Income-tax record privilege for pre-1964 assessment years survives where later reversal was confined to a narrower category.

Departmental privilege over income-tax records for assessment years 1962-63 and 1963-64 remained available because the later Supreme Court reversal was confined to a limited category of documents filed after April 1964 for assessment years 1964-65 onwards. The earlier Full Bench position continued to govern pre-1964 records, so the claim of privilege for those records was sustained and the direction for their production was set aside.

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Issues: Whether the Income-tax Department's claim of privilege in respect of records relating to the assessment years 1962-63 and 1963-64 was liable to be sustained and the order directing production of those records was liable to be set aside.

Analysis: The governing principles were drawn from the Full Bench decision which had sustained the Department's privilege in the situations then considered, and the later Supreme Court reversal was confined to a limited category relating to documents filed after April 1964 for assessment years 1964-65 onwards. That limited reversal did not disturb the Full Bench position governing privilege for the earlier period. As the records in question related to years prior to the cut-off, the earlier legal position continued to apply and the Department's privilege remained available.

Conclusion: The claim of privilege was upheld for the assessment years 1962-63 and 1963-64, and the direction for production of those records was set aside.

Ratio Decidendi: The Department's privilege over income-tax records for pre-1964 assessment years survives unless expressly displaced by the controlling precedent applicable to that period.

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