Wa/8/2010 Of The Director General Of Income Tax(Inv) v. M.k.surendran And Another

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 8TH JANUARY 2010 / 18TH POUSHA 1931 WA.No. 8 of 2010() ------------------ AGAINST THE JUDGEMENT/ORDER IN WPC.15688/2008 Dated 08/06/2009 .................... APPELLANT(S): RESPONDENTS 1 TO 4 -------------------------------- 1. THE DIRECTOR GENERAL OF INCOME TAX INVESTIGATION, MADAPARAMBIL BUILDINGS, SOUTH RAILWAY STATION ROAD, KOCHI-16. 2. THE CHIEF COMMISSIONER OF INCOME TAX, I.S.PRESS, CENTRAL REVENUE BUILDING, KOCHI-18. 3. DIRECTORATE OF INCOME TAX VIGILANCE (SOUTH), AAYAKAR BHAVAN, 8TH FLOOR, ANNEXE BUILDING, 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI-34. 4. THE CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK, NEW DELHI. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): PETITIONER & 5TH RESPONDENT ------------------------------------------ 1. M.K.SURENDRAN, S/O.KUNHAMBU, AGED 42 YEARS, " M.K.HOUSE", CHALA, 12TH KANDY, THOTTADA P.O., KANNUR - 7. 2. THE UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF INCOME TAXES, NEW DELHI. R1 BY ADV. SRI.C.KHALID THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. ....................................................................Writ Appeal No.8 of 2010 .................................................................... Dated this the 8th day of January, 2010. JUDGMENT Ramachandran Nair, J. Appeal is filed against judgment of the learned Single Judgedirecting the Chairman, Central Board of Direct Taxes to treat Ext.P14as an appeal and decide the same on the reward payable to firstrespondent for furnishing information which led to unearthing of blackmoney and assessment of the same in the hands of another person.Admittedly, the reward payable is 10% of the tax assessed. Thequestion is what is the tax assessed that is attributable to theinformation furnished by the first respondent. Considering the totalincome assessed and the tax determined, the reward is very low.Therefore, the learned Single Judge directed the Chairman to considerExt.P14 as an appeal and decide the same. Standing Counsel submittedthat there is no appeal provided under the scheme and therefore, thiscourt cannot confer power on the Chairman to consider a representationas an appeal and decide the same. Counsel appearing for the first respondent submitted that information furnished was specific and basedon which only assessment was made on a total income of above Rs.1crore and the assessee has not even filed an appeal. We do not findanything wrong with the learned Single Judge directing the Chairmanof the Board to consider the correctness of the reward treating firstrespondent's representation as an appeal because under Section 119 ofthe Income Tax Act, Board of Direct Taxes is enjoying supervisorypowers over all Income Tax authorities. Therefore, it is a powerinherent in the Board to make correction in regard to reward given on arepresentation or to consider the correctness of reward, whether suomoto or on representation by the aggrieved party. Regarding thecontention of the Standing Counsel that appeal is not maintainable,certainly it would be within the jurisdiction of this court under Article226 of the Constitution of India to consider the correctness or proprietyof the order granting reward because under the guidelines an informantis entitled to reward. However, we feel since the reward is fixed by aCommittee consisting of Chief Commissioner and two other highlyplace 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 membercommittee, which will hear Ext.P14 as an appeal or representationagainst the reward after calling for records and after giving a hearing tothe appellant. The Chairman will take immediate steps for constitutionof the committee which will dispose of the appeal within a period ofthree months from now. In fact, we feel the Board can have a regulararrangement for settlement of dispute in reward matters by a committeeor by itself so that similar cases are not dragged to the courtunnecessarily. Writ Appeal is disposed of as above. C.N.RAMACHANDRAN NAIRJudge V.K.MOHANANJudge