Holding

The repeal of Section 137 removed the statutory impediment, and Section 138(1)(b) does not restrict a civil court’s jurisdiction to summon assessment records filed after 1 April 1964; therefore, courts may compel production and the Commissioner cannot refuse.

Summary

The plaintiff sought recovery of a sum and, during trial, obtained court summons for the Income Tax Department to produce assessment records of the defendants for years 1964-65 to 1971-72. The Department produced the records in sealed covers, claiming privilege under the then‑applicable Section 137 of the Income Tax Act, 1961. The High Court, after referring three questions to a Full Bench, held that the repeal of Section 137 did not remove the bar on courts summoning such documents and that the Commissioner’s order under Section 138(1)(b) was final and could not be challenged. On appeal, the Supreme Court examined whether the omission of Section 137 and the provisions of Section 138(1)(b) actually curtailed a civil court’s jurisdiction to call for assessment records filed after 1 April 1964. The Court held that the repeal of Section 137 removed the statutory fetters, and Section 138(1)(b) only governs applications to the Commissioner, not judicial summons, so courts may compel production of the records. Consequently, the High Court’s view was reversed and the appeal was allowed.

Issues considered

Whether the repeal/omission of Section 137 of the Income Tax Act, 1961 eliminates the statutory bar on a civil court’s power to summon income‑tax assessment records filed after 1 April 1964.
Whether the finality attached to an order of the Commissioner under Section 138(1)(b) prevents a court from requiring production of such records.
Whether the Commissioner can refuse a court summons on the ground of privilege under Sections 54, 137, 138, or the Indian Evidence Act.

Legislation cited

Finance Act, 1964s. 32, s. 33
General Clauses Act, 1897s. 6
Income Tax Act, 1922s. 54
Income Tax Act, 1961s. 137, s. 138(1)(b)
Indian Evidence Act, 1872s. 123, s. 124

Subjects

income taxprivilegedocument productionSection 137Section 138court jurisdictionGeneral Clauses Actassessment records

Judgment

DAGI RAM PINDI LAL AND ANR A
V.

TRILOK CHAND JAIN AND ORS.

FEBRUARY 4, 1992

[KULDIP SINGH AND DR. A.S. ANAND, JJ.] B

Income Tax Act, 1922-Section 54 and Section 137 of the Income Tax
Act, 1961-Repea/ of 1922 Act and omission of Section 137-- Jurisdiction
of Courts to call for the record-Scope of.

Inc01ne Tax Act, 196.1-Section 138(1)(b }-Scope and application
c
of-Jurisdiction and powers of Commissioner of Income Tax under- Scope
of-court's order for Production of Record--Commissioner cannot
refuse-Omission of Section 137--Legislative intention.

Income Tax Act, 1961-Sections 138( I)(b ), 137 read with section q D
General Clauses Act-Repeal of any Enactment-Effect~mission of Sec-
tion 137-court's order for production of recor~an on Court's jurisdiction
whether continues.

Income Tax Act, 1961-Sections 137, 138(l)(b )-Repeal of Section
137-Documents relating to assessment proceedings for 1964-65 on- E
wards-Filed ·before the authority after 1.4.1964 by assessee--Wltetlzer Court
can summon.

The Plaintiff·respondent instituted a suit for recovery of. Rs.
1,39,72~.86 against the defendantsilppellants.
F
When evidence was being recorded in the suit proceedings, the
plaintiff obtained summons from the court requiring the Income Tax
Department to produce in the court records relating to the income tax
assessment of the defendants for the assessment years 1964-65 to 1971-72.
G
The Income Tax Officer produced the record in a sealed cover.

The plaintiff also obtained summons requiring the Income Tax
Officer to produce the income tax record relating tn two other assessees,
l\'hich wa~ produced in the Court by the Department in a sealed cover with
a submission that no disclosure of information regarding income tax H
545
546 SUPREME COURT REPORTS (1992] 1 S.C.R.

A pertaining to an income tax JlSSessce could be made. The plaintiffs in the
meanwhile filed in the court a number of certified copies of the accounts
of the defendants, which he had obtained from the Income-Tax authorities
and sought permission of the Court to tender the cerlified copies in
evidence.

B Before a Single Judge of the High Court on the question of privilege
as claimed by the Income Tax Department, arguments were addressed by
the parties.

The following three questions were referred to the· Full Bench
c (i) What is the position of law relating to privilege prior to 1964 ?

(ii) What is the position of law relating to privilege after 1964? and

(iii) What is the effect of the production of certified copies relating to
income-tax assessment records, and how far certified copies can ·
D
be admitted in evidence ?

The FuU· Bench answered the first and second questions sustaining
the claim of the privilege by the Income Tax Department and the Full
Bench did not express any opinion on the third question.
E
Against the judgment of the Full Bench of the High Court, appeal
was filed by special leave. The controversy before this Court was confined
to the finding of the High Court relating to the claim of privilege for the
production of documents which were filed after the repeal of Section 137,
with effect from 1.4.1964 in respect of assessment years 1964-65 onwards.
F
The appellants (defendants) conten~ed that after the repeal of Sec-
tion 137 of the Income~Tax Act, 1961 by the Finance Act, 1964 there was
no longer any impediment left in the way of a civil court to summon the
production of documents filed by an assessee during the assessment
G proceedings before an Income-Tax Officer after 1.4.1964 in respect of
assessment years 1964-65 onwards, and that the finality attached to an
order of the Commissioner with regard to claim of privilege under Section
138(l)(b) had no relationship to the power of the court to summon that
record.

