2026 (2) TMI 1247 - HC - Income Tax

Personal Information in tax returns cannot be disclosed under RTI absent recorded larger public interest; seek judicial production instead.

Income tax returns, assessment particulars and related financial details are held to be personal information protected by Section 8(1)(j) of the RTI Act, ... Scope of RTI Act - harmonious construction of Section 22 of the RTI Act with Section 138 of the Income-tax Act - Personal information under Section 8(1)(j) of the RTI Act - Disclosure of information respecting assessees u/s 138 (1)(a) of income tax act - appropriate mechanism for obtaining income tax returns and financial records of a spouse in the context of maintenance proceedings - competent court for the production of the income tax returns and related financial records of the assessee, in accordance with the provisions of Section 138 of the Income-tax Act, 1961 Whether the income tax returns, assessment particulars and related financial details of an assessee constitute “personal information” under Section 8(1)(j) of the Right to Information Act, 2005, and/or information held in a fiduciary capacity under Section 8(1)(e) of the said Act? - HELD THAT:- Relationship between the Income Tax Department and an individual assessee does partake of the nature of a fiduciary relationship to the extent that the assessee furnishes detailed personal financial information under statutory compulsion with a reasonable expectation that the same will be utilised solely for the purposes of tax administration. Department receives and retains such information in a position of trust. However, this Court recognises that the characterisation of this relationship as “fiduciary” in the strict legal sense has not been conclusively settled by the Hon'ble Supreme Court. The decision in Subhash Chandra Agarwal's case [2019 (11) TMI 895 - SUPREME COURT] shows that the concept of fiduciary relationship under Section 8(1)(e) is to be applied with circumspection and on a case-by-case basis. Income tax returns, assessment particulars and related financial details of an assessee do constitute “personal information” within the meaning of Section 8(1)(j) of the Right to Information Act, 2005, as authoritatively held by the Hon'ble Supreme Court in Girish Ramchandra Deshpande [2012 (10) TMI 218 - SUPREME COURT] The exemption, however, is qualified and not absolute; it may be overridden where a larger public interest warrants disclosure. As regards Section 8(1)(e), while the relationship between the Income Tax Department and an individual assessee partakes of the nature of a fiduciary relationship to a considerable extent, it is not necessary to render a conclusive finding on this point, inasmuch as the protection under Section 8(1)(j) is sufficiently broad to encompass the information sought in the present case. Whether the husband of Respondent No. 1 qualifies as a “third party” within the meaning of Section 2(n) of the RTI Act in the context of the RTI application filed by his spouse, and whether the matrimonial relationship has any legal bearing on that characterisation? - Husband of Respondent No. 1 does qualify as a “third party” within the meaning of Section 2(n) of the RTI Act. The statutory definition is unambiguous and does not admit of any exception based on matrimonial or familial relationship. However, while the characterisation as a “third party” triggers the procedural requirements under Section 11 of the RTI Act, the matrimonial relationship may have a bearing on the assessment of whether larger public interest warrants disclosure under Section 8(1)(j). The marital relationship does not alter the statutory characterisation but may be a relevant factor in the overall evaluation of the competing interests. Whether the disclosure sought by Respondent No. 1, in connection with her claim for maintenance in pending matrimonial proceedings, satisfies the test of “larger public interest” so as to override the exemptions under Section 8 of the RTI Act? - The concept of “larger public interest” cannot be so expansively interpreted as to encompass every private dispute, however genuine or sympathetic the case of the applicant may be. There is a distinction between a matter of public interest and a matter of individual interest, howsoever legitimate. The RTI Act is a legislation designed to promote transparency and accountability in the working of public authorities. In the present case, however, the Central Information Commission did not undertake any analysis of whether the larger public interest test under Section 8(1)(j) was satisfied. The Commission appears to have directed disclosure by placing reliance upon an earlier order without applying its mind to the specific question of larger public interest. This, in the view of this Court, is a material infirmity in the impugned order. Disclosure sought by Respondent No. 1, while connected to a legitimate concern in pending maintenance proceedings, does not, by itself, satisfy the statutory test of “larger public interest” under Section 8(1)(j) of the RTI Act so as to override the exemption protecting personal information. The expression “larger public interest” postulates an interest that extends beyond the individual dispute. An individual maintenance dispute, however meritorious, primarily remains a private matter between the spouses. The Central Information