The meaning of "information" in Section 15, Excess Profits Tax Act, and the conditions for re-assessment under that section.

Chagla, C.J.

1. On this reference the assessee challenges an order of re-assessment made under Section 15, Excess Profits Tax Act.

2. It would appear that the assessee, which is a dealer in iron steel, was assessed to excess profits tax on an income of Rs. 4,03,269 the assessment order under the Excess Profits Tax Act was made on 17-2-1943, for the purpose of making this assessment the accounts of the assessee were scrutinised by one Killawalla. Against the order of assessment the assessee preferred an appeal to the Appellate Assistant Commr., its contention being that the Income-tax Officer was wrong in disallowing a sum of Rs. 98,126. In the course of the hearing of this appeal the Appellate Assistant Commr. forwarded the case to the Income-tax Officer Mr. D. N. Dastur for a careful scrutiny of the books of account in this connection Mr. Dastur made his report. At the time that the assessment order under the Excess Profits Tax Act was passed, the income-tax assessment of the assessee was not completed this assessment was completed by an order made on 24-3-1947, the assessment was made on income-tax not on the basis of the income of Rs. 4,03,269 as has been done under the Excess Profits Tax Act, but was made on the basis of the income of Rs. 13,99,095. This increased assessment was made on the basis of Mr. Dasturs report. On 1-10-1946, a notice was issued to the assessee under Section 15, Excess Profits Tax Act. Its assessment was reopened it was assessed to excess profits tax on the income of Rs. 13,99,095 in place of the original assessment on the income of Rs. 4,03,269. It is this order of re-assessment under Section 15 that is being challenged by the assessee.

3. The first challenge to this order is made on the ground that the Appellate Assistant Commr. should not have made a reference of the assessees case to Mr. Dastur who was not seized of the assessment, it is contended that the dealing by Mr. Dastur of the assessees case offends against the provisions of Section 54, Income-Tax Act. Section 54 safeguards all disclosures made by an assessee in connection with income-tax proceedings treats all this information as confidential, it penalizes any public servant who discloses any such information. Now in asking Mr. Dastur to scrutinize the accounts of the assessee the Appellate Assistant Commr. was not disclosing information to anyone outside the Income-tax Department. If there was any disclosure to Mr. Dastur, it was in connection with the assessment of the assessee. The disclosure which is safeguarded protected under Section 34 is disclosure for purposes other than the income-tax proceedings. Reliance was placed in this connection on a decision of this Ct. in Dinshaw v. Commissioner of Income-tax, Central, 45 Bom. L. R. 31 : (A. I. R. (30) 1943 Bom. 77). In that case Sir John Beaumont C. J., Kania J. took a serious view of the fact that the Income-tax Officer when dealing with the assessment allowed the assessees partner who was not concerned with the assessment to take part in the proceedings, the Gt. took the view that in allowing the partner to be present a disclosure was made under Section 54 of the Act. It is difficult to understand what parallel can be drawn between the case that that Bench was considering the case that is before us. Whereas the partner had nothing whatever to do with the assessment, Mr. Dastur was an Income-tax Officer who, although not seized with the assessment of the assessee, was asked to look into the accounts for the purpose of the assessment of the assessee. The further irregularity which was severely condemned by Sir John Beaumont Kania J. was the fact that while the assessment was going on while the Income-tax Officer was questioning the assesses his official superior was present at these proceedings put questions to the assessee or put them indirectly through the mouth of the Income-tax Officer who was conducting the inquiry, the reason why this p