H Allowing the appeal of the defendants·appellants, this Court,
DAGI RAM v. T.C. JAIN 547

HELD: 1.01. Section 54 of the Income Tax Act, 1922 and after its A
repeal, Section 137 of the Income Tax Act, 1961 had only placed fetters on
the exercise of the jurisdiction, in· respect of the specified documents, by
. the courts, notwithstanding anything contained in any other law for the
time being in force. The exercise of the jurisdiction to seek production of
documents h~d, only been put under a cloud in so far as the record of B
assessment is concerned. [560E]

1.02. With the repeal of the 1922 Act and omission of Section 137 of
the 1961 Act, the fetters on the exercise of the jurisdiction were removed
with the result that the exercise of the jurisdiction to call for. the producM
tion of documents relevant to the case pending before the court, even from C
the inco.meMtax authorities, revived. [560E·F]

1.03. Neither Section 54 of the 1922 Act nor Section 137 of the 1961
Act had taken away for all times the jurisdiction of the courts to call for
the record from the Income-Tax authorities. Those provisions had only put
the exercise of that jurisdiction under a cloud !tnd those fetters were · D
coterminous with the life of Section 54 of the 1922 Act or Section 137 of
the 1961 Act. [560F-G]

2.01. Clause (b) of Sub-Section (1) of Section 138 is limited in its
scope and application. Under it, any person can make an application to E
the Commissioner for any information relating to an assessee in respect
of any assessment made either under the 1922 Act or under the 1961 Act
on or after the 1st April 1960 and the Commissioner of Income Tax has
the authority to ru·m ish or cause to be furnished the information asked
for on being satisfied that it is in the public interest so to do and such an
. order of the Commissioner is final and cannot be called in question in
F
any court of law. The Commissioner of lnc_ome Tax under this clause
performs only an administrative function, on his subjective satisfaction
as to whether it is in the public interest to furnish the information or not
_to any person seeking such information and his decision in that behalf is
final and the aggrieved person cannot question it in a court of law. By G
enacting. this provision, the legislature could not be said to have intended
that the Commissioner of Income Tax would have the authority to ~it in
judgment over the requisition (Judicial order) made by a court ot· law
requiring the production of record of assessment relating to an a~~ts~~e
in a case pending before the court. [S62H-563D} · H
548 SUPREME COURT REPORTS [1992.11 S.C.R.

.A 2.02. When a court of law, in any matter pending before it, desires
the production of record relating to any assessment after applying its
judicial mind and bearing the parties and on being prima facie satisfied
that the record required to be summoned is relevant for the decision of
the controversy before it • it passes a judicial order summoning the
production of that record from the Party having possession of the record.
B
The Commissioner of Income Tax cannot, therefore, refuse to send the
record, as he certainly is not authorised to set at naught a judicial order
of a court of law. He must obey the order of the court by sending the record
to the court concerned. [5630-F]

c 2.03. It is open to the Commissioner of Income Tax to claim
privilege, in respect of any document or record so summoned by 8 court
of law, under Sections 123 and 124 of the Indian Evidence Act, 1872 and
even then it is for the court to decide whether or not to grant that privilege.
Had the legislature intended that no document from the assessment record
D · of an assessee should be produced in a court on being summoned by it,
without the approval of the Commissioner of Income Tax, it would have
said so in Section 138 of the Act itself. [563F-G]

2.04. The repeal of Section 137 of the Act clearly discloses the
legislative intent that it was felt by the legislature that it was no more
E necessary to keep the records of assessment by the Income Tax Depart-
ment relating to an assessee as confidential from the courts and the bar
with regard to the production of any part of the record was removed in so
far as the courts are concerned. The finality which has been attached to
the order of the Commissioner under Section 138(l)(b) of the Act is
F restricted to the cases where the information etc. as contemplated by the
section is called for: by any person, other than a court of law by a judicial ,...
order. [563G-564A]

2.05. The finality which has been attached to the order of the
Commissioner under Section 138(1) (b) of the Act is applicable only in
G cases where application is made to the Co.mmissioner by a party or any
other person for receiving documents or information. It has nothing to do
with the powers of the courts to summon the production of assessment
record of an assessee, filed after 1.4.1964. The privilege as to secrecy, which
the assessee had acquired under Section 54 of the 1922 Act remained
H unimpaired by the repeal of that Act or even by the omission of Section
DAGI RAM v. T.C. JAIN 549

137 of the 1961 Act in respect of record filed prior to 1.4.1964 and relating A
to the assessments prior to that date. That privilege did not extend, after
April l, 1964, to record filed before the income-tax authorities, for the
assessment years 1964-65 onwards. [5608-5618] ·

2.06. Section 138(l)(b) does not affect the powers of the courts to
require the production of assessment records or the disclosure of any B
information therefrom to it, in a case pending before the court when the
court, by a judicial order, requires the production of the record, con-
.sidered relevant by it for decision of a case pending before it. [5648-C]

2.07. The High Court, therefore, fell in error in holding that the
assessment records of an assessee filed before the income-tax authorities,
c
even after April 1, 1964, are immune from production in a court of law on
summons for their production being issued by the court and that the
disclosure of any information from the record even to the courts is subject
to the veto powers of the Commissioner of Income Tax. [564B]
D
3.01. Section 6 of the General Clauses Act as well as Section 138
(l)(b) of the 1961 Act cannot extend the ban on the exercise of the
jurisdiction by the courts to summon the production of documents from
the income-tax authorities after April!, 1964 relating to assessment year
1964-65 in respect of the record· filed after April 1,1964. [5618-C] E

