Rakesh Kumar Sharma V. The Director General of Income Tax and others

CWP/357/2000

AI Insights

The case involves Rakesh Kumar Sharma, the petitioner, who sought a writ under Article 226 of the Constitution to compel the Director General of Income Tax and others, the respondents, to pay him a reward for providing information that led to the discovery of unaccounted money during raids on two occasions in 1996 and 1998. The petitioner claimed that he provided specific information about M/s Hindustan Agro Tech and M/s Fair Deal House, which resulted in significant recoveries. However, the respondents denied that the petitioner had provided any information, asserting that it was supplied by another undisclosed informant. The court examined the guidelines for reward payments and referenced a Supreme Court decision, emphasizing that rewards are discretionary and not a matter of right.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 820574 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 23-09-2009
• Assessment Year: misc
• Other Referred Cases: Union of India v. C. Krishna Reddy, (2003) 12 SCC 627, Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh, AIR 1977 SC 2149, Lekhraj Satram Dass Lalvanai v. Deputy Custodian-cum-Managing Officer, AIR 1966 SC 334, Dr. Umakant Saran v. State of Bihar, AIR 1973 SC 964
• Laws Referred To: Article 226 of the Constitution, Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SUKANT GUPTA
• Keywords: Discretion of authority; Ex-gratia payment; Income Tax Department; Unaccounted money; Reward for informant
• Section: 226

