Facts of the Case

The petitioner, Deepak Kr. Singh @ Ajay Kumar, approached the Delhi High Court by filing a writ petition seeking appropriate directions concerning the payment of reward money by the Income Tax Department.

According to the petitioner, he had furnished information to the Income Tax Department in the year 1997. The information supplied by him allegedly led to a search operation conducted by the Department. Since informers who provide useful information resulting in successful detection of tax evasion may be considered for reward under the applicable departmental scheme, the petitioner claimed that he was entitled to consideration for such reward.

Despite the passage of several years after furnishing the information, the petitioner's claim regarding reward money had not attained finality. Aggrieved by the delay in processing his reward claim, the petitioner invoked the writ jurisdiction of the Delhi High Court and sought intervention for expeditious consideration and payment of the reward amount.

During the hearing, counsel appearing for the Revenue informed the Court that the petitioner's claim for reward money was already under active consideration by the competent authority and that a decision was likely to be taken shortly.

 Issues Involved

  1. Whether the Income Tax Department had unduly delayed consideration of the petitioner's reward claim.
  2. Whether the petitioner was entitled to a direction from the High Court requiring the Department to take a decision on the reward claim within a reasonable period.
  3. Whether the Court should issue further directions regarding payment of reward where the Department stated that the matter was already under active consideration.
  4. Whether the Department was required to process the claim expeditiously considering that the information had been supplied several years earlier.

 Petitioner’s Arguments

The petitioner contended that:

  • He had supplied valuable information to the Income Tax Department.
  • The information furnished by him had led to search proceedings by the Department.
  • Under the applicable reward policy and departmental guidelines, his claim deserved proper consideration.
  • Despite the lapse of considerable time since 1997, the reward matter remained unresolved.
  • The delay on the part of the Department was unjustified and caused hardship to him.
  • Appropriate directions should therefore be issued by the High Court requiring the authorities to process and finalize his claim for reward money.

The petitioner effectively sought judicial intervention to ensure that the competent authority did not indefinitely postpone a decision regarding his entitlement to reward.

 Respondent’s Arguments

The Income Tax Department, represented through the Chief Commissioner of Income Tax, submitted that:

  • The petitioner's claim for reward money was under active consideration.
  • The competent authority was already examining the matter.
  • A decision on the reward claim was likely to be taken shortly.
  • In view of the ongoing consideration of the matter, no further substantive directions from the Court were necessary.

The Department thus sought disposal of the writ petition on the basis of its assurance that the claim would be decided expeditiously.

 Court Order / Findings

The Delhi High Court took note of the statement made on behalf of the Revenue that the petitioner's claim for reward money was actively under consideration and that a decision was expected shortly.

The Court observed that in light of this statement, no further adjudicatory directions were required in the writ petition.

However, the Court also considered an important factual aspect, namely that the information leading to the search had allegedly been furnished by the petitioner as far back as the year 1997. Keeping this circumstance in mind, the Court directed that the petitioner's case for reward, if payable, should be processed as expeditiously as possible.

The Court further clarified that the processing of the claim should be completed within a reasonable period and, in any event, not later than three months from the date of the order.

Consequently, the writ petition was disposed of with the above observations and directions.

 Important Clarification

1. Court Did Not Determine Entitlement to Reward

The Delhi High Court did not decide whether the petitioner was actually entitled to receive reward money. The Court merely directed expeditious processing of the claim.

2. Administrative Authority Retained Decision-Making Power

The determination of eligibility, quantum, and admissibility of reward remained within the jurisdiction of the Income Tax Department and the competent authority.

3. Delay Was a Relevant Consideration

The Court specifically noted that the information had allegedly been supplied in 1997. Because of the prolonged delay, the Court emphasized the need for prompt disposal of the reward claim.

4. Writ Jurisdiction Used to Prevent Administrative Delay

The case illustrates how the High Court may exercise writ jurisdiction under Article 226 to ensure that pending administrative matters are decided within a reasonable timeframe.

5. Reward Schemes Do Not Automatically Confer Payment

Even where information is supplied by an informer, actual payment depends upon satisfaction of the conditions prescribed under the applicable reward scheme and the decision of the competent authority.

Sections Involved

  • Article 226 of the Constitution of India (Writ Jurisdiction)
  • Income Tax Department Informer Reward Scheme / Administrative Guidelines relating to reward payments to informers
  • Administrative powers of the Chief Commissioner of Income Tax regarding grant of reward

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2003:DHC:8273-DB/DKJ04092003CW37012003_153916.pdf

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