3.02. Section 6 of the General Clauses Act provides that the repeal
of any enactment, unless a different intention appears, shall not affect any
right, privilege, obligation or liability .acquired, accrued or incurred under
the repealed enactment. [561F]
~.,...:.
F
3.03. The general principle is that an enactment which is repealed,
is to be treated, except as to transactions past and closed, as if it had never
existed. The assessee had acquired no right or privilege under the repealed
Act, since the provision is only a procedural restriction and did not create
any substantive right in the assessee, in respect of assessments for the G
period after the omission of Section 137 of the 1961 Act. Thus, reliance
placed on the provisions of Section 6 of the General Clauses Act to hold
the continuation of the ban on the exercise of jurisdiction by the courts.
was misplaced. [561H-562B]

3.04. In respect of the documents filed after the omission of Section H
550 SUPREME COURT REPORTS [1992}1 S.C.R.

A 137 of the 1961 Act, with effect from April1, 1964, relating to assessments
for the period
- .
1964-65 onwards, no right, privilege, obligation or liability
can be said to have been acquired, accrued or incurred prior to the
omission of Section 137 of the Act. [561F-G]

3.05. The ban contained in Section 137 of the 1961 Act on the exercise
B of the powers of a civil court to call for production of documents etc. could
not be said to have continued to exist, in matters arising subsequent to the
omission of that Section with effect from April1, 1964 and that ban came
to an end in respect of the period arter April 1, 1964. [561G]

C 4. After the repeal of Section 137 of the Act, there is no longer any
impediment left in the way of a court to summon the production of
documents filed by an assessee before the income-tax authorities after
Aprill, 1964 relating to assessment proceedings for 1964-65 onwards and
that the finality attached to an order of the Commissioner under Section
13H (1) (b) has no relevance to the exercise of powers by a court to summon
D the production of documents in a case pending before the Court. [564D~El

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1360 of
1974.

From the Judgment and Order dated 14.12.1973 of the Delhi High
E Court in Suit No. 64 of 1969.

Ms. Suruchi Agarwal and T.V.S.N. Chari for the Appellants.

H.K. Puri .and Mrs. Urmila Sirur for the Respondents.

F The Judgment of the Court was delivered by

DR. A.S. ANAND, J, This appealt by special leave, is directed against
the .iudgment of the Full Bench of the Delhi High Court, dated 14.12.1973
in Suit No. 64/69, delivered in a reference made by a learned Single Judge
G for opinion of th~ Full Bench. The questions referred by the learned Single
Judge to the Full Bench revolved around the scope and effect o~ the
provisions of Sections 54 and 59B of the Indian Income Tax Act 1922
(hereinafter referred to as the '1922 Act') and Sections 137 and 138 of the
• Income Tax Act 1961 (hereinafter referred to as the '1961 Act') as
amended from time to time in 1964 and 1967 in the conln1 of the claim ....: ..:,.
H of privilege by the Income Tax Department. [~_)r the production of the
DAGI RAM v. T.C. JAIN {ANAND, J.] 551
;t ... ..

}·~,~.. do.cuments relating to assessment of an ~sessee summoned by the Civil A
· Court. The following ~ree questions were referred to and considered by
the Full Bench: · '- . ·· · · ·

.. "1. What is the position of law relating to privilege prior to 1964?

-, .. 2. What is the position of law relating to privilege after 1964 ?; B
and

3. What is the effe~t of the production of certified copies relat-
ing to income-tax assessment records. and how far certified
copies can be admitted in evidence ?"
c
l . The circumstances under which these questions arose, briefly put, are
~.
I ..
as follows:
f
!
. 2. The plaintiff, Trilok Chand ~ain, insti~utcd a suit for recovery of
Rs. 1,39,722.86 against the defendantS, M/s. Dagi Ram Pindi Lal and Smt. 0

I
~
Budh Wanti Gulat~ w/o Shri Pindi Lal Gulati, the appellants herein.
During the course of proceedings in the suit, when evidence was being
recorded, the plaintiff obtained summons fro~ the court requiring the
Income Tax Department to produce in the court records relating to the
Income Tax Assessment of the defendants, M/~. Dagi Ram Pindi Ui), for

rl .;: the assessment years 1964-65 to 1971-72. The Income Tax Officer to whom
the summons were issued, sent the record in a scaled cover through an
l~pcctor alongwith a letter, dated November 1, 1972, claiming that the said
record was privileged under Section 137 of the 1961 Act. The plaintiff also
E

applied for and obtained summons requiring the Income Ta;~ Officer to
. ~~
..1
produce the income tax record relating to M/s Borizcon Industrial
Products (P) Ltd. and Bishamber Nath Kaul. That recoru was also sent by
F
•
I
the Income Tax Officer in a seated cover alongwith a letter in which it was
submitted that no disclosure of information regarding income ta.'< p~rtain-
ing to an income tax assessee could be made. The plaintiffs, it appears, in
the meanwhile filed in the court. a number of certified copies of the G
accuunts of the defendants which be had been able to obtain from tb~
• •
Income-tax authorities and sought permission of the Court to tender the
certified copies in e\'idcncc. Arguments were addressed by the parties
before the learned.Single Judge on the question of privilege as claimed by
the Income Tax Officer. Being of the opinion that the question of privilege,
a.o; claimed by the lricome Tax Officer, was important and lil<ely to aris~ in H
552 SUPREME COURT REPORTS [1992) 1 S.C.R.
0 •

A · the course of trial, of suits in future also, a r.efcre~ce ·was made by the
learned Single Judge to the Full Bench. In dealmg With the three questions
---t
.
•

(supra) referr~d to it, the Full Bench considered different situations. It
·• co~sidered the first question in the following four situations ~ : .

