Answer to Question #230278 in Management for Aishu

Question

Explain in detail two (2) real-life cases where provisions of information has been denied on grounds of the exemption stated in Right to Information Act, 2005

Answer 1

1. Only after the final adjudication about the tax liability has been made, after the matter has gone through all stages of appeals and revisions, and a final decision about prosecuting or not prosecuting that person has been made by an appropriate competent authority, can an investigation into tax evasion be said to be over or complete. Shri Shanker Sharma and M/s. First Global Stock broking Pvt. Ltd. and others Vs. Director of Income Tax (Inv.)-II & CPIO, Deptt. of Income Tax, Mumbai (F. No. CIC/AT/A/2007/00007 dated 10.07.2007), the applicant sought the names and details of informer on the basis of whose information searches on Shanker Sharma and Devina Mehra were conducted by Deputy Commissioner of Income Tax (Inv Tax evasion is often a long and complicated process. The evader is frequently not a single person, but rather part of a complex network involving criminal elements, including the mafia.

The lure of the benefits that come their way for successfully identifying tax evaders motivates those who provide information to the public authority regarding tax evaders. At the same time, such people are putting themselves and their families in terrible danger. If their names and identities are revealed, they risk incurring the wrath of those who have suffered financially as a result of the government's action, as well as criminal elements who may be operating behind the scenes. Disclosing the source of a public authority's information, on the basis of which that authority acts to recover the State's rightful revenues, would cripple the Department's operations and have a negative and long-term impact on its operations as well as the State's revenues.

The CPIO points out that the same party brought this issue before the High Court in the same case, and the Court ruled in favor of the Income Tax Department, holding that the sources of information and files containing the Income Tax Department's notations "are not required to be disclosed" and that the respondents' claim of privilege in that regard is accepted. The Court's reasoning was sound, and it was founded on a thorough understanding of the public authority's functioning and purpose, as well as the motivations of persons who are subjected to law enforcement by such designated public authorities. Any interference with the established system has the potential to have unintended and potentially disastrous effects for the overall public authority structure.

The respondents' argument is that the appellants' assertion is incorrect. In the case of the Income Tax Department, the term "investigation" refers to not only the initial investigation but also all subsequent actions, such as all levels of appeals and the final decision of the Income Tax liability based on the initial investigation. No investigation can be regarded to be thorough in the true sense until that is done. He further said that the decision to charge the individual being investigated should be made only after all of the above-mentioned steps of the inquiry have been completed. Any disclosure of material related to the original inquiry, at any time prior to the final completion of any prosecution, would be damaging to the public authority's case. He warned against taking an overly mechanical approach to the investigation's conclusion, as the appellants advocated. He further mentioned that in cases involving police activity, there is frequently a symmetrical sequence of inquiry and prosecution, with clearly defined boundaries. This is not the case when it comes to so-called white-collar crimes, such as tax evasion. Actions are less well defined here, and they frequently go back and forth until the complete image emerges and a decision is made on whether or not to prosecute a specific person who may have been investigated. noting that in circumstances like this, it would be a misnomer to declare that the time the Investigating Officer sends his report to the appropriate authority, the investigation is over.

Held

The CPIO also went into great detail on how the Department develops a database of its informants and sources and code-names them in order to keep their identities hidden. Even officers inside the public authority, with the exception of those who may be actively dealing with the situation, are unaware of this. Disclosing the nature of the intelligence, even after removing the names of the informant's individual sources, might jeopardize the entire system. This reasoning is sound to me. The appeals are dismissed in light of the foregoing.

2. Once it is proved that the information sought by an applicant is relevant to a quasi-judicial procedure, the RTI Act cannot be used to get access to that information.

In Shri Vijay Kamble vs. Commissioner of Customs, Mumbai (F.No.CIC/AT/A/2008/01466 dated 23.03.2009), the appellant requested copies of show cause notices and other documents relating to the proceedings by the Directorate of Revenue Intelligence (DRI) that are currently being adjudicated by the Commissioner of Customs (Exports). The CPIO and the Appellate Authority both refused to release the material, citing RTI Act Sections 8(1)d, 8(1)(h), and 8(1)(j). Respondents reiterated in their comments filed with the Commission that the topic of this RTI-request was evidence in an ongoing investigation conducted by the Commissioner of Customs (Exports). At this point, disclosing any information would jeopardize the ongoing inquiry. Respondents argued at the hearing that any investigation process must be shielded from intrusive participation by third-parties posing as goodwill ambassadors. It would be difficult to maintain the integrity of the investigative process, expose the investigating and adjudicating officers to external influences and duress, and prevent them from committing fraud unless the investigation is allowed to be conducted in the letter and spirit of the law, in this case the Customs Act, and if unconnected persons are allowed to intervene in the proceeding through intrusive inquiries. They also pointed out during the hearing that the adjudicating process was a quasi-judicial proceeding that fell outside the scope of the RTI Act, according to the Commission's full Bench decision (Rakesh Kumar Gupta Vs. Income Tax Appellate Tribunal (ITAT); Appeal No.CIC/AT/A/2006/00586; Date of Decision: 18.09.2007). If intervention for disclosure of information relevant to an existing adjudication process is permitted, questions about processes before judicial courts and even superior courts will be raised. This would be in violation of the Indian Constitution's scheme of separation of powers.

The following are some key aspects of this particular appeal relating to the information: I the information relates to a current adjudication proceeding before the Commissioner of Exports; (ii) the matter was investigated by the Directorate of Revenue Intelligence, after which it was transferred to the Commissioner (Exports) for further adjudication; (iii) the adjudication proceedings are currently ongoing; and (iv) the adjudication proceedings are currently ongoing; (v) As a preliminary to conducting the adjudication, Commissioner Customs (Export) has issued show cause notices to all 12 parties, and (vi) the matter has been hanging fire since 1998.

Held

Both the appellant and the respondents have raised several issues in this case in the context of the RTI Act's requirements. The main question to be answered is whether the proceedings before the Commissioner of Customs, which are undoubtedly quasijudicial in nature, would be subject to RTI Act action. It was the Commission's ruling in Rakesh Kumar Gupta vs. Income Tax Appellate Tribunal (ITAT) in Rakesh Kumar Gupta vs. Income Tax Appellate Tribunal (ITAT) in Rakesh Kumar Gupta vs. Income. The RTI Act cannot be utilized to access information linked to a quasi-judicial proceeding if it is determined that the information requested by an applicant is related to such proceeding (Appeal No.CIC/AT/A/2006/00586; Date of Decision: 18.09.2007). That entire Bench ruling is completely applicable to this situation. As a result, I will not be able to allow the requested information to be disclosed. With these instructions, the appeal is dismissed.