M.K. Surendran, S/O. Kunhambo V. Director General of Income Tax Investigation, Madappally Buildings, Ernakulam South, Kochi and Chief Commissioner of Income Tax, I.S. Press, Income Tax Building, Ernakulam and Directorate of Income Tax Vigilance (South), Aayakar Bhavan, 8th Floor, Annexe Building, 121, Mahatma Gandhi Road, Nungambakkan, Chennai-34 and Chairman, Central Board of Direct Taxes, North Block, New Delhi and Union of India, represented by the Secretary, Ministry of Income Taxes, New Delhi

WP(C)/15688/2008

AI Insights

The case involves M.K. Surendran, the petitioner, who claimed a reward for providing information that led to a significant tax recovery by the Income Tax Department. The petitioner argued that he was entitled to 10% of the recovered amount (Rs. 3.6 crores), as per the guidelines issued by the Central Board of Direct Taxes in 1993. However, he received only Rs. 2.75 lakhs. The department's response indicated that the petitioner had been compensated in accordance with the guidelines, and any grievances could be addressed to the appellate authority. The petitioner contested the adequacy of the response and the handling of his appeal, leading to this writ petition.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 807540 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-06-2009
• Assessment Year: misc
• Laws Referred To: Guidelines for Grant of Reward for Informants, issued by the Central Board of Direct Taxes in 1993
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH; P PARAMESWARAN NAIR
• Assessee Lawyers: C KHALID; N GOPINATHA PANICKER; R O MUHAMED SHEMEEM; T P SAJID
• Keywords: Income Tax; Legal right; Tax Recovery; Informer; Reward

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 8TH JUNE 2009 / 18TH JYAISHTA 1931 WP(C).No. 15688 of 2008(P) -------------------------------------- PETITIONER: ------------------- M.K.SURENDRAN, S/O.KUNHAMBU, AGED 42 YEARS, \"M.K.HOUSE\", CHALA, 12TH KANDY, THOTTADA P.O, KANNUR-7. BY ADVS. MR.C.KHALID, MR.N.GOPINATHA PANICKER, MR.R.O.MUHAMED SHEMEEM, MR.T.P.SAJID. RESPONDENTS: ------------------------ 1. THE DIRECTOR GENERAL OF INCOME TAX INVESTIGATION, MADAPPALLY BUILDINGS, ERNAKULAM SOUTH, KOCHI. 2. THE CHIEF COMMISSIONER OF INCOME TAX, I.S.PRESS, INCOME TAX BUILDING, ERNAKULAM. 3. DIRECTORATE OF INCOME TAX VIGILANCE (SOUTH), AAYAKAR BHAVAN, 8TH FLOOR, ANNEXE BUILDING, 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAN, CHENNAI-34. 4. THE CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK, NEW DELHI. 5. UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF INCOME TAXES, NEW DELHI. R1 TO R4 BY MR. JOSE JOSEPH, S.C, R5 BY MR.P.PARAMESWARAN NAIR,ASST.S.G. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08/06/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P. (C) No. 15688 of 2008 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 8th day of June, 2009 JUDGMENT The petitioner claims to be a recognized “informer” to the Income Tax authorities, on whose information, the departmental authorities conducted a raid and collected incriminating documents from the business premises and residence of the concerned evader of Income Tax. The case of the petitioner is that, the tax recovery resulted because of the contribution of the petitioner being of Rs. 3.6 crores as reward, the petitioner is entitled to have 10 % of the said amount i.e. 36 lakhs as reward, in tune with the relevant guidelines (Guidelines for Grant of Reward for Informants, issued by the Central Board of Direct Taxes in 1993) whereas the petitioner was given only 2.75 lakhs. 2. In response to Ext.P12 lawyers' notice, the first respondent sent Ext.P13 reply, stating that granting of the benefit is in tune with the relevant 'guidelines' and to the extent the petitioner is actually entitled to have the benefit. It was also stated in Ext.P13 that, if the petitioner is aggrieved in any manner, he could very well approach the 4th respondent/appellate authority in this regard. Petitioner has approached this Court, challenging the inaction on the part of the 4th respondent, despite preferring Ext.P14 appeal in this regard. 3. A statement has been filed from the part of the first respondent seeking to sustain the stand taken by the department, also pointing out WP (C) No. 15688 of 2008 : 2 : in paragraph 11 that, the appeal preferred by the petitioner has already been considered and disposed of, and that the petitioner was conveyed to the petitioner through Ext.R1(A) dated 1.8.2007. A copy of the minutes of the Committee dated 19.9.2006 is also produced and marked as Ext.R1(B). It is contended that the petitioner does not have any legal right to claim the reward as a matter of right, as per the law declared by Apex Court, as well as by this Court on the point. 4. It is true that the legal position as above cannot be in dispute any further. But the point involved is whether Ext.P14 appeal preferred by the petitioner has been considered and disposed of in accordance with the 'guidelines' as offered and stipulated vide Ext.P13 reply. 5. Ext. R1(A) intimation conveyed to the petitioner shows that it was only with reference to the letter dated 29.6.2007 of the 4th respondent; whereas Ext.R1(B) attached along with it, is dated 19.6.2006. That apart, Ext.R1(B) shows that, it is in respect of the proceedings granting “final award” pursuant to the proposal submitted by the Director of Income Tax (Inv.), Kochi and not with reference to Ext.P14 appeal preferred by the petitioner. Besides this, no opportunity of hearing was given to the petitioner before finalizing Ext.P14. 6. After hearing both the sides, this Court finds that, Ext.P14 has to be reconsidered by the fourth respondent with reference to the WP (C) No. 15688 of 2008 : 3 : relevant 'guidelines' and also with regard to the actual facts and figures. Accordingly, the Writ Petition is disposed of, directing 4th respondent to reconsider Ext.P14 appeal preferred by the petitioner, after giving an opportunity of hearing to the petitioner, as expeditiously as possible, at any rate, within a period of 3 months from the date of receipt of a copy of this judgment. Disposed of as above. P. R. RAMACHANDRA MENON, JUDGE kmd "