"(~j Wh~re ·ihe document~, 'records, etc. in respect ~f which <1 ..
B privilege is claimed were flied by an assessee or a third party }
before April 1, 1962, with effect from .which date the Indian
Income-Tax Act, 1922, was· repealed, in respect of assessment
· years up to and including assessment year 1961-62 in proceed-
. ings for the said assessment years t~king place under the Indian
c Income-tax Act, 1922;

(b) Where the documents, records, etc. were filed by an asses-
see or a third party after April 1,1962, but before Aprill, 1964
in respect of assessment years up to and including assessment
· year 1961-62 in proceedings for the said assessment years taking
D place under the Indian Income-tax Act, 1922;

(c) Where the document, records, etc. were filed by an assessee
or a third party after April 1, 1962, but before April 1,. 1964,
in respect of assessment years up to and including assessment
year 1961-62 in proceedings for the said assessment years taking
E
. and
place under the . Income-tax Act, 1961;

(d) Where the documents, rcc~rds, etc. were filed by an asses-
see or a third party after April1, 1962, but before April 't, 1~64,
in respect of assessment years l962-63 and 1963-64 in proceed- ''
F ings for the said assessment years taking place under the
Income-lax Act, 1961:' • ~ • ' f!
')r
and sustained the claim of privilege by the Income Tax Dep~rtinent
in each one· of the situations. ·

G The Full Bench while considering the second question, -dealt with the
following situations: · ~
• •• J • • • '

(a) Where the documents, records, etc. in respect of which
privilege is claimed were filed by an assessee or a third party
after April 1, 1964, in respect of assessment years up and to
H including assessment year ·1%1-62 in proceedings for the said
OAGI RAM v. 't.C. JAIN [ANAND, J.J
. . . 553
assessment years taking place under the ladian lncome~tax Act, A
1922·' . .. . .. . .
, . . I .. ; . ., .

(b) Where the documents, records etc. were filed by an asscS.Se'e
or a third party after April 1, 1964, in respect of assessment
i. years up to and including year 1961-62 in proceedings for the
r.· ~aid assessment years taking place under the Indian Income-tax B
Act, 1961; . ·
... . .. '
.
(c) Where the documents, records, etc. were tiled by an asses-
see or a third party after April!, 1964, in respect of assessment
years 1962-63 and 1963-64 in proceedings for the said ao;sess-
mcnLc; years taking place ~nder the Income-tax Ac~ 1961; and C
. .,.,,
-':"\-
(d) Where the documents, records, ct~. were filed by an asses-
see or a third party after April 1, 1964, in respect of assessment
years 1964-65 onwards."

the claim of privilege was sustained in all the above situations also. D
3. Dealing with the effect of omission of Section 137 and substitution
of Section 138 (1) (a) and (b), the High Court opined;
. .
....... ;that when a party to a proceeding in a Court applies for · E
~ummoning any documents, records etc. from the income-tax
authorities, the Court may summo·~ the said docum~nts,
records,. etc. But on receipt or summons, it is open to the
Commissioner of Income-tax to consider the matter as provided
f under section 138 {1) (b), and decide whether it 'Yould be (sic)
in the public interest to produce or furnish · the documents, F
· records, etc.- summoned for, and submit his view to the Court ·
in answer to the summons. !11 case, he i's satisfied that tire
production, etc. would not be ;,. lhc public imcrest, Iris decision
is fit~ul atrd tire Court to which tlte said dcc:i.rion is communicated
cannot question the same." . .. ., G
~· {EMPHASIS SUPPLIED]
The FuiJ Bench, however, did not express any opinion on the third
QUestion. · ·: ·

4. learned counsel for the ap~Liant has not questioned .the ftndings
of the full B~nch in so far as they relate to the claim of privilege in r~spect H
· · SUPREME COURT REPORTS {1992] 1 S.C.R.
554
f documen~s filed prior to the repeal of the 1922 Act or before th
A 0
. ·on of Section 137 from the 1961 Act. She has questioned the fmd· e
omtsst . . . tn~
of the FuU Bench .only as regards the power and JUnsdiction of the Court
to summon the documents, after the repeal of the 1922 Act and after the
de.letion ·0 rSection 137 from the 1961 Act by tJ:t: Finance Act, 1964 as also
the interpretation pl~ced by the Bench on SectiOn 138 {1) (b) of the Act:
B The controversy before ~s bas b:~n confined to the fi~ding of the High
Court relating to the clatm of pnvtlege for the productiOn of documents
~hich were filed after. the repeal of Section 137, with effect from 14.1964
in respect of assessment yeel!s 1964-65 onWards. Thus, it is the finding on
situation (d) of the second question as rendc~ed by the Full Bench which·
c alone has been questioned and debated ~cfore us.
.,
. . The precise argument of the learned counsel for.the appellant is that
aft~r the repeal of Section 137 of the 1961 Act by Act V of 1964, there is
no longer any impediment left in the way of a civil court to summon the
production of documents filed by an assessee during the assessment
D proceedings before an Income-tax Officer after 1.4.1964 in respect of
asseSsment years 1964-65 onw.ards, and that the finality attached to an
order of the Commissioner with regard to claim of privilege under Section
138 (1) (b) has no relationship to the power of the court to summon that
record.
E
5. For a proper appreciation of the question debated before us, it
would be desirable to refer to the relevant provisions of the 1922 Act and
1961 Act, as amended from time to time, and notice the changes brought
about in the matter of claim of privilege by the Income Ta-< Dep~tment
F Section 54 (1) and (2) of the 1922 Act provided -as fellows:
. I
"54. Di~closure of infomration by a public serrant- ·