Commission erred in not applying the larger public interest test to the facts of the case. However, this finding does not leave Respondent No. 1 without remedy, as the appropriate mechanism for obtaining such information is through the competent court in the pending maintenance proceedings. Whether Section 138 of the Income-tax Act, 1961, being a special provision governing disclosure of assessee information, restricts or regulates disclosure under the RTI Act, and how it is to be harmoniously construed with Section 22 of the RTI Act? - Section 138 of the Income-tax Act, 1961, being a special provision governing disclosure of assessee information, does regulate and restrict disclosure of income tax information. While Section 22 of the RTI Act gives the Act overriding effect, the exemptions under Section 8 of the RTI Act, particularly clauses (e) and (j), provide sufficient protection for income tax information. The two provisions can be harmoniously construed: the RTI Act applies to information held by the Income Tax Department, but the exemptions under Section 8 protect confidential tax information from unwarranted disclosure. Section 138 of the Income-tax Act reinforces the confidential character of assessee information and supports the conclusion that such information is ordinarily exempt from disclosure under Section 8(1)(j), unless the larger public interest test is satisfied. Whether, the appropriate course for Respondent No. 1 was to seek production of the income tax returns through the competent matrimonial court, rather than by invoking the provisions of the RTI Act? - The appropriate course for Respondent No. 1 was to seek production of the income tax returns through the competent matrimonial court, rather than by invoking the provisions of the RTI Act. The RTI Act is not the appropriate mechanism for obtaining income tax returns of a spouse in the context of maintenance proceedings. The courts adjudicating maintenance claims have ample powers to summon documents and compel disclosure of financial information, and the procedural safeguards available in judicial proceedings are far more appropriate than the relatively blunt instrument of an RTI application. However, Respondent No. 1 is at liberty to approach the competent court in the pending maintenance proceedings to seek a direction to the Income Tax Department to produce the income tax returns and related financial records of her husband. Whether the order dated 12.04.2019 passed by the Central Information Commission directing disclosure of the information calls for interference under Article 226 of the Constitution of India? - The order dated 12.04.2019 passed by the Central Information Commission directing disclosure of the income tax returns and related information of the husband of Respondent No. 1 calls for interference under Article 226 of the Constitution. The Commission erred in: (a) directing disclosure without applying the larger public interest test under Section 8(1)(j); (b) failing to follow the binding pronouncement of the Hon'ble Supreme Court in Girish Ramchandra Deshpande; and (c) relying on an earlier order without independent application of mind. The impugned order is accordingly liable to be set aside. However, Respondent No. 1 is granted liberty to approach the competent court in the pending maintenance proceedings to seek appropriate directions for the production of income tax returns and related financial records. Issues: (i) Whether income tax returns and related financial particulars of an assessee constitute personal information under Section 8(1)(j) and/or information held in fiduciary capacity under Section 8(1)(e) of the Right to Information Act, 2005; (ii) Whether the husband qualifies as a 'third party' under Section 2(n) of the RTI Act when the RTI request is filed by his spouse; (iii) Whether disclosure of such information to the spouse in aid of maintenance proceedings satisfies the test of larger public interest to override Section 8 exemptions; (iv) Whether Section 138 of the Income-tax Act, 1961 restricts or governs disclosure under the RTI Act and how it harmonises with Section 22 of the RTI Act; (v) Whether the RTI Act is the appropriate mechanism for obtaining a spouse's income tax returns for maintenance proceedings or whether the competent court should be approached; (vi) Whether the Central Information Commission's order dated 12.04.2019 directing disclosure merits interference under Article 226.Issue (i): Whether income tax returns and related financial particulars constitute personal information under Section 8(1)(j) and/or information held in fiduciary capacity under Section 8(1)(e) of the RTI Act.Analysis: Binding authority establishes that details disclosed in income tax returns are personal information for the purposes of Section 8(1)(j). The exemptions in Section 8(1)(e) and 8(1)(j) are qualified by the proviso of larger public interest. The relationship between the Income Tax Department and an assessee has characteristics of confidentiality; however, the decisive protection for the requested material arises under Section 8(1)(j).Conclusion: Income tax returns, assessment particulars and related financial details constitute personal information within the meaning of Section 8(1)(j) of the Right to Information Act, 2005. The exemption is qualified and may be overridden only if larger public interest is