SHARAD PANDYA vs. CENTRAL BOARD OF DIRECT TAXES

Order 13/07/2022 PER HON’BLE MR. KULDEEP MATHUR, J. The petitioner has filed the present writ petition assailing the validity and propriety of the order dated 03.12.2019 issued by the respondent department whereby his claim for payment of reward under Benami Transactions Informants Reward Scheme, 2018 (hereinafter referred as ‘Scheme, 2018’) was rejected. The sole ground for rejection was that the specific information regarding

(2 of 5) [CW-3502/2022] benami transactions/ property (IES) was not provided in the prescribed format i.e. Annexure-A in terms of Clause 6 (IV) of the Scheme, 2018. Briefly stated facts of the case are that the petitioner provided specific information regarding benami transactions pertaining to one Shri Pratap Kothari and Smt. Lata Kothari, founder of New Look Sr. Sec. School, Lodha, Banswara to Director General of Income Tax (Investigation), Jaipur through the Income Tax Officer, Banswara. The specific information supplied by the petitioner led to action under the provisions of the Income Tax Act, 1961 and The Prohibition of Benami Property Transactions Act, 1988 against defaulting entity/person. The petitioner requested the authorities to grant him reward as per the Scheme, 2018. Aggrieved by the inaction of the respondents in accepting his request for payment of reward, the petitioner filed a representation ventilating his grievances to the PMO. The PMO directed the respondent department to take appropriate action on his pending applications for payment of reward. The office of the Assistant Commissioner of Income Tax (Benami Prohibition),

Jaipur

thereafter

through

the communication dated 03.12.2019, informed the petitioner that the specific information supplied by him was not in the prescribed format as per Annexure-A of the Scheme, 2018 and he was not allotted “Informant Code” by the prescribed authority. The claim for reward thus does not fulfill the requirements of the Scheme for the payment of reward.

(3 of 5) [CW-3502/2022] Learned counsel for the petitioner argued that it is not in dispute that the respondents had acted on the specific information provided by the petitioner and conducted search against the defaulting entity/persons which led to declaration of benami transactions/ properties. The denial of payment of reward to the petitioner for the reason that he did not supply the specific information in prescribed format i.e. Annexure-A of the Scheme, 2018 is totally illegal and arbitrary. The counsel further submitted that the petitioner provided specific information while risking his security and safety and the same has enabled the respondent department to collect huge amount of revenue from defaulters. Per contra, the learned counsel for the respondents, Shri K.K. Bissa argued that for a person to be considered as an “informant” under the Scheme, 2018, he must supply specific information about one or more movable and immovable benami property in prescribed form as per Annexure-A of the Scheme, 2018 and also receive “Informant Code” from the authority prescribed in the scheme. The specific information was not supplied by the petitioner in accordance with the provisions of the Scheme, 2018. Learned counsel for the respondents further submitted that the petitioner vide letters dated 02.07.2018 and 30.08.2018 by the respondent authorities was requested to provide the information in the prescribed proforma to be eligible for reward under the Scheme, 2018. The petitioner however ignored these letters and has failed to make compliance of the mandatory conditions of the Scheme, 2018 for getting the reward. Heard learned counsel for the parties.

(4 of 5) [CW-3502/2022] It is not disputed before us that the specific information provided by the petitioner vide letter dated 15.06.2017 was treated as a Tax Evasion Petition by the office of the Director General of Income Tax (Investigation), Jaipur who in turn forwarded the same to Principal Director of Income Tax (Investigation), Jaipur vide communication dated 30.06.2017 to take necessary action against the defaulting entity/person. The respondent authorities thereafter have acted against defaulting entity/persons as per the provisions of Income Tax Act, 1961 and the Prohibition of Benami Property Transactions Act, 1988. The “Benami Transactions Informants Reward Scheme, 2018” was introduced by the respondent department with an object to obtain people’s participation in the efforts to unearth black money and to reduce tax evasion. This reward scheme is aimed at encouraging people to give information about benami transactions and properties as well as income earned on such properties by such hidden investors and beneficial owners. An informant under the said scheme can get reward upto Rs. 1 crore for giving specific information of benami property. On perusal of the Scheme, 2018 and guidelines framed by the Department for proper implementation thereof reveals that the reward is purely an ex-gratia payment which may be granted on absolute discretion of the authority competent to grant reward. The reward cannot be claimed as a matter of right by any person. It is however manifest that the informants provide information with a legitimate expectation of reward to be received. The denial of reward in valid cases may have a frustrating effect on the object sought to be achieved through the Scheme, 2018 i.e.

(5 of 5) [CW-3502/2022] getting the information of unscrupulous and anti social elements who would cause loss to the government exchequer. In the result, the order/communication dated 03.12.2019 (Annexure-9) issued by respondent is set aside. In the peculiar facts and circumstances of the case, the respondents are directed to obtain information from petitioner under Annexure-A of the Scheme, 2018. The claim thereafter will be adjudged in accordance with the said Scheme by the respondents within a period of 6 months. The writ petition is disposed of in the above terms. No order as to costs. (KULDEEP MATHUR),J (SANDEEP MEHTA),J 61-KshamaD/-