(1) All particulars contained in any stat~ment made, return
G: furn~s?ed or accounts or documents produced under. the
proviS~~ns . of this Act or in any c'.-idcnce given, or affida\'lt ~r
deposition made, in the course of any proceedings under thlS
Act other than proceedings under this Chapter, or in any
•record of any assessment proceeding, or anv• proceeding relat· f
m~ to the recovery of a demand, prepared for the purpose. 0
H thas Act, shaU be treated as confidential and notwithstandmg
. . '
...

DAGI RAM v. T.C. JAIN [ANAND, J.] 555

--. ,
~J , ....
·.
'
,. .,. anything contained in t~e Indian Evidence .Act, 1872 ( 1 of 18n) A
· • no Court ·shall, save as provided in this Act,· be entitled to
require any public servant to produce before it any such return,
'' ., :. :. accounts, documents or record or any part of any such record,
· :· , ... . . · or to give evidence .before it in respect thereof.

: \. • ~ • I I " " •

(2) If a public servant discloses any particulars contained in B
any such statement, return, accounts, documents, evidence,
affidavit deposition or record, he shall be pun!shablc with
imprisonment which may extend to six months, and shall also
be liable 'to fine.n
. I .

6. By Section 9 of the Taxation Laws (Amendment) Act of 1960,
c
Section 59-B was inserted in the 1922 Act with effect from April 1, 1960.
It provided as under :- '

"59-B Disclosure of infonnation IY!garding tax payable-
' I • • I ,· . D
• ' ! .- Where a person makes an application to the Commissioner in
. the prescribed form and after payment of the prescribed fee
. ··: .. for information as to the amount of tax determined as payable
by any assessee in respect of any assessment made on or aftl!r
~- the 1st day of April, 1960, the Commissioner may, notwithstand-
! ...
ing anything contained in section 54, if he is satisfied that there
E
are no circumstances justifying its refusal, furni.c;h or cause to
.' be furnished the information asked for." ... ·
., .

~..... , Both the aforesaid pro\~sions dealt with the confidential nature nf
' 'I the documents filed, before the Income Tax authorities and the claim of F
._,.., privilege to disclose the same to anyone, including a court of law. Section
54(1) declared that the various documents referred to therein shall be
I
treated as confidential and prohibited a court from requiring any public·
servant to produce before it any such document or to give evidence bdl)rC
it in respect thereof, notwithstanding anything contained in the Indian G
Evidence Act, 1872. Sub-Section (2) of Section 54 made punishable, the
disclosure by a public servant, of any information contain~d in those
documents. The effect of introduction of Section 59-B by Taxation La\vs
(Amendment) Act 1960 was that it entitled a person to make an application
to the .Commissioner to obtain information thereafter as to the amoulll of ·
tax detem1ined, as payable by an assessee in respect of any asscssmt!nt made H
..
556 . SUPREME GOURT REPORTS · · (1992) 1 S.C.R,

A on or before April1, 1960, and authorised the.Commissioner to furnish or
·cause to. be furnished . the sought for information, if he was·satisfied that
there we~e no circumstances justifying its refusal. This legal positioin roo.
tinued to prevail till April 1, 1960, when the 1922 Act was reP.ealed by the
1961 Act. In the· 1961 Act, provisions were made corresponding to Sec-
tions 54 and 59-B of the 1922 Act in SectiQns· 137 and 138. The relevant
of
B portions of Sections 137 and 138 the Act provided as follows:
.· .·.. .. ' . ~

· .: :: ~137. Disclosure-of in[on11ation prolribitcd-
. . .. . ' . . . *... : f . • ..
(1) All particulars contained in any slatemcnt made, return
·furnished or accounts or documents produced under the
c . provisions of this Actt or in any evidence given or affidavit or
·: 1 ;deposition made in the course of any proceedings under this
j •

Act, other than proceedings under Chapter XXII, ~r in any
record of any assessment proceedings, or any proceedings
..relating to recovery of a demand, prepared for the purpases of
D this Act, shall be treated a5 confidential, and notwithstanding
· ·. ;,.anything contained in the Indian Evidence Act, 1872, no Court
: shall, save as ·provided in this Act, be entitled to require any
· public servant to produce before it any such return, accounts,
documents or record or any part of any such record, or to give ·.
E evidence: bcf~re it in respect thereof.

(2) No public servant shall disclose any particulars contained
. in any such statement, return, accounts, documents, evidence,
affidavit, deposition or record. ·

F (3) ........... .I •

,. ~(4), ~..~~ .... ..
. .
t· . ·r
.
.'
(5) ....... ._.

