Central Information Commission, Wing ‘B', New Delhi

MS. ANUMEHA

C/o Association for Democratic Reforms

v.

CHIEF Commissioner of Income Tax – XI

New Delhi

A.N. Tiwari, Information Commissioner

CIC/AT/A/2007/01029,01263 to 01270

April 29, 2008

Section 8 of the Right to Information Act, 2005 – Right to information and obligations of public authorities – Exemption from disclosure of information – Whether an information, which is otherwise exempt, can still be disclosed if public interest so warrants – Held, yes – Whether since political parties influence exercise of political power, transparency in their organization, functions and more particularly, their means of funding is a democratic imperative, and, therefore, is in public interest – Held, yes – Whether, therefore, insofar as income-tax returns of political parties contain funding details, these are liable for disclosure – Held, yes – Whether therefore, public authorities were to be directed to provide, appellant income-tax returns and assessment orders pertaining to political parties as asked for by her, however, there should be no disclosure of PANs of such parties in view of possibility of fraudulent use of such disclosure – Held, yes

FACTS

The appellant filed an application under the provisions of the Act before the competent authorities seeking information as to whether the political parties mentioned in her application had submitted their income-tax returns for the years 2002-03 to 2006-07; PAN Numbers. allotted to those parties; and copies of the returns filed by those parties for said years along with the corresponding assessment orders, if any. The authorities concerned, however, declined to divulge the information citing various reasons including that the information was exempt under section 8 since it contained details and particulars of commercial activities of the political parties; that no public interest was involved in the disclosure of said information; that making PAN number public could resulting misuse of the same by other persons; that the information related to third parties who had objected to the disclosure of that information; and that the information was subject confidentiality under section 138 of the Income-tax Act, 1961. On appeal, the appropriate appellate authorities dismissed the same.

HELD

Political parties are an unique institution of the modern Constitutional State. These are essentially civil society institutions and are, therefore, non-governmental. Their uniqueness lies in the fact that in spite of being non-governmental, political parties come to wield or directly or indirectly influence, exercise of governmental power. It is this link between State power and political parties that has assumed critical significance in the context of the Right of Information ― an Act which has brought into focus the imperatives of transparency in the functioning of State institutions. It would be facetious to argue that transparency is good for all State organs, but not so good for the political parties, which control the most important of those organs. For example, it will be a fallacy to hold that transparency is good for the bureaucracy, but not good enough for the political parties which control those bureaucracies through political executives. [Para 28]

In modern day context, transparency and accountability are spoken of together ― as twins. Higher the levels of transparency, greater the accountability. This link between transparency and accountability is sharply highlighted in the preamble to the Act. [Para 29]

The Act aims at expanding accountability through transparency at all levels of governance. It is difficult to be persuaded by the argument that though political parties control the political executive ― who are their appointees ― these parties should be allowed to be insulated from the demands of transparency. In other words, political parties be allowed to escape the obligations / norms transparency imposes, and inferentially, escape accountability, even though these parties almost always influence and, frequently control, State power through the organs of the State. That shall be an unacceptable proposition ― especially in a democracy ― as accountability is the underpinning of the actions of all stake-holders who have anything to do with State power. [Para 30]

The laws of the land do not make it mandatory for political parties to disclose the sources of their funding, and even less so the manner of expending those funds. In the absence of such laws, the only way a citizen can gain access to the details of funding of political parties is through their income-tax returns filed annually with income-tax authorities. This is about the closest the political parties get to accounting for the sources and the extent of their funding and their expenditure. There is unmistakable public interest in knowing these funding details which would enable the citizen to make an informed choice about the political parties to vote for. The Act emphasizes that “democracy requires an informed citizenry”, and that transparency of information is vital to flawless functioning of constitutional democracy. It is nobody’s case that, while all organs of the State must exhibit maximum transparency, no such obligation attaches to political parties. Given that political parties influence the exercise of political power, transparency in their organization, functions and, more particularly, their means of funding is a democratic imperative, and, therefore, is in public interest. Insofar as the income-tax returns of political parties contain funding details, these are liable for disclosure. [Para 38]

