Right to Information
For
BCAJ May 2006
Narayan Varma
A landmark
decision, specially of interest to the readers of
BCAJ, on the subject of Income-tax Act, is delivered by the Central Information
Commissioner, Mr. M. M. Ansari, on
Mrs. Hoosenally had applied for the following information :
(a) Copy
of the Income-tax Returns submitted by M/s. Applause Bhansali
Films Pvt. Ltd. to the Assessing Officer, for the A.Ys.
2004-05 and 2005-06.
(b) Copy
of the assessment orders in relation to (a) above.
(c) Copy
of any order including review, revision, appeal, etc. in relation to the
assessment years referred to above.
Applause Bhansali Films Pvt. Ltd. are
producers of the movie ‘BLACK’.
Under this
feature, in January 2006 and March 2006, the Orders of PIO (CIT) and the
Appellate Authority u/s.19 of the RTI Act (CCIT), respectively were discussed.
On the appeal furnished
u/s.19(3) of the RTI Act, the Central Information Commission has
now decided the matter. The said decision reads as under :
Decision :
Grounds
of appeal :
The appellant
has asked for details of the Income-tax returns submitted by a particular firm
and copies of the orders by the respondent in the above matter.
The Appellate
Authority has contended that the details of documents sought by the appellant
pertain to ‘third party’ information and the concerned party has not given its
consent for disclosure of the information. As such, there is no public action
involved in filing income-tax returns by a private party. Such information is
personal and submitted in fiduciary capacity,
therefore, it cannot be disclosed.
The Appellate Authority
has also mentioned that there is some financial dispute between the appellant
and the Company, and the appellant has sought information for filing cases
against the Company.
Commission’s decision :
Income-tax
returns filed by the assessees are confidential
information which include details of commercial
activities and that it relates to third party. These are submitted in fiduciary
capacity. There is also no public action involved in the matter. Disclosure of
information is, therefore, exempted u/s.8(1)(d) and
(j). In the case of suspicion of corruption, the matter may be taken with the appropriate
authority.
In the spirit of the RTI
Act, the public authority is required to adopt an open and transparent process
of evaluation norms and procedures for assessment of tax liabilities of various
categories of assessees. Every action taken by the
public authority in question is in public interest, and therefore, the relevant
orders pertaining to the review and revision of tax assessment is a public
action. There is no reason why such orders should not be disclosed. The Chief
Commissioner of Income-tax is accordingly directed to supply relevant copies of
the income-tax assessment orders, if any, provided that such documents are not
exempted u/s.8(1) of the Act.
The appeal is accordingly
disposed of.
From the above, it will be
observed that right to obtain copies of the returns of income is denied on the
ground that it is confidential information which includes details of commercial
activities and relates to third party and no public interest is involved.
The Information
Commissioner has held that disclosure of information by way of copies of the
returns of income furnished by any assessee is
exempted under Clauses (d) and (j) of S. 8(1). Accordingly, not withstanding
anything contained in the RTI Act, there is no obligation to give any citizen
information on the returns of income furnished by any third party.
The said Clauses read as under :
(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;
(j) 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, unless the Central
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.
However, it is
interesting to note that the Information Commissioner ruled that assessment orders are
not covered under the above Clauses and the copies of the same can be
furnished. It is worth noting the words used by him and this, I submit, creates
confusion. The decision states :
The
relevant orders pertaining to the review and revision of tax assessment
is a public action. There is no reason why such orders should not be
disclosed.
It then states :
The CCIT
is accordingly directed to supply relevant copies of the income-tax assessment orders, if
any, provided that documents are not exempted u/s.8(1) of the Act.”
Let us analyse briefly the decision :
o
Firstly, it talks of the orders which are in the
nature of the review and revision of tax assessment. The same can be
interpreted as Appellate orders or the orders of the CIT u/s.263 and u/s.264 and not the assessment
orders u/s.143 etc.
o
Secondly, direction to the CCIT to supply the
assessment orders is conditional, i.e., only if the same are not
exempted u/s.8(1) of the RTI Act.
I am of the
opinion that one may hold the view that the income-tax return on stand-alone
basis does not contain information of commercial confidence or trade secrets or
intellectual property, and accordingly, Clause (d) of S. 8(1) may not apply,
however, it is possible to hold the view that Clause (j) does apply.
However, with
regard to the assessment order, I am of the opinion that both the Clauses have
definite application. The assessment order normally gives the description of
the business carried on by the assessee, total income
declared, nature and sources of income, nature & quantum of expenditure
claimed, especially if they are disallowed fully or partly, if any tax evasion,
then full details thereof and so on.