G •I
"138. Disclosure of illfomaatiotr respectfng tax payable-
• I

~HERE A ~crs~n makes an applici'tion to the Commiss.ioncr
10 l~e prescnbcd form and pays the prescribed fcc for mfor:

malton as to the amount of tax determined· as payable by 8•11
assessee in respect of any ac;sessmt!nt made ~either under thts
H Act or the Indian lucome·tax Act, 1922. on or after the 1st day
'. OAGI RAM v. T.C. JAIN (ANAND, J.]
.. •\ .557 ...
.
, , ,.J

' . .. of 'April, 1960, the Commissioner may, not~th.standing any~ A
~. ~ .· . thing contained in Section 137, if he is satisfied that there ·are
. . · ~ . no circumstances justifying its refuSal, furnish or
c.ause to be
fu~bed the information asked for.•
.. ' .
. .. 7. The provisions of Section 137(1) of the 1961 Act were, as is seen,
- ~ . almost identical to the provisions of sub-section (1) of Section 54 of the B
1922 Act and Section 137 (2} prohibited a public servant from d~closing
the particulars contained in any of the documents mentioned in Section
137 (1). The provisions of Section 138 of the 1961 Act were almost identical
to the provisions of Section 59·B of the 1922 ~ct.

·, B. With effect from April 1, 1964, Section 137 of the 1961 Act was C
· · omitted from the Statute vide Section 32 of the Finance Act No. V of 1964,
~ ' . and Section 138 was substituted by a new Section vide St:ction 33. of the
Finance Act No. V of 1964. The substituted Section 138 rca<ls as under:-

"138. Disclosure of infortnarion respecting assessees:~
. !
. .
(1}' Where a person makes an applicatio~ to the Commissioner
in the prescribed form for any information relating · to any
assessee in respect of any assessment m~de either under this .
- :·
Act or the Indian Income-tax Act, 19n,' on or after the 1st day E
of April, 1960, the Commissioner may, if he is satisfied that it
is in the public interest so to do, fur~isb or cause to be furnished
the information asked for in respect of that assessment only
· · · and his decision in this behalf shall be final and shall not be
'· called in question in any Court of law. · •
F
(2) Notwithstanding anything contained in sub-section (1) or
any.other law for the time being in force, ·the Central Govern-
ment 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 d.ocumcnt shall be fur- G
nished or produced by a public servant in rc~pect of such
PJ: matters relating to such class of assessee~ .or except to such
authoritie~ as· may be specified in the ~rdcr."

9. The scope of Section 138 of the 19~1 Act was, as can be .s:en,
enlargt:d by the substituted provisions of Section 138. Under the anginal H
DAGI RAM. v. T.C. JAIN [ANAND, J.] 559
(b) Where a person makes an application to the Commissioner A
. in the prescribed form for any information relating to any
assessee in respect of any assessment made under this Act or
the Indian Income-tax Act 1922, on or after the 1st day of April,
1960, the ~ommissioner mayt if he is satisfied that it is in the
pubijc interest so to do, furnish or cause to be furnished the
information asked for in respect of that assessment only and B
his decision in this behalf shall be final and shall not be called
in question in any court of law."

The provisions of sub-Section (1) of Section 138 as they originally
stood were incorporated in clause (b) of the substituted sub-Section (1) C
and a new provision was incorporated in clause {a) of sub-Section (1)
which empowered the Board or any other income-tax authority specified
~!' by it by a general or special order in that behalf to furnish or cause to be
furnished, information relating to any assessee to such officer, authority or
·body as is mcntiont.-d in the provision to enable him or it to perform its D
functions under the Act. Vide clause (b) of the substituted sub-Section (1}
of Section 138", finality has· al~o been attached to an order of the Commis-
sionert made on an application filed by any persoll seeking information
relating to an asses.";ee in respect of any assessment. The Commissioner,
has to make an order1 after bdng satisfied that it is in the public interest
so to do, to furnish or cause to be furnished such information and that E
decision of the Commissioner is immune from challenge in any court of
law. · · :.

· 11. The controversy, as already noticed. before us is limited to the
-~) jurisdiction or lack of it of a civil court to seck production of ·documents F
relating to assessments filed after April 1, 1964 in assessment proceedings
,.~.':. 1964-65 onwards after the omission of Sl!ction 137 of the Act.
7

. 12. The .Full Bench, in the impugned judgment, came to the con-
clusion that the omission of Section 137 did not make any difference and G
that the ban on the courts as contained in the repealed Section 137
continued to remain in force by virtue of the prO\·isions of Section 138( 1)
and after 1967 by Section 138 (l)(b) of the Act even. in respect of the
documents filed in the. as!'cssmcnl proceedings after April lt 1964 for
0 a<>Scssmcnts rel::tting to the period 1964-65 onward~:Thc Full Bench also
pressed into aid the provisions of Section 6 of the Gcnl!ral Clau~cs Act 10 H

I
. 560 . SUPRE~ COURT REPORTS [1992) .1 S.C.R..

. A hold that the repeal of Secti~n 137 did not remove the ban on the courts
to summon any documents from the income-tax authorities, even in respect
of documents which had been flied before the income~t~ authorities after
·the repeal of Section 137 after April1, 1964.

