Court upholds confidentiality of income tax returns under RTI Act, emphasizing public interest exceptions.

The court held that income tax returns and related information are exempt from disclosure under Section 8(1) of the Right to Information Act unless larger public interest justifies it. It rejected the Central Information Commission's decision to disclose the information, emphasizing that assessment proceedings should not be subject to external interference. The court found no evidence of corruption to warrant intervention and reiterated that exemptions under Section 8 should prevail, with disclosure only in exceptional cases of public interest. The petitioners succeeded, and the CIC's order was overturned, with each party bearing its own costs.

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Issues Involved:
1. Whether income tax returns and related information are exempt from disclosure under Section 8(1) of the Right to Information Act, 2005.
2. Whether the Central Information Commission (CIC) was correct in holding that such information was required to be disclosed in public interest.

Detailed Analysis:

Issue 1: Exemption of Income Tax Returns and Related Information under Section 8(1) of the RTI Act
- Section 8(1)(d) - Commercial Confidence: The petitioners argued that income tax returns include confidential business information and their disclosure could harm competitive interests. The court acknowledged that such information, if confidential and not in the public domain, should remain so unless larger public interest necessitates disclosure.
- Section 8(1)(e) - Fiduciary Relationship: The court rejected the contention that the relationship between an assessee and the income tax authority is fiduciary, referencing the Supreme Court's interpretation in CBSE v. Aditya Bandopadhyay.
- Section 8(1)(j) - Personal Information: The court held that income tax returns of individuals are personal information and exempt from disclosure unless larger public interest justifies it. This was supported by the Supreme Court's decision in Girish Ramchandra Deshpande v. Central Information Commr. The court clarified that "personal information" pertains to individuals and not corporate entities, but confidential information of corporations is protected under Section 8(1)(d).

Issue 2: Public Interest Justification for Disclosure
- CIC's Conclusion: The CIC had directed disclosure, believing it was in the larger public interest to increase public revenue and reduce corruption. The court found this reasoning flawed, stating that assessment proceedings are quasi-judicial and not public forums for intervention by unrelated parties.
- Assessment Proceedings: The court emphasized that these proceedings should be conducted by statutory authorities without external interference, as this could disrupt the process and lead to unnecessary litigation.
- No Evidence of Corruption: There was no indication of corruption among income tax authorities that would justify the respondent's intervention. The court stressed that the respondent's desire to assist in assessment proceedings did not constitute larger public interest.
- Supreme Court Guidance: Referencing Bihar Public Service Commission v. Saiyed Hussain Abbas Rizwi, the court reiterated that statutory exemptions under Section 8 must be the rule, with disclosure only in exceptional cases of larger public interest, balancing privacy and information rights.

Conclusion:
The court concluded that the CIC had misdirected itself in ordering the disclosure of income tax returns and related information, as there was no substantial public interest. The petitions were allowed, and the CIC's order was set aside, with each party bearing its own costs.

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