established.Issue (ii): Whether the husband qualifies as a 'third party' under Section 2(n) of the RTI Act when the RTI request is filed by his spouse.Analysis: Section 2(n) defines 'third party' as any person other than the citizen making the request without exceptions for familial relationships. Characterisation as a third party triggers the procedural safeguards under Section 11, while the matrimonial relationship may be relevant to the later assessment of larger public interest but does not alter the statutory definition.Conclusion: The husband is a 'third party' within the meaning of Section 2(n) of the RTI Act; the marital relationship does not alter that statutory characterisation though it may be a relevant factor in assessing larger public interest.Issue (iii): Whether disclosure to the spouse in aid of maintenance proceedings satisfies the larger public interest test to override Section 8 exemptions.Analysis: 'Larger public interest' requires an interest transcending the private dispute and impacting the public or a significant section thereof. Matrimonial maintenance claims involve important social and constitutional values (right to life and dignity), and case law recognises that in certain maintenance contexts financial information may acquire shared relevance. Nevertheless, the RTI exemption under Section 8(1)(j) cannot be displaced in every private dispute; a reasoned, case-specific satisfaction that larger public interest exists must be recorded by the authority ordering disclosure. The impugned decision lacked such an analysis.Conclusion: On the facts of this case, disclosure through the RTI route does not satisfy the statutory test of 'larger public interest' to override Section 8(1)(j).Issue (iv): Whether Section 138 of the Income-tax Act, 1961 restricts disclosure under the RTI Act and how to harmonise it with Section 22 of the RTI Act.Analysis: Section 22 of the RTI Act gives the Act overriding effect, but Section 8 exemptions already protect confidential tax information. Section 138 is a special provision governing assessee information and reinforces the confidential character of tax records. The provisions can be harmoniously construed: RTI applies to information held by the Income Tax Department subject to Section 8 exemptions; Section 138 supports and supplements the protection of assessee information and prescribes specified channels for disclosure.Conclusion: Section 138 of the Income-tax Act regulates disclosure and reinforces the confidentiality of assessee information; it does not operate to wholly bar RTI applications but, taken with Section 8 of the RTI Act, supports limiting disclosure absent larger public interest.Issue (v): Whether the RTI Act is the appropriate mechanism to obtain a spouse's income tax returns for maintenance proceedings or whether the competent court should be approached.Analysis: Courts possess statutory powers to summon documents and to regulate disclosure with appropriate safeguards (sealed cover, redaction, undertakings). Judicial processes permit granular balancing of relevance, confidentiality and procedural protections that an RTI procedure cannot provide. Where maintenance proceedings are pending, the competent court is the appropriate forum to seek production of tax records.Conclusion: The appropriate mechanism for obtaining a spouse's income tax returns in maintenance proceedings is to apply to the competent court for a production order; the RTI Act is not the proper substitute.Issue (vi): Whether the Central Information Commission's order dated 12.04.2019 directing disclosure merits interference under Article 226.Analysis: Judicial review empowers interference where the authority failed to apply the mandatory larger public interest test, acted without adequate reasoning, or ignored binding precedent. The impugned CIC order relied on an earlier order without independent application of mind and did not record satisfaction on larger public interest contrary to binding authority that tax returns are personal information exempt under Section 8(1)(j) absent such satisfaction.Conclusion: The CIC order dated 12.04.2019 is set aside for failure to apply the larger public interest test and for not addressing controlling precedents. The writ petition is partly allowed and liberty is granted to the spouse to seek production of records from the competent court with directions and safeguards.Final Conclusion: The overall legal effect is that income tax returns and related financial particulars are ordinarily protected as personal information under Section 8(1)(j) of the RTI Act and cannot be obtained via RTI by a spouse absent a recorded finding of larger public interest; the Central Information Commission's direction for disclosure is set aside and the remedy for obtaining such records in maintenance litigation is to seek a court-ordered production with appropriate safeguards.Ratio Decidendi: Income tax returns and related financial particulars constitute personal information under Section 8(1)(j) of the Right to Information Act, 2005 and are exempt from disclosure under the RTI Act unless the competent authority records satisfaction that a larger public interest justifies disclosure; where maintenance proceedings require such records, the competent court, not the RTI mechanism, is the appropriate forum to order production subject to confidentiality safeguards.