Income Tax Authorities could not be asked to hand over documents to Police. 

Thie Karnataka HC has I’m a recent case decide that Income Tax Authorities could not be asked to hand over documents to Police.

This was the case filed by Director General of Income Tax (Investigation) against  Deputy Commisssioner of Police & others.

The citation of the case is as under:

Director General of Income Tax (Investigation) Vs Deputy Commisssioner of Police & others

[2022] 441 ITR 89 (Karn)

Short overview of the case:

In terms of section 91 of the Criminal Procedure Code, 1973 an officer investigating into a crime is entitled to summon or compel production of documents or other things.

Section 138(2) of the Income Tax Act, 1961 begins with a non obstante clause reading “notwithstanding anything contained in sub section (1) or any other law for the time being in force”, no information or document shall be furnished or produced by a public servant in respect of such matters related to such class of assessees or except to such authorities assessee may be specified in the order.

Therefore, a conjoint reading of sections 132 & 138(2) would lead to an unmistakable conclusion that once seizure proceedings are undertaken by officials under authorisation, they are not obliged to furnish any document to public servant in respect of such matters relating to the assessee against whom search and seizure is taken up.

Section 293 of the Income Tax Act, 1961 mandates that no suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under the Act and no prosecution, suit or other proceeding shall lie against the government or any officer for any act done in good faith.

On above facts of the case, the court held as under:

Allowing the writ petition,  that admittedly search and seizure was performed by the petitioners under the Act.

The bar of divulging any information or any document taken into custody during the search was available U/s 138(2) of the Act.

 What the Police wanted to investigate was the Act of search and seizure done by the petitioners.

Therefore, it could not be contended that FIR named anybody and writ petition was not maintainable.

Since the FIR could not have been registered against the petitioners, the aftermath of such registration would be rendered without authority of law.