Judgement Text

"In the High Court of Punjab and Haryana, Chandigarh C.W.P. No. 357 of 2000 Date of Decision: September 23, 2009 Rakesh Kumar Sharma …Petitioner Versus The Director General of Income Tax and others …Respondents CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JASWANT SINGH Present: None for the petitioner. Mr. Sukant Gupta, Advocate, for the respondents. 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This petition filed under Article 226 of the Constitution prays for commanding the respondents to make the payment of reward in lieu of providing information of unaccounted money to the Income-tax Department on two occasions. The petitioner has claimed that he gave the information of income of M/s Hindustan Agro Tech., HSIDC, Sector 3/106, Karnal in the month of September 1996 on the basis of which a search was conducted on 14.10.1996 and 17.10.1996 at the said premises, which resulted in discovery of unaccounted amount of Rs. One Crore. He has further claimed that in April 1998 he again gave information in respect of M/s Fair Deal House, Minar Road, CWP No. 357 of 2000 Opposite Ashoka Cinema, Karnal and a raid was conducted on 22.5.1998. More than Rs. 1.6 crores were recovered this time. According to the petitioner on both the occasion assurances were given by the department that reward would be given to him as per the provisions of the Income-tax Act, 1961 (for brevity, ‘the Act’). Further case of the petitioner is that despite repeated representations and visits no reward has been given to him. Even legal notices were sent on 24.11.1998 and 8.3.1999 (P-2 & P-3) but of no avail. In the written statement filed on behalf of respondent Nos. 1 and 2 it has been specifically denied that no information as alleged by the petitioner was ever furnished by him. In respect of both the instances quoted by the petitioner, it has been stated that some other informant had provided the information whose particulars have not been disclosed for the purpose of secrecy. It has not been disputed that there are guidelines issued by the Central Board of Direct Taxes (CBDT) for grant of rewards to informants. It has been pointed out that in accordance with the said guidelines the reward is purely ex- gratia payment, which may be awarded on the absolute discretion of the authority and cannot be claimed as a matter of right. A separate but identical written statement has also been filed on behalf of respondent No. 3. No replication to the aforementioned written statements has been filed on behalf of the petitioner. Even no one has put in appearance in support of the petition. Having heard learned counsel for the respondent and perusing the paper book we are of the considered view that there is no merit in the instant petition and the same deserves to be dismissed. In paras 3 and 4 the petitioner has made a specific assertion that he had furnished information regarding excessive and concealed income of M/s Hindustan Agro Tech HSIDC, Sector 3/106, Karnal in the month of September, 1996 and got verified the site on 2 CWP No. 357 of 2000 12.10.1996. It has also been asserted that a raid was conducted on 14.10.1996 and on 17.10.1996 in the aforesaid case and the amount of Rs. One crore matured. Likewise, he has quoted another instance for furnishing information of M/s Fair Deal House, Minar Road, Opposite Ashoka Cinema, Karnal in the month of April, 1998. In that case raid was conducted and more than Rs.1.6 crores had matured. However, in paras 2,3 and 4 of the written statement, respondent has controverted the assertion of the petitioner by stating that he did not give information to the respondents as per record of the office although information was provided in respect of M/s Hindustan Agro Tech by some other informer. The particulars of the aforesaid informant have not been disclosed on account of maintaining secrecy. Likewise, in para 3, the assertion of the petitioner has been controverted that he did not give any information in respect of M/s Hindustan Agro Tech. Similar averments have been made in para 4 of the written statement in respect of M/s Deal House, Karnal by alleging that it is not borne out from the record of the respondents. Once the aforesaid factual position itself is clear, the claim of the petitioner cannot be adjudicated especially when after the filing of the written statement by the respondents no counter affidavit has been filed by the petitioner controverting the assertion made by the respondents and by bringing on record the documents in support of the averments made in paras 3 and 4 of the petition. This would have been sufficient to dismiss the petition. The petitioner has failed to place on record any concrete evidence in support of his claim. Moreover, in the written statement the respondents have specifically denied the assertion made by the petitioner to which no replication has been filed. However we proceed to examine the policy instructions regarding payment of reward issued on 30.03.1985, which were revised on 30.03.1989. The petitioner has claimed that he had supplied the information in the month of 3 CWP No. 357 of 2000 September 1996 and then in April 1998, therefore, the revised instructions would govern the issue. In the case of Union of India v. C. Krishna Reddy, (2003) 12 SCC 627, Hon’ble the Supreme Court has held that many factors have to be taken into account by the competent authority before announcing the reward. It further held that the factors like specificity and accuracy of the information, the risk and trouble undertaken, the extent or the nature of help rendered by the informer, whether information gives clues of the person involved in smuggling or their associates, the difficulty in securing the information, the risk involved for the Government servants in working out the case and whether apart from seizure of the contraband goods, the owners/organisers/financers/racketeers have been apprehended. The Supreme Court went on to observe in para 12 as under:- “ The High Court in writ jurisdiction cannot examine or weigh the various factors which have to be taken into consideration while deciding a claim regarding grant of reward. These are matters exclusively within the domain of the authorities of the Department as they alone can weigh and examine the usefulness or otherwise of the information given by the informer. In the writ petition filed by the respondent, no details had been given on the relevant issues. If the grant of reward cannot be claimed as a mater of right it is not understandable as to how a writ of mandamus can be issued commanding the Government to give a particular amount by way of reward. ...............” Hon'ble the Supreme Court further held that a writ of mandamus can only be granted in a case where there is a statutory duty imposed upon the officer concerned and failure on the part of that officer to discharge the statutory obligation. Therefore, it is required to be shown that a statute imposes 4 CWP No. 357 of 2000 a legal duty and the aggrieved party has a legal right under the statute to enforce its performance. The Supreme Court relied upon its earlier judgments rendered in the cases of Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh, AIR 1977 SC 2149; Lekhraj Satram Dass Lalvanai v. Deputy Custodian-cum-Managing Officer, AIR 1966 SC 334 and Dr. Umakant Saran v. State of Bihar, AIR 1973 SC 964. The principles laid down by Hon'ble the Supreme Court in the case of C. Krishna Reddy (supra) when applied to the facts of the present case would show that no direction could be issued to the respondents for rewarding any amount to the petitioner because the respondents have in categorical terms denied that no information was supplied by the petitioner. Therefore, there is no merit in the instant petition. Dismissed. (M.M. KUMAR) JUDGE (JASWANT SINGH) September 23, 2009 JUDGE Pkapoor 5 "