DIRECTOR GENERAL OF INCOME TAX; CHIEF COMMISSIONER OF INCOME TAX; DIRECTORATE OF INCOME TAX VIGILANCE AND THE CHAIRMAN Vs. M K SURENDRAN S/O KUNHAMBU

JUDGEMENT

(1.) Appeal is filed against judgment of the learned Single Judge directing the Chairman, Central Board of Direct Taxes to treat Ext.P14 as an appeal and decide the same on the reward payable to first respondent for furnishing information which led to unearthing of black money and assessment of the same in the hands of another person. Admittedly, the reward payable is 10% of the tax assessed. The question is what is the tax assessed that is attributable to the information furnished by the first respondent. Considering the total income assessed and the tax determined, the reward is very low. Therefore, the learned Single Judge directed the Chairman to consider Ext.P14 as an appeal and decide the same. Standing Counsel submitted that there is no appeal provided under the scheme and therefore, this Court cannot confer power on the Chairman to consider a representation as an appeal and decide the same. Counsel appearing for the first respondent submitted that information furnished was specific and based on which only assessment was made on a total income of above Rs. 1 crore and the assessee has not even filed an appeal. We do not find anything wrong with the learned Single Judge directing the Chairman of the Board to consider the correctness of the reward treating first respondent's representation as an appeal because under Section 119 of the Income Tax Act, Board of Direct Taxes is enjoying supervisory powers over all Income Tax authorities. Therefore, it is a power inherent in the Board to make correction in regard to reward given on a representation or to consider the correctness of reward, whether suo moto or on representation by the aggrieved party. Regarding the contention of the Standing Counsel that appeal is not maintainable, certainly it would be within the jurisdiction of this Court under Article 226 of the Constitution of India to consider the correctness or propriety of the order granting reward because under the guidelines an informant is entitled to reward. However, we feel since the reward is fixed by a Committee consisting of Chief Commissioner and two other highly place officials of the department, it would be better to have the appeal heard by a body consisting of not less than three members of the Board. The Chairman of the Board will, therefore, constitute a three member committee, which will hear Ext.P14 as an appeal or representation against the reward after calling for records and after giving a hearing to the appellant. The Chairman will take immediate steps for constitution of the committee which will dispose of the appeal within a period of three months from now. In fact, we feel the Board can have a regular arrangement for settlement of dispute in reward matters by a committee or by itself so that similar cases are not dragged to the court unnecessarily.