Though, it is
a landmark decision, the way the decision is worded, I am doubtful whether CCIT
will supply copies of the income-tax assessment orders. He will rule that the
same is exempt u/s.8(1) of the RTI Act.
Further, it
may be noted that the information sought is for the A.Ys.
2004-05 and 2005-06. In all probability, the assessment orders for these years
would not have been passed as they did not become time-barred as on
However, I
must mention that Mr. Y. P. Singh who is the advocate
of the applicant for RTI applications, holds the view that the Central
Information Commission has wrongly denied the information on returns of income.
He stated, “While myself and my client are reasonably satisfied with the order,
yet, since there are patent legal errors linked to the case, we will soon be
filing a writ petition in the Bombay High Court. The reason is that income-tax
returns were indeed treated as ‘confidential’ documents in terms
of S. 54 of the Income-tax Act, 1922, but this law was taken off in 1961.
Further, under the new Income Tax Act, 1961, the returns were treated as ‘confidential’
as per S. 137, but this Section, too, was deleted in the year 1964. Instead, a
very liberal S. 138 was enacted thereupon, which contains no confidentiality
clause and primacy has been assigned to public interest. Besides, there can be
a ‘fiduciary’ relationship of a CA with a client, but it can
never be with an AO, who assumes a quasi-judicial role and
where openness is a condition precedent to follow the comprehensive rules of
natural justice. Moreover, S. 22 of the RTI Act has an overriding effect on all
other laws including the Income-tax Act.”
I may also
note that solicitor general, Goolam Vahanvati, is of the opinion (as reported in DNA), “Income
tax assessment is a private document that can’t be made public. RTI is a new
law. It would have to be judged whether Article 19 (Right to information) is
above Article 21 ( Right to life). I don’t think
Article 19 can override Article 21.”
The RTI
Act :
In this feature, it was
decided to go through the provisions of the RTI Act, 2005. In April 2006, S. 1
and S. 2 were covered. To continue . . . . . . . .
S. 3 states that subject to the provisions of this Act, all
citizens shall have the right to information. S. 4 deals with the obligations
of public authorities. These are too many.
Every public
authority is obliged
v
to maintain all its records duly catalogued and
indexed in a manner and the form which facilitates the right to information
under this Act and ensure that all records that are appropriate to be computerised are, within a reasonable time and subject to
availability of resources, computerised and connected
through a network all over the country on different systems, so that access to
such records is facilitated.
(I
wonder how many public authorities have complied with this obligation.)
v
to publish by 12th October, 2005 particulars, rules,
statements, etc. on 16 different items which include particulars of its organisation, functions & duties; the powers and duties
of its officers, the rules, instructions used by its employees for discharging
functions, the monthly remuneration received by each of its officers and
employees, the directory of its officers and employees and so on.
v
to update
these publications every year.
v
to
publish all relevant facts while formulating important policies or announcing
the decision which affects the public.
The power is
taken to prescribe further information.
It is
interesting to note that this Section provides, “it shall be the constant endeavour of every public authority to take steps in
accordance with the requirements of Clause (b) of Ss.(1)
to provide as much information suo moto to the public at regular intervals through various
means of communication, including internet, so that the public have minimum
resort to the use of this Act to obtain information”.
Other News :
·
The School Education Department
in
·
It is reported that the way the
Right to Information Act is being administered, shows that creating an
empowered public is a distant dream. At every step, officialdom is seeking to
obstruct the flow of information.
Two instances
worth reporting are :
Ø
A lady sought information on how to get a birth
certificate made under RTI Act. She used the RTI Act, as a policeman demanded
Rs.500 to give the certificate. The same night that she made the application,
two policemen, having been offended, appeared at her home and asked her to come
to the ‘thana’ with them.
Ø
A student, under RTI application, demanded his
answer sheets in his law examination in
·
A
complaint of ‘misconduct’ against the Acting Chief of Delhi High Court, Justice
Vijender Kumar Jain, has put the Supreme Court in the
dock under the Right to Information Act. In an interface between RTI and
judicial accountability, the Central Information Commission had on April 3
directed the Supreme Court to disclose the status of the complaint against
Justice Jain within 15 working days. The SC’s registry will by then have to
seek orders of Chief Justice of India Y. K. Sabharwal
in the manner in which information about the complaint can be given in keeping
with, as the Commission says, “the decorum vital to the administration of justice
in the highest court in the land”.