INCOME TAX INFORMANTS REWARDS SCHEME, 2018

[Mr. M. GOVINDARAJAN]

The reward scheme for informants, named `Guidelines for grant of rewards to Informants, 2007′, as was issued in 2007 vide Board’s letter F. No. 292/2/1998-IT (Inv. III) dated 29.11.2007.  The same has been revised and “Income Tax Informants Rewards Scheme, 2018” has been issued in supersession of it with effect from date of issue vide letter F. No. 292/62/2012-IT (Inv.III)/26, dated 23.04.2018.

Information

The term ‘information’ is defined as including material in any form, such as records, documents, e-mails, data held in any electronic form and photographs which are relevant for detection of undisclosed income under Income-tax Act, 1961 and/or Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, provided either in person or by email or letter in accordance with this scheme.

Information given in any other manner, e.g., WhatsApp or SMS or phone or post on social networking site or publishing letter in newspaper or any other media, etc. shall not be treated as information.

In case it is found that the antecedents of the informant, nature of the information furnished by him in past and his conduct justify not taking cognizance of the information furnished by him, the matter shall be referred by the JDIT (Inv) to the PDIT (Inv) concerned and, if approved by the PDIT (Inv), it would be open to the JDIT (Inv) to ignore the information furnished by the informant.

Informant Code 

A person will be considered an informant for the purposes of this Scheme only if he has furnished specific information of substantial tax evasion in a written statement in the prescribed form in Annexure A to this scheme.    Based upon which, an Informant Code has been allotted to him by the prescribed authority.  The informant shall be given a unique Informant Code and the person will always be identified on the basis of that Informant Code. In Annexure B to this Scheme, the list of officers and addresses where contact details of JDIT (Investigation), to whom information is to be given, is available.

A person cannot claim any reward under the scheme if he is not an informant under the scheme, even if such person has furnished specific information of income or assets in any other manner, e.g., through letter, e-mail, CD, WhatsApp, SMS, phone, posting in social networking site or publishing letter in newspaper or any other media.

Secrecy of information

Identity of the informant, the information given by him (including all related documents/annexure) or the reward paid to him shall not be disclosed to any person/authority except when expressly required under any law for the time being in force or by order of any court of law. The documents/annexure relating to identity and information shall remain confidential and be dealt with accordingly. After allotment of Informant Code, the person shall be identified with Informant Code only.

Information by individual

•   A person who wants to give information of substantial tax evasion in expectation of reward under this scheme may contact the DGIT (Inv.)/PDIT (Inv.)/JDIT (Inv.) concerned. 
• If he appears before DGIT (Inv.)/PDIT (Inv.), they will direct him to appear before JDIT (Inv.) concerned to furnish the information in the prescribed form (Annexure-A).
• If the jurisdictional JDIT (Inv) considers the information prima facie actionable, the person shall have to submit the information in prescribed format appearing in person before the JDIT (Inv), when called.
• In case of any difficulty, the person desirous of giving specific information may contact the PDIT (Inv) of the area. 
• The decision of PDIT (Inv) will be final in the matter of allotment of Informant Code under this Scheme.
• Where a person gives information to an Income Tax Authority other than DGIT (Inv.)/ PDIT (Inv.)/JDIT (Inv.), such person should be asked to contact the DGIT (Inv.)/PDIT (Inv.)/JDIT (Inv.) concerned, and thereafter, the aforesaid procedure, as the case may be, for receiving the information is to be followed by these authorities.

Information by a foreign person

Where a foreign person wants to give information of undisclosed foreign income/ assets of a person liable to tax in India, he may contact the Member (Investigation), CBDT, North Block, New Delhi-110001 either in person or by post or by a communication at email id member.inv@incometax.gov.in with a copy to citinv-cbdt@nic.in for further action.

Information by group of persons

If the information is furnished by a group of informants (more than one informant working together), the prescribed form, statements, etc. must be filled and signed by all such informants, jointly and Informant code will be allotted to each of them separately. The reward payable in such cases shall be disbursed in equal proportion, unless specified otherwise by such informants at the time of furnishing information in the prescribed form.

If an informant furnishes information in respect of more than one group of cases, the prescribed form shall be filled and signed separately for each such group. However, in such a situation the Informant Code for such informant shall remain one and the same.

Obligation on the part of informant

The informant shall be liable to render assistance as may be required by the JDIT (Inv.) or any other investigating officer to whom the JDIT (Inv.) concerned may assign the investigation in the matter of information given by the informant.