.. · 13: In ·our opinion, the High Court fell . in error in coming to · that
B conclusion. It not only ignored the legislative intent manifest in' the omis-
. sion of Section 137 of the 1961 Act, after the repeal· of the 1922 Act, but
also ignored the powers of a court under the general law, to sUmmon such
documents, record etc. as is found relevant to a case pending before the
court, in the absence of any specific prohibition, under any law for the time
C being in force. The High Court assumed that by Section ~4 of the 1922 Act
anq Section 137 of the 1961 ~ct, the jurisdiction of the courts to call for
documents from the income-tax authorities had been .taken away for all
times to come, notwithstanding the repeal ~f the 1922 Act or the omission
of Section 137 specifically from the 1961 Act. The High Court appears to
D . have lost sight of the position that under the Code of Civil Procedure, the
courts of law have always possessed the jurisdiction to call for the produc-
tion of documents relevant to the case before the court from anybody
having custody of tho~e documents. Section 54 of the 1922 Act and after
its repeal Section 137 of the 1%1 Act had only placed fetters on the exercise
of that jurisdiction, in respect of the specified documents, by the courts, ·
E notwithstanding anything contained in any other law for the time bei1,1g in
force. The exercise of .the jurisdiction to seek production of documents
had, thus, only been put under a cloud in so far as the record of assessment
is concerned. With the repeal of the 1922 Act and omission of Section 137
of the 1961 Act~ the fetters on the exercise of that jurisdiction were removed
F with th'e result that the exercise of the jurisdiction to call for the production
·?f documents relevant to the case pending before the court, even from the
. ......
mcome-tax authorities~ revived. Neither Section 54 of the 1922 Act nor I
Section 137 of the 1961 Act had taken away for all times the jurisdiction
of th.e .courts to call for the record from the income-tax authorities. Those
G proVJstons, as already noticed had, only put the exercise 'of that jurisd1c~on
·under a cloud and those fetters were coterminous with the life of Section
54 of the 1922 Act or Section 137 of the 1961 Act.

· The finality which has b.een attached to the order or the Comniis~
14
.
stonlicr u~de: Section 138(1)(b) of the Act is applicable only in cases where
H app cation as made to the c · .
ommtsstoner by a party or any other person
DAGI RAM v. T.C. JAIN (ANAND, J.] 561
'
\.... :: for receiving documents or information. It has nothing to do ·with the A
~ · powers of the courts to summon the production of assessment record of
.an assessee, filed after 1.4.1%4. The Privilege as to 5ecrecy, which the
assessee had acquired under Section 54· of the 1922 Act remained unim-
paired ~y the repeal of that Act or even by the omission of Section 137 ~f
~·-· ~ . the 1951 Act in respect of record filed prior to 1.4.1964 and relating to the
/ .·, assessments prior to that date~ Thtlt privilege did not extend, after Aprill, B
i 1964, to record filed before the income-tax authorities, for the assessment
r years 1964-65 onwards. Section 6 of the General Clauses Act as weil as
~ Sectio·n.138(1)(b) of the 1961 Act. cannot extend the ban on the exercise
of the jurisdiction by the courts to summon the production of documents
from the income-tax authorities after April 1, 1964 relating to assessment C
. year 1964-65 in·respect o~ the record fLied after Aprill, 1964. .
~~ II .
· 15. Section 6(c) of the General Clauses Act, 1897 on which reliance
was placed by the High Court reads as under :-

"6. Where this Act, or any Central Act or regulat.ioo made after· D
the commencement of this Act, repeals any enactment hitherto
made or hereafter to be made, then, unless a different intention
· appears, the repeal shall not .,..............."....................

(c) affect any right, privilege, obligatjon or liability acquired or E
incurred under any enactment so repealed:

A plain reading of the Section shows that the repeal of any enact-
ment, unless a different intention appears, shall not affect any right,
~..... .\ privilege, obligation or liability acquired, accrued or incurred under the
repealed enactment. ln respect. of the documents filed after the repeal of F
Section 137 of the 1961 Act, with effect from April 1, 1964, relating to
~ ·~ as.<;essments for the period 1964-65 onwards, no right, privilege, obligation
t ' or liability can be said to have been acquired, accrued or incurred prior to
the omission of Section 137 of the Act. Therefore, the ban contained in
Section 137 of the 1%1 Ac' on tht! exercise ol the. powers of a civil court G
to can for production of documents etc. could not be said to have con-
~ . tinucd to exist, in matters arising subsequent to the omission of that ~cction
,.. with effect from April 1, 1964 and that ban came to an end in respect of
the period after April 1, 1964. The general principl~ is thaJ an enactment
which is repealed, is to be treated, except as .to lr8fSB~ions p~t and
closed, as if it had never existed. The assessee had acqutred no nght or H
·.
562 SUPREME COURT REPORTS ·. · [1992)1 S.C.R.

·A privileg~ under the .repealed Act, since the pr~vision is only a procedural
restriction and did not create any substantive right on the assessee, in -1
respect of assessments for the period after the omission of Section 137 of
the 1961 Act. Thus, reliance placed on the provisions of Section 6 of the
General Clauses Act to hold the continuation of the ban on the exercise
of jurisdiction by th~ courts was misplaced.
B ......
~~

