Tax Act and the Anti-Corruption Commission

After the new Income Tax Act 2023 (the Act) was passed, a debate arose as to whether the Anti-Corruption Commission's (ACC) powers were curtailed by the said law. In this piece I argue that the new law did not curtail the powers of ACC. The argument will get clearer as we look into the provisions of the Act in this regard.

Section 309(1) of the Act provides that notwithstanding anything contained in any other law for the time being in force, all particulars or information relating to the statements prepared, returns filed, accounts or documents prepared under the provisions of this Act; any evidence, affidavit or documents produced in the course of any proceedings under this Act; and anything relating to the assessment or return of tax in any proceeding under this Act, shall remain confidential and shall not be disclosed. Under this sub-section, the confidentiality of one's information relating to income tax has been established in an endeavour to protect the right to one's privacy as enshrined in Article 43(b) of the Constitution of Bangladesh. 

The gist of Section 309(2) of the Income Tax Act 2023 is that notwithstanding anything contained in the Evidence Act 1872, Anti-Corruption Commission Act 2004, or any other law, no court or other authority shall order the production by any servant of the Republic of any tax return, accounts or documents, or any part thereof, any record relating to any proceedings taken under this Act, nor shall demand evidence in matters related to such subjects under this law.

Under this sub-section, Both the court and any other authority, e.g., ACC etc. have been debarred from calling up any return, accounts, documents, or records. This sub-section is the general rule which ensures that no information related to the income tax of an individual shall be called for by any authority, be it the court or the ACC. Thus, this sub-section implies that the information is so confidential that even the court cannot call for them, let alone any other authority.

However, the sub-section mentions that 'except as provided in this Act', which means there are exceptions to this general rule. Indeed, sub-section (3) provides that the prohibitions under sub-sections (1) and (2) shall not apply to the publication of any document, or any statement, return account, testimony, affidavit, or deposition required by any authority for investigation of any offenses under the Penal Code 1860 or Anti-Corruption Commission Act 2004.

The proviso to section 309(3) reads that any documents, statements, return accounts, testimonies, affidavits or depositions necessary for investigation may be published or provided only in those cases where the court empowered to take cognizance, orders to that effect. Here, it is true that the ACC cannot access the income tax returns of individuals for investigation without the order of the court; however, this doesn't indicate the curtailment of the powers of the ACC. Before passing the Act, the ACC officers, having been empowered under Section 20 of the Anti-Corruption Commission Act 2004 to search and investigate, could collect income tax-related records by issuing a demand letter or requisition.

Now under the new Act, the ACC is to come through the court in order to obtain the required information. The court shall want to know on what basis they are seeking to obtain the information, and if the ACC can show prima facie reasons, then the court will allow the information to be provided accordingly. It can therefore be argued that the process of obtaining tax-related information by the ACC has only been made indirect through the new Act. While this may look like curtailment of ACC's powers to some, in reality, this stands in alignment with the law's spirit of protecting people's privacy.

The writer is student of law, University of Dhaka.