False information

Furnishing false information/evidence is an offence and a person giving false information/evidence/ statement will be liable to be prosecuted for such offence.

Award

Award given by the Government to the informant is of two types, viz., interim award and final award.

No reward shall be granted under this scheme to any Government Servant, who furnishes information or evidence obtained by him in the course of normal duties as a Government Servant. A person employed by the Central Government or State Government or Union Territory Government or a nationalized bank or local authority or public sector undertaking, corporation, body corporate or establishment, set up or owned by the Central Government or State Government or Union Territory Government shall be deemed to be a Government Servant for the purpose of this Scheme

Interim award

• Interim reward up to 3% of the additional taxes levied (which is directly attributable to the information furnished by him), under the Black Money (Undisclosed Foreign Income and Assets), Act, 2015, may be granted on statutory determination of undisclosed foreign asset/income following completion of assessment proceedings under sub-section (3) or (4) of section 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, subject to a ceiling of the Indian ₹ 50,00,000 to an informant for the information given at a time in a single form when the authority competent is satisfied that assessment made is likely to be sustained in appeal and taxes levied are likely to be recovered.
• Interim reward up to 1% of the additional taxes realizable, which is directly attributable to the information furnished by the informant, on the undisclosed income detected by the Investigation Directorate under the Income-tax Act, 1961, may be granted subject to a ceiling of Indian ₹ 10,00,000 to an informant for the information given at a time in a single form when the competent authority is satisfied that the additional taxes on the income detected are likely to be recovered.
• Where specific information of unaccounted/undisclosed cash is given by informant which leads to seizure of the cash exceeding ₹ 1,00,00,000 as undisclosed income/asset during search & seizure action under section  132 of the Income-tax Act, 1961, the ceiling of interim reward shall be Indian ₹ 15,00,000 even though the rate will be same at 1% as above.
• The interim award shall be tried to be paid-

• Within four months of completion of the relevant assessments under sub­section (3) or (4) of Section 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in cases where information of undisclosed foreign income/assets is given;
• ithin four months of forwarding of final investigation report by the Investigation Directorate concerned to the Assessing Officer in cases where information of undisclosed income/assets liable under the Income-tax Act, 1961, is given.

• The authority competent to grant interim reward shall be a Committee consisting of the concerned (i) DGIT (Inv.), (ii) PDIT (Inv.) & (iii) JDIT (Inv.). The JDIT (Inv.) concerned shall also act as Secretary of the Committee. Formal sanction order for payment of reward shall be issued by the PDIT (Inv.) concerned.

Final award

• The maximum amount of reward payable to an informant who has furnished information about undisclosed foreign income or assets of a person liable to tax in India under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, shall not exceed 10% of the additional taxes levied and realized under the said Act, which are directly attributable to the information furnished by him, subject to a ceiling of Indian ₹ 5,00,00,000 (after the assessment has become final on the issues relevant for determination of reward by appeals, revision, rectification etc.
• If the informant has claimed reward for giving information of evasion of tax payable under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, as well as benami properties based upon substantially the same facts and has been found eligible for grant of reward under the Benami Transactions Informants Reward Scheme, 2018 as also the Income Tax Informants Reward Scheme, 2018, the total amount of reward under both the schemes taken together shall not exceed ₹ 5,00,00,000.
• The maximum amount of reward payable to an informant shall not exceed 5% of the additional taxes levied and realized, which are directly attributable to the information furnished by him, under the Income-tax Act, 1961, subject to a ceiling of Indian ₹ 50,00,000 after the assessment has become final on the issues relevant for determination of reward by appeals, revision etc.
• If the informant has claimed reward for giving information of evasion of tax payable under Income Tax Act, 1961, as well as benami properties based upon substantially the same facts and has been found eligible for grant of reward under the Benami Transactions Informants Reward Scheme, 2018 as also the Income Tax Informants Reward Scheme, 2018, the total amount of reward under both the schemes taken together shall not exceed ₹ 1,00,00,000.
• The final reward for information of undisclosed foreign income/assets liable under the Black Money (Undisclosed Foreign Income and Assets), 2015 or for information of undisclosed income/assets liable under the Income Tax Act, 1961 shall be processed on realization of additional taxes directly attributable to the information given by the informant. Such processing may be initiated at different stages which may include the following:

•  Where relevant assessments/appeals have attained finality, i.e., against which no appeal/ further appeal/ revision/ rectification etc. is pending or a period of 12 (twelve) months has elapsed from the statutory time limit for filing such appeal/revision/rectification etc., or
• Where relevant case(s) is/are settled by the ITSC by way of order u/s 245D(4) of the Income-tax Act, 1961 and such order has attained finality, i.e., against which no litigation/ rectification etc. is pending and a period of 12 (twelve) months has elapsed from the date of such order of ITSC; or
• Where the relevant case(s) are under litigation on certain issues but the informant requests for grant of final reward based upon the undisputed additional taxes realized directly attributable to the information furnished by him, till the date of his request and gives an unconditional written undertaking signed in the presence of the JDIT (Inv.) concerned that he will have no further claim of reward in the relevant group of cases.
• The amount of interim reward, if any, already paid shall be reduced while granting final reward.

