Disclosure of information relating to assessees.
258(1)
The Board or any other income-tax authority specified by it by an order in this behalf, may furnish or cause to be furnished to—
- (a) any officer, authority or body performing any functions under any law relating to the imposition of any tax, duty or cess, or dealings in foreign exchange as defined in section 2(n) of the Foreign Exchange Management Act, 1999; or
- (b) such officer, authority or body performing functions under any other law, if in the opinion of the Central Government it is necessary so to do in the public interest, as it may specify by notification in this behalf, any such information received or obtained by any income-tax authority in the performance of its functions under this Act, as may, in the opinion of the Board or other income-tax authority, be necessary for the purpose of enabling the officer, authority or body, to perform his or its functions under that law.
258(2)
The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may furnish or cause to be furnished to a person, the information relating to any assessee received or obtained by any income-tax authority in the performance of his functions under this Act,––
- (a) on an application made by such person to the aforesaid authorities in the prescribed form and on being satisfied that it is in the public interest so to do; and
- (b) the decision of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner in this behalf, shall be final and shall not be called in question in any court of law.
258(3)
Irrespective of anything contained in sub-section (1) or (2) or any other law in force, the Central Government may, having regard to the practices and usages, customary or any other relevant factors, by notification, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees except to such authorities as specified in that notification.
Section Summary:
Section 258 of the Income Tax Act deals with the disclosure of information relating to assessees (taxpayers). It empowers the Income Tax Board and other specified authorities to share taxpayer information with other government bodies or authorities under certain conditions. The section also allows for the sharing of information with individuals or entities upon application, provided it is in the public interest. Additionally, the Central Government can restrict the disclosure of information in specific cases.
This section is significant because it balances the need for transparency and information sharing among government agencies with the protection of taxpayer privacy, ensuring that sensitive information is only disclosed when necessary and in the public interest.
Key Changes:
- Expanded Scope of Information Sharing: The section explicitly allows the Income Tax Board or specified authorities to share taxpayer information with other government bodies performing functions under tax laws, foreign exchange laws, or other laws deemed necessary in the public interest.
- Public Interest Disclosure: Under Section 258(2), taxpayer information can now be shared with individuals or entities upon application, provided the Principal Chief Commissioner or Chief Commissioner is satisfied that it is in the public interest.
- Central Government's Overriding Power: Section 258(3) gives the Central Government the authority to restrict the disclosure of taxpayer information in specific cases, overriding other provisions of the law.
Practical Implications:
- For Taxpayers: Taxpayers should be aware that their financial and tax-related information may be shared with other government agencies or, in some cases, with private entities if it is deemed in the public interest. This could impact privacy concerns.
- For Businesses: Businesses may need to prepare for increased scrutiny if their information is shared with other regulatory bodies, such as those dealing with foreign exchange or customs.
- For Government Agencies: This provision facilitates better coordination among government agencies, enabling them to perform their functions more effectively by accessing relevant taxpayer information.
Critical Concepts:
- Public Interest: The term "public interest" is not explicitly defined in the section, leaving it to the discretion of the authorities to determine what constitutes public interest.
- Finality of Decision: Under Section 258(2), the decision of the Principal Chief Commissioner or Chief Commissioner regarding the disclosure of information is final and cannot be challenged in court.
- Overriding Power of Central Government: Section 258(3) allows the Central Government to issue notifications restricting the disclosure of information, even if other provisions of the law permit it.
Compliance Steps:
- For Taxpayers: Ensure that all tax filings and disclosures are accurate and complete, as this information may be shared with other authorities.
- For Individuals/Entities Seeking Information: If you need taxpayer information, submit an application in the prescribed form to the Principal Chief Commissioner or Chief Commissioner, demonstrating that the disclosure is in the public interest.
- For Government Authorities: When sharing taxpayer information, ensure that the disclosure aligns with the conditions specified in Section 258 and any relevant notifications issued by the Central Government.
Examples:
- Example 1: A customs department is investigating a case of undervalued imports. Under Section 258(1), the Income Tax Department can share the importer's tax records with the customs department to assist in the investigation.
- Example 2: A journalist applies to the Chief Commissioner for information about a high-profile taxpayer suspected of tax evasion. If the Chief Commissioner determines that the disclosure is in the public interest, the information may be shared under Section 258(2).
- Example 3: The Central Government issues a notification under Section 258(3) restricting the disclosure of information related to small businesses to protect them from unnecessary scrutiny. In this case, no authority can access such information unless explicitly permitted by the notification.
This section ensures that taxpayer information is shared responsibly while balancing the need for transparency and privacy.