16. Deal~g with}he scope of Section 138(1)(b) ·of the Act,' the High
Court held that' the said provisions attached a finality to an order of the
Income Tax, Commissioner and applied to the cases where the record was
summoned even by ·a court of law. The High Court opined :
c "The complete omission of the declaration of the confidential
oature·of the documents, records, etc. and the removal of the
ban on courts and public servants no doubt,· suggests that the
'power of a court under the general law to summon such ..
documents, records, etc. relevant to the case before it has been
D restored . . But., at the same time, ,the legislature which em-
powered the Commissioner of lncomc·tax to furnish the infor-
.· ...mation if he is satisfied that it iii in the public interest so to do
made the decision _of the Commissioner final .and un~ques
tionablc in a Court of law. Wbcn two powers arc thus vested
E in two legal authorities, neither of them can be ignored, and
both of them have to be reconciled and given effect to. In the
case of the two powers under consideration, it has to be noted
that the power to summon which vests in a court is under the
·· general law; while the power 'of the Commissioner lias been
conferred upon him by a special law and has, therefore, to
F prevail over the former. In view of the same, it has to be held
··· that while it is ope.n to a court to· summon the documents,
records etc. from the Income-tax Commissioner, it is equally
open to the Commissioner on receiving the summons to con-
sider whether the · production/furnishing ·of the documents,
records etc. would be in the public interest, and submit the
G
same to the cou~t in answer to the summons."
. · !

We arc unable to subscribe to the above view.
. . . ., .
11. Clau.sc (b) of ~~b-Scction (1) of Section 138 is limited in its scope
H and application. Under it, any person can make an application to th~
.·
DAGl RAM ~·. T.C JAIN [ANAND, J.] 563

~::·- Commissioner for any information relating to an assessee in respect of any A
· assessment made either under the 1922 Act or under the 1961 Act on or
after the 1st April 1960 and the Commissioner of Income Tax has the
authority to furnish or cause to be furnished the information asked for on
being satisfied tba't it is in the public interest so to do and such an order
~-· of the Commissioner is final and cannot be called ill question in any court B
· . of law. The Commissioner of Income Tax under this clause performs only
an administrative function, on his subjective satisfaction as to whether it is ·
in the public interest to furnish the information or not to any person
seeking such information and his decision in that behalf is final and the
aggreived person cannot question it in a court of law. By enacting this C
provision, the legislature could not be said to have intended that the
~ :; Commissioner of Income Tax would have the authority ·to sit in judgmcm
over the requisition made by a court of law requiring the production of
record of assessment relating to an assessee in a case pending before the
court. When a court of law, in any matter pending before it desires the
. production of record relating to any assessment after applying its judicial D
mind and hearing the parties and on being prima fa~ie satisfied that . the
rccQrd required to be summoned is relevant for the ~ecision of the con-
troversy before it - it passes a judicial order .summoning the prod~ction
~ of that record from the party having possession ·of the record. The Com-
missioner of Income Tax cannot, therefore, refuse to send the record, as E
he certainly is not author~ed to set at naught a judicial ord.er of a court of
law. He must obey the order ~f the court by sending the record to the court
concerned. Indeed, it is open to the Commissioner of Income Tax to claim
privilege, in respect of any document or record so summoned by a court
of law, under Sections 123 and 124 of the Indian Evidence Act 1872 and F
........... even then it is for the court to decide whether or not to grant that pri'\.ilcge.
Had the legislature intended that no document from the assessment record
of an assessee should be produced in a court on being summoned by it,
without the approval of the Commis.c;ioner of Income Tax, it would have
said so in Section 138 of the Act itself. The repeal of Section 137 of the
~ Act clearly di5closes the legislative intent that it was felt by the legislature
that it was no more necessary to keep the records of assessment by the
Income Tax Department relating to an assessee as . confidential from the
?f
corms and the bar with regard to the production of any part the .record
was removed in so far as the courts are concerned. The fmahty whtch has H
564 SUPREME COURT REPORTS (1992} 1 S.C.R.

A been attached to the order or the Commissioner under Section 138(1)(b) ,_).
of the Act is, thus, restricted to the cases where the information etc. as ~~
contemplated by the Section is called for by anypers_oll, other than a court
of Jaw by a judicial order. The High Court, therefore, fell i.n error in
holding that the assessment records of an assessee filed before the income·
B tax authorities, even after April 1, 1964, are immune from production in a ~ ...
court of law on summons for their production being issued by the court ·
· and that the disclosure of any information from the record even to the
courts is subject to the veto powers of the Commissioner of Income Tax.
Section 138{1)(b) does not affect the powers of the cmtrts to require the
C production of assessment records or the disclosure of any information
therefrom to it, in a case pending before the court when the court, by a .
judicial order, requires the production of the record, considered relevant -')
by it for decision of a case pending before it.

18. As a result of the above dh.cussion, 'we, therefore, find that the
D answer given by the Full Bench of the High Court in the impugned
judgment, to situation (d) of the second question.(supra) as formulated by
it, is erroneous and· we set it·asidc. Consequently, we hold that after the
repeal of Section 137 of tbe Act, there is no longer any impediment left in
the way of a ·court to summon the production of documents filed by an
E assessee before the incomc·tax authorities arter April 1, 1964 relating to
ac;scssment proceedings for. 196+65 onwards and that the finality attached
to an order of the Commissioner under Section 138(1)(b) has no relevance
to the exercise of powers by a court to summon the production of docu-
ments in a case pending before the Court. Since, the challenge before us
had been con~ne.a to the answer given by the High Court to situation (d)
F of the second question as rormulatcd by it and no other finding of the High
Co~rl .was ~lied in question, we have refrained from expressing any
opinion ·on the other findings recorded by the Full Bench of the High
Court. The appeal consequently succeeds to rhc extent indicated above and
is allowed. We, however, make no order as to costs.
•
V.P.R.
Ap~eal allowed. ~
-