• Timeline for final reward: All reward granting authorities shall endeavor to pay final reward to an informant eligible for such reward, within six months of fulfillment of the conditions mentioned in this scheme.
• The authority competent to grant final reward shall be a Committee consisting of the concerned: (i) DGIT (Inv.), (ii) PDIT (Inv.); (iii) PCIT & (iv) JDIT (Inv.). The JDIT (Inv.) concerned shall also act as Secretary of the Committee. Formal sanction order for payment of reward shall be issued by the PDIT (Inv.) concerned. 

Award payment to a foreign person

 The reward granted to a foreign person, who is an informant, may be paid by regular banking channel as per guidelines issued by Reserve Bank of India (otherwise than cash), to his bank account in India or abroad, as requested in writing by the Informant, in Indian Rupees or its equivalent US Dollar at the exchange rate prevailing at the time of actual payment of reward. Commission or charges for payment in US Dollar shall be deducted from the gross reward amount granted.

Factors to determine award

The following factors may be considered for grant and payment of interim or final reward-

• Fulfillment of conditions for grant of interim or final reward, as the case may be, mentioned in this scheme.
• Accuracy and precision of the information furnished by the informant.
• Extent of usefulness of information including supporting documents etc. provided by the informant.
• Extent and nature of assistance rendered by the informant in detection of undisclosed income/asset.
• In case of final reward, the amount of additional taxes levied and realized on the undisclosed income/asset detected, which is directly attributable to the information received from informant.
• Risk and trouble undertaken and expenses incurred by the informant in securing and furnishing the information

Reward in accordance with this scheme shall be ex-gratia payment, which subject to this scheme, may be granted in the absolute discretion of the authority competent to grant reward. The decision of the authority shall be final and it shall not be subject to any litigation, appeal, adjudication and arbitration except review as provided below in this Scheme.

Ineligibility of award

No reward shall be granted to an informant under certain circumstances which may include the following:

• Where the information is not provided in accordance with the Scheme
• If terms and conditions of the scheme are not fulfilled; or
• Where the information given is not of substantial tax evasion; or
• Where the information given is vague/non-specific and/or of general nature; or
•  Where the information given is already available with the Income Tax Department; or
• Where the information is not received directly from the informant but through any organization other than Income Tax Department; or
• Where additional taxes on the undisclosed income detected are not directly attributable to the information given by the informant; or
• Where Income Tax Department has evidence that the information given by the Informant has been shared by him or any other person authorized by him, with any other entity/agency including media; or
• In respect of incidental or collateral benefit which may arise to revenue in any other case as a result of the information furnished by the informant.

Assignment of award

Since the reward under this scheme is in the nature of an ex-gratia payment, no assignment thereof made by the informant will be recognized. The authority competent to grant reward may, however, grant reward to the legal heirs or nominees of an informant, who has passed away. But the provisions of the Scheme shall apply to the heir as would have applied had the informant not died. For this purpose, the informant shall specify nominee at the time of furnishing the information. If there are more than one legal heirs or nominees, the reward amount shall be distributed in equal share unless indicated otherwise in the form or the right is relinquished by any or more of the legal heirs

Grievance redressal

In case of any grievance the informant may contact the PDIT (Inv) concerned who shall take necessary steps to redress the grievance expeditiously.

Review petition

• In case an informant alleges grave injustice in the decision of the competent authority for final reward due to either non-adherence to the Reward Scheme issued by the Board or due to factual incorrectness, he may file a review petition within one month of receipt of the decision, before the DGIT (Inv).
• In such petition he has to clearly bring out the basis of the alleged grave injustice with specific reference to the provisions of the Reward Scheme which have not been followed by the reward committee or instances of factual incorrectness.
• No cognizance will be taken of a review petition if it is not mentioned as to which provision of Reward Scheme was not followed or instances of factual incorrectness and if the same is not explained clearly.
• The DGIT (Inv) shall cause such a petition to be placