Issue:
Whether income tax returns and the information provided to the income tax authorities during the course of assessment and proceedings thereafter, are exempt under Section 8(1) of the Right to Information Act, 2005 (‘RTI Act’) and whether the Central Information Commission (CIC) was correct in holding that such information was required to be disclosed in public interest?
Background:
The RTI Applicant, an informer of the income tax department sought information and all the records available with the Income tax department in respect of nine assessees viz, Dr. Naresh Trehan, Mr. Rajan Nanda, Big Apple Clothing Pvt. Ltd, Escorts Ltd etc.
On receiving the RTI Application, the Central Public Information Officer (‘the CPIO’) sent notices under Section 11(2) of the RTI Act to the assesses to make representation against the proposed disclosure. The assesses objected to disclosure of information.
Thereafter, the CPIO rejected the Application on the ground that the Applicant failed to substantiate the public interest involved in disclosure information related to third parties.
The RTI Applicant preferred an Appeal before the CIC. CIC held that disclosure of income tax returns and other information relating to assessment of income was in public interest as it would increase public revenue and reduce corruption and directed that information be disclosed.
The assesses challenged the judgment before the Delhi High Court on the ground 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.
Observations of the Delhi High Court:
- 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.
- 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.
- Indisputably, Section 8(1)(j) of the Act would be applicable to the information pertaining to Dr Naresh Trehan and the information contained in the income tax returns would be personal information under Section 8(1)(j) of the Act.
- CIC wrongly directed disclosure of information of Dr Trehan by concluding that income tax returns and information provided for assessment was in relation to a “public activity.”
- There is no public activity involved in filing a return or an individual pursuing his assessment with the income tax authorities.
- The assessment proceedings are not public proceedings ………… Merely because a spirited citizen 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.
- 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. This reasoning is flawed as it would tend to subvert the assessment process rather than aid it.
Delhi High Court held:
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 relates to another party nor is exempt under Section 8(1)(d) of the Act, can be disclosed. In the present case, disclosure of information has no discernable element of larger public interest.
Naresh Trehan Vs. Rakesh Kumar Gupta, WP (C) Nos. 85/2010 and other connected matters, High Court of Delhi dated 24.11.2014
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