene in assessment proceedings is wholly alien
to the Income Tax Act, 1961. The income tax returns and information are
provided in aid of the proceedings that are conducted under that Act and
there is no scope for enhancing or providing for an additional dimension to
the assessment proceedings.

38.      The Supreme Court in Bihar Public Service Commission v. Saiyed
Hussain Abbas Rizwi: (2012) 13 SCC 61 held that the statutory exemption
provided under Section 8 of the Act is the rule and only in exceptional
circumstances of larger public interest the information would be disclosed.
It was also held that `public purpose' needs to be interpreted in the strict
sense and public interest has to be construed keeping in mind the balance
between right to privacy and right to information. The relevant extract from
the said judgment is quoted below:

         "21. ...... Another very significant provision of the Act is
         Section 8(1)(j). In terms of this provision, information which
         relates to personal information, the disclosure of which has no
         relationship to any public activity or interest or which would
         cause unwarranted invasion of the privacy of the individual
         would fall within the exempted category, unless the authority
         concerned is satisfied that larger public interest justifies the
         disclosure of such information. It is, therefore, to be understood
         clearly that it is a statutory exemption which must operate as a
         rule and only in exceptional cases would disclosure be
         permitted, that too, for reasons to be recorded demonstrating
         satisfaction to the test of larger public interest. It will not be in
         consonance with the spirit of these provisions, if in a
         mechanical manner, directions are passed by the appropriate
         authority to disclose information which may be protected in
         terms of the above provisions. All information which has come



W.P.(C) Nos. 85/2010 & other connected matters                         Page 27 of 29
         to the notice of or on record of a person holding fiduciary
         relationship with another and but for such capacity, such
         information would not have been provided to that authority,
         would normally need to be protected and would not be open to
         disclosure keeping the higher standards of integrity and
         confidentiality of such relationship. Such exemption would be
         available to such authority or department.

         22. The expression "public interest" has to be understood in its
         true connotation so as to give complete meaning to the relevant
         provisions of the Act. The expression "public interest" must be
         viewed in its strict sense with all its exceptions so as to justify
         denial of a statutory exemption in terms of the Act. In its
         common parlance, the expression "public interest", like "p ublic
         purpose", is not capable of any precise definition. It does not
         have a rigid meaning, is elastic and takes its colour from the
         statute in which it occurs, the concept varying with time and
         state of society and its needs (State of Bihar v. Kameshwar
         Singh [AIR 1952 SC 252] ). It also means the general welfare
         of the public that warrants recognition and protection;
         something in which the public as a whole has a stake [ Black's
         Law Dictionary (8th Edn.)].
         23. The satisfaction has to be arrived at by the authorities
         objectively and the consequences of such disclosure have to be
         weighed with regard to the circumstances of a given case. The
         decision has to be based on objective satisfaction recorded for
         ensuring that larger public interest outweighs unwarranted
         invasion of privacy or other factors stated in the provision.
         Certain matters, particularly in relation to appointment, are
         required to be dealt with great confidentiality. The information
         may come to knowledge of the authority as a result of
         disclosure by others who give that information in confidence
         and with complete faith, integrity and fidelity. Secrecy of such
         information shall be maintained, thus, bringing it within the
         ambit of fiduciary capacity. Similarly, there may be cases
         where the disclosure has no relationship to any public activity
         or interest or it may even cause unwarranted invasion of privacy
         of the individual. All these protections have to be given their



W.P.(C) Nos. 85/2010 & other connected matters                       Page 28 of 29
         due implementation as they spring from statutory exemptions. It
         is not a decision simpliciter between private interest and public
         interest. It is a matter where a constitutional protection is
         available to a person with regard to the right to privacy. Thus,
         the public interest has to be construed while keeping in mind
         the balance factor between right to privacy and right to
         information with the purpose sought to be achieved and the
         purpose that would be served in the larger public interest,
         particularly when both these rights emerge from the
         constitutional values under the Constitution of India."

39.      Applying the aforesaid judgment to the facts of this case, it is
apparent that disclosure of information as directed has no discernable
element of larger public interest.

40.      Accordingly, the petitions are allowed and the impugned order is set
aside. The parties are left to bear their own costs.




                                                       VIBHU BAKHRU, J
NOVEMBER 24, 2014
RK




W.P.(C) Nos. 85/2010 & other connected matters                     Page 29 of 29

 
 
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