Confidentiality notification under Income tax Act limited to banking companies, so challenge to letters of request failed.

Whether the notification issued under section 138(2) of the Income-tax Act, 1961, applies generally or only to banking companies turns on grammatical and contextual construction: the opening reference to "practices and usages customary among banking companies" and the clause tying statements, returns and accounts to an assessee "being a banking company" restrict the class covered. Prior judicial treatment aligns with this reading. The practical effect is that the notification operates only in respect of assessees that are banking companies, and challenges to letters of request under that notification were unsuccessful.

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Issues: Whether the notification issued under section 138(2) of the Income-tax Act, 1961 applied generally to all assessees or was confined to assessees being banking companies.

Analysis: The opening words of the notification referred to the practices and usages customary among banking companies, and the clause had to be read as a whole. The words relating to furnishing of information, production of documents, and assessment or recovery proceedings were qualified by the concluding description of the assessee as a banking company within the meaning of section 34A of the Banking Companies Act, 1949. A detached reading of the earlier words would be contrary to the natural grammatical structure of the provision. On that construction, the notification was intended to operate only in respect of banking companies, and not generally for all assessees.

Conclusion: The notification did not assist the appellant and applied only to banking companies; the challenge to the impugned order failed.

Ratio Decidendi: A notification issued under section 138(2) of the Income-tax Act, 1961 must be construed as a whole, and where its language and opening context restrict its operation to a specified class of assessees, it cannot be extended by isolating earlier general words from the limiting words that qualify them.

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