Confidentiality of income-tax search material bars police proceedings and compelled disclosure of seized documents under the statutory scheme.

Search and seizure conducted under the Income-tax Act were treated as statutory proceedings, and the seized diary and related materials were covered by the Act's confidentiality framework. Section 138(2) was described as a non-obstante bar on furnishing information or documents to unauthorised persons, while Section 293 protected Government officers from proceedings for acts done in good faith under the Act. Because the police complaint, FIR and Section 91 CrPC notice were directed at acts performed during the income-tax search and sought disclosure of seized material, the proceedings were stated to be unsustainable and liable to be quashed against the assessee-side petitioners.

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Issues: Whether the FIR, police notice under Section 91 of the Code of Criminal Procedure, 1973, and consequential proceedings could be sustained against income-tax for acts done in the course of search and seizure under the Income-tax Act, 1961, in view of the bar under Sections 138(2) and 293 of that Act.

Analysis: The search and seizure were conducted under Section 132 of the Income-tax Act, 1961, and the seized diary and other materials formed part of the statutory proceedings. Section 138(2) contains a non-obstante prohibition against furnishing information or documents to unauthorised persons, and Section 293 bars prosecutions and other proceedings against Government officers for acts done in good faith under the Act. The police complaint and FIR were directed at the very acts performed under the income-tax search, and the subsequent notice under Section 91 of the Code of Criminal Procedure, 1973, was aimed at securing the seized diary. On the statutory scheme and the scope of the bar under Section 293, such criminal proceedings and the demand for disclosure of the seized material could not be maintained.

Conclusion: The FIR, the police notice, and all proceedings founded on them were unsustainable and liable to be quashed in favour of the assessee-side petitioners.

Ratio Decidendi: Where search and seizure are undertaken under the Income-tax Act, 1961, the confidentiality bar under Section 138(2) and the protection under Section 293 prevent criminal proceedings and compelled disclosure of seized material against the officers for acts done in good faith under the Act.

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