Law:

Section:

SECTION 138(2) OF THE INCOME-TAX ACT, 1961 - DISCLOSURE OF INFORMATION - RESPECTING ASSESSEES - WHETHER ITO CAN CLAIM PRIVILEGE OF WITHHOLDING INFORMATION PERTAINING TO ASSESSEES IN TERMS OF SECTION 138(2) IN ABSENCE OF SPECIFIC ORDER MADE BY CENTRAL GOVERNMENT IN THAT BEHALF UNDER SAID SECTION - HELD, NO Facts At the instance of the petitioner requiring production of tax assessment files relating to her firm, the Addl. District Judge requested the concerned ITO to send those files for perusal in a reference pending in his Court under section 30 of the Land Acquisition Act, 1894. The ITO, while sending the requisitioned files in sealed covers, claimed privilege in terms of section 138(2) to the extent that the information contained therein could not be disclosed. The Court upheld the ITO's claim. On a civil revision petition: Held A plain reading of section 138(2) makes it clear that the Central Government may 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 that order. The Central Government alone is the judge in that regard and is to regulate the provision of privilege by manifesting its intention in the Official Gazette, the regulating basis for the purpose being that it must keep regard of the practices and usages customary or any other relevant factors while making such order. In other words, the provision envisages the Central Government to be alive to the needs of the time which may require furnishing or withholding of any information or document pertaining to a particular class of the assessees or from a particular class of authorities. Unless and until such an order is made, no such absolute privilege as claimed by the ITO can be conceded to him on the mere existence of the aforesaid provision. The ITO would have to further justify his stance by disclosing the particulars of the notified order of the Central Government where under privilege is claimed. There is no such omnibus power with him to withhold information or document. In the instant case, the…

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