The RTI and Income Tax Returns

The recent decision of the Central Information Commission in the Escorts case, has led to many raised eyebrows. In sum, the CIC held in Mr. Rakesh Gupta v. Public Information Officers (Decision No. CIC/LS/A/2009/000647/SG/5887, available here), that the information submitted to the Income Tax Department by a company cannot be personal information, and even personal information submitted by the director of a company can be disclosed on an RTI application.

The RTI application asked for the disclosure of income tax assessment records of Escorts Heart Institute and Research Centre and its promoters Dr Naresh Trehan and Rajan Nanda. Under the section 3 of the Act, all citizens have a right to ‘information’. Information is defined in section 2(h) as meaning “any material in any form … and information relating to any private body which can be accessed by a public authority under any other law for the time being in force” (emphasis supplied). The information being sought in this case was the income tax returns filed by Escorts and its promoters- Dr Naresh Trehan and Rajan Nanda. Thus, it clearly fell within the meaning of the term ‘information’ which ‘can be accessed by a public authority’, and hence, the applicant Rakesh Gupta had a prima facie right to it under section 3. However, there are two categories of exemption clauses under the Act, section 9 (which deals with infringement of copyright) and section 8 (which deals with general exemptions). Section 9 being irrelevant to this discussion, the CIC focussed on the different clauses under section 8, and discussed whether they would apply to the facts of the case.

Of the several exemptions contained in section 8, five were discussed by the CIC. Section 8(b) exempts “information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court”. This provision was rightly held to be inapplicable since there was no prohibition on disclosure by any Court or Tribunal in relation to the information sought. Section 8(d) exempts “information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information”. The CIC rejected this contention relying on its earlier decision in Shivaji Pandurang Raut v. Commissionerate of Income Tax, Pune (Decision No. 511/IC(A)/2007), which had allowed the disclosure of the tax returns of all the assessees in Satara district. However, that decision is distinguishable since the CIC in that case had specifically ordered that the identity of the individual taxpayers should not be disclosed. In any event, the CIC here held that this provision was inapplicable since it had not been established that ‘commercial confidence, trade secrets or intellectual property’ would be disclosed, and that it would harm the competitive position of Escorts. The exemption under section 8(e), relating to ‘information available to a person in his fiduciary relationship’ was also held to be inapplicable since information forming part of tax returns is not made available to the Income Tax Department in fiduciary capacity. Since the tax assessment proceedings were under way, it was also contended that the disclosure would ‘impede the process of investigation or apprehension or prosecution of offenders’, and hence fall foul of section 8(1)(h). However, this was also rightly rejected, on the ground that the mere subsistence of assessment proceedings and investigations is not sufficient to attract the prohibition of the provision.

The final provision considered, which is also the most controversial, was section 8(1)(j), which exempts personal information from disclosure, in certain circumstances. The decision rejected the applicability of this exemption, at two levels. First, with regard to the returns filed by the company, the CIC held that there can be no personal information of a company. While a corporation has personality, the CIC opined that personal information is not the information of any personality. Secondly, the section 8(1)(j) allows disclosure of personal information if it bears a ‘relationship to any public activity or interest’ and does not cause ‘unwarranted invasion of the privacy of the individual’. However, in such cases too, disclosure may be justified if ‘the larger public interest’ justifies such disclosure. The CIC held that information filed as tax returns is given under a statutory obligation, and hence is a public activity. Further, it was observed that seeking information which is furnished under a statutory obligation is also not an unwarranted invasion of privacy. In any event, given that the reopening of assessment after the filing of the RTI application had brought to light income which hadn’t been disclosed earlier, the CIC held that the larger public interest also justifies disclosure, and hence the exemption was inapplicable.

This decision merits comment for two reasons- one on the provisions of the Act, and second on constitutionality of the Act. While the interpretation of the provisions discussed by the CIC seems fairly accurate, it is interesting to note that section 8(1)(g) exempts “information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes” (emphasis supplied). Admittedly, this provision seems intended to protected whistle-blowers. However, on a literal meaning, it is not too far-fetched to apply the latter part of the provision to the filing of tax returns, which can be said to be information given in confidence for the purposes of law enforcement. Further, the distinction drawn between personality and personal seems tenuous, since ‘personal information’ can also be defined as the information belonging to a legal person. The basis on which the CIC decided the issue the way it did was because the term ‘personal’ is commonly used in reference to natural and not legal persons. However, that does not necessarily mean that when used in relation to legal persons, it cannot have a legal meaning. Indeed, information relating to the affairs of the company, the corporate strategy, can comfortably be classified as personal information.

However, far more controversial is the interpretation of the last portion of section 8(1)(j), which allows disclosure of information in public interest, even if it would amount to an unwarranted invasion of privacy. Now, a strong case may be made for why the right to privacy should not be read into the right to life under the Indian Constitution. However, presently, the right to privacy is considered to flow from Art. 21 of the Constitution (right to life), and does not explicitly permit any restrictions in the public interest. Especially since the Act allows public interest to allow unwarranted invasions, the provision seems even more constitutionally suspect. The CIC, being a creature of the RTI Act cannot examine its constitutional validity. However, it was open to it to read down the Act, or atleast maintain a judicious silence on the relationship between the right to privacy and the right to information in public. To the contrary, it suggests that the absence of a legislative enactment codifying the right to privacy indicates that the right to information is meant to trump the right to privacy, an inference that is far from satisfactory. The status of the right to privacy was most recently considered by the Supreme Court in Bharat Shantilal Shah’s case (2008 (12) SCALE 167). The Court validated the provisions of the Maharashtra Control of Organised Crimes Act dealing with the interception of wire, electronic or oral communication, only on the basis that the use of the information thus obtained was for certain limited purposes. The Court held that the right to life can only be restricted by procedure established by law, which is fair, just and reasonable and non arbitrary, fanciful or oppressive. Since the use of the information was regulated due to the safeguards contained in the Act, the provision was held to be constitutional. However, in the case of information obtained through the RTI, there is little, if any, control over the uses for which the information is put. Hence, while the initial disclosure of the information may be in the public interest, its subsequent uses cannot be controlled. Further, the text of section 8(1)(j) allows unwarranted invasions into privacy, the precise meaning of which is unclear.

Thus, in sum, the decision of the CIC seems to be an accurate interpretation of the RTI Act, except for the meaning of ‘personal information’. But, more importantly, some significant constitutional issues also arise from the approach adopted.