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Order Under Section 138(1)(a) of the Income Tax Act, 1961
May, 07th 2019

F. NO. 225/120/2016/ITA.II


Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

North Block, New Delhi
Dated the 21st of September, 2016

Subject: Providing information under section 138 of Income-tax Act, 1961- clarification in respect of Notification No. SO 576 dated 23.05.2003 issued by CBDT- regd.-

Section 138 of the Income-tax Act, 1961 (‘Act’) deals with mechanism for disclosure of information in respect of assessees under the Act. Sub-section (1) of this section provides that CBDT or Income-tax authorities specified by it may furnish certain information, as obtained in performance of their  functions, to authorities either dealing with the laws related to any tax, duty, cess or foreign exchange or to authorities (notified by  Central Government) who are performing their functions under any other law, subject to certain conditions. It is further provided that Pr.CCIT /CCIT /Pr.CIT or CIT may, if satisfied in public interest, can decide to furnish information pertaining to any assessee, which has been obtained in the performance of functions by any Income-tax authorities.

2. However, sub-section (2) of section 138, which starts with a non-obstante clause, stipulates that Central Government, on consideration of certain factors, can notify that no information or document would be furnished in respect of any matter relating to any class of assessees or except to such authorities as specified.

3. The Central Government, invoking power u/s 138(2) had earlier issued Notification vide S.O. No. 576 (E) dated 23.05.2003 prohibiting providing of information/documents to any person or authority with certain exceptions. The same reads as under:

“In exercise of the powers conferred by sub-section (2) of section 138 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Act), the Central Government having regard to all the relevant factors, hereby directs that no public servant shall produce before any person or authority any such document or record or any information or computerized data or part thereof as comes into his or her possession during the discharge of official duties:

Provided  that nothing contained herein before shall apply:

(i) to the disclosure of information (including the production of such document or record or supply of computerized data) in respect of allotment of permanent account number, tax deduction account number and computerization of income-tax records relating to the income-tax assessees, to the persons or agencies as the Director General of Income-tax (Systems) may decide from time to time, in accordance with directions and guidelines issued by the Central Board of Direct Taxes;

(ii) to the disclosure of any information in accordance with the notifications issued under section 138 from time to time.”

4. Thus, the above notification issued u/s 138(2) of the Act prescribes a general prohibition in furnishing of information/documents before any person/authority. Two exceptions have, however, been prescribed where the information can be made The first exception pertains to providing of information by DGIT(Systems) in respect of records or data related to PAN, tax deduction account number and computerization of income-tax records of assessee. The second exception relates to disclosure of information in accordance with notifications issued u/s 138 from time to time.

5. In respect of this second exception, a doubt has been raised that since this exception specifically mentions the term ‘notifications’ issued u/s 138, whether this exception would also cover the disclosure of information under sub-section (1) to be furnished to authorities/persons, who are not required to be notified, as otherwise the powers given u/s 138(1) would become redundant.

6. The matter has been examined . In order to remove any ambiguity from the interpretation of the said notification, it is clarified that clause (ii) of the proviso in the notification dated 05.2003 would mean the disclosure of any information in accordance with the provisions of section 138(1) from time to time. Therefore, the restrain in providing information as stipulated under the said notification shall not apply to disclosure of any information  issued u/s 138(1).

7. The above may be brought to the notice of all concerned.

8. Hindi version to follow

(Deepshikha Sharma) 
Director (ITA-I), CBDT

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