The Government is not bound under the Right to Information law to divulge details about its Income Tax scrutiny policy, used to identify tax payees before subjecting them to detailed investigation.
The Central Information Commission (CIC) held this while accepting the Finance Ministry's view that revealing information related to the scrutiny guidelines would adversely affect economic interests of the country.
"The Finance Ministry at the highest level has analysed the whole issue and has given its considered opinion about the possible effect of disclosure on economic interest of the State," a CIC bench headed by Chief Information Commissioner Wajahat Habibullah said.
The order came on an RTI application of Kamal Anand who sought details from Central Board of Direct Taxes (CBDT) about its instructions issued to I-T assessment officers on scrutiny policy for financial year 2006-07, while also claiming a copy of the policy guidelines for individual tax payers.
The matter, which was taken with the Commission following CBDT's refusal to provide the details, was thereafter referred to the Department of Revenue within the Finance Ministry for its views.
In its submissions before the CIC, the Finance Ministry had said that divulging details about the scrutiny guidelines would affect India's economic interests by making it easy for unscrupulous tax payers to evade taxes.
It was said that the guidelines were meant for use by I-T assessment officers to enforce compliance of tax-payers' liability, and hence there was no public interest attached to such disclosures.
This decision of CIC is in conformity with the practice in the USA. Under Freedom of Information Act, the courts have refused to force Internal Revenue Service to reveal the basis on which the income tax returns are selected for auditing.
The IRS has a computer program that analysizes the tax returns and selects the ones that are most likely to reveal tax evasion by public. The computer program is changed from time to time. After the selection by program, IRS employees go over the returns and further narrow down the number of returns that are actually audited.