In fact provision for disclosure of such information exists in the Income-tax Act itself. Section 138(1)(b) empowers the Commissioner of Income-tax to disclose, ‘in public interest’, any information which comes into the hands of the public authority. [Para 39]

What that section states is that any information in the hands of the income-tax authorities would be ordinarily held as confidential, but can be made public, if in the judgment of the Commissioner of Income-tax, it serves public purpose. Therefore, the contention that all income tax returns ― an information provided by the assessees to income tax authorities ― are permanently barred from disclosure, is not correct. This information can be disclosed in public interest, either in a given case, or a class of cases, under Income tax laws. There is public interest in disclosing the class of information, viz,. income-tax returns of the political parties. [Para 40]

It is true that section 138 of the Income-tax Act provides for disclosure of certain information, but so does the Act. In the instant case, the appellant had exercised her option and had submitted application under the RTI Act and not under the Income-tax Act. If the appellant were to be prevented from availing her right under the RTI Act, it would amount to rendering infructuous the right conferred by the Act on a citizen. Commission can never become an instrument of such denial. Every citizen is entitled to seek the information from the Income-tax Department either under the Income-tax Act or under the RTI Act and, thus, he has a choice, which once exercised should be recognized and respected. [Para 41]

From the provisions of section 3 and section 22, read in the context of the preamble of the Act, it can be inferred that a citizen is entitled to access information available with and held by a public authority unless:-

(a) such information is exempted under section 8 or section 9;

(b) the information relates to an organization exempted under section 24 subject to exceptions provided for in the proviso to sub-section (1) in case of an organization established by the Central Government and sub-section (4) in the case of an organization established by State Governments;

(c) information which relates to or has been supplied by a third party and has been treated as confidential by that third-party. In case such an information is intended to be disclosed, the procedure set out in section 11 need to be followed. [Para 44]

The scheme of the Act makes it abundantly clear that disclosure of information to a citizen is the norm and non-disclosure by a public authority an exception and it necessitates justification for any decision not to disclose an information. [Para 45]

In the instant case, the information asked for was available with the Public Authority, i.e., Income-tax Department and was asked for by a citizen. The information related to various political parties and had been provided by them to a public authority in obedience to the provisions of law. The Commission has been consistently holding that the income-tax returns and other details concerning an assessee are not to be disclosed unless warranted by requirements of public purpose. [Para 46]

Thus, an information which is otherwise exempt, can still be disclosed if the public interest so warrants. [Para 47]

Political financing and its potentiality for distorting the functioning of the Government, has been the subject of wide public debate in contemporary democracies. It is recognized that political parties do need large financial resources to discharge their myriad functions. But this recognition is tinged with the apprehension that non-transparent political funding could, by exposing political parties, and through it the organs of the State which come under the control or its influence, to the corrupting influence of undisclosed money, can inflict irreversible harm on the institutions of the Government. There is public purpose in preventing such harm to the body-politic. [Para 48]

Transparency in funding of political parties in a democracy is the norm and must be promoted in public interest. In the instant case, that promotion was being effected through the disclosure of the income-tax returns of the political parties. [Para 49]

Therefore, the public authorities were to be directed to provide to the appellant. Income-tax returns of the political parties and the assessment orders for the period mentioned by the appellant in her RTI application but the PAN of those political parties whose income-tax returns were to be divulged to the appellant would not be disclosed. In view of the fact that there was a possibility that such disclosure could be subjected to fraudulent use, reports of which have lately been appearing. Therefore, while income-tax returns and the assessment orders pertaining to political parties be disclosed, there should be no disclosure of the PANs of such parties. [Para 50]

Appeal was to be allowed. [Para 51]