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CA Final · Direct Tax Laws & International Taxation · Provisions to Counteract Unethical Tax Practices

Meera Traders asks the Principal Commissioner of Income-tax under section 258(2) of the Income-tax Act, 2025 for information about a competitor assessee, using the prescribed form. The Principal Commissioner is not satisfied that disclosure is in the public interest and rejects the application. Meera Traders plans to challenge the rejection in a court. What is the correct position?

The Principal Commissioner's decision is final and cannot be questioned in any court. Under section 258(2), information goes to a private applicant only on a prescribed-form application and when the authority is satisfied that disclosure is in the public interest, and its decision on this is expressly made final.

  1. AThe decision is final and cannot be called in question in any court of lawCorrect
  2. BThe decision can be challenged in a civil court within 30 days
  3. CThe information must be furnished because the application was in the prescribed form
  4. DThe decision can be reviewed only by the Central Government by notification

Explanation

Section 258(2) permits furnishing on a prescribed-form application only if the authority is satisfied it is in the public interest. Clause (b) provides that the decision of the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner is final and cannot be called in question in any court of law. Filing in the prescribed form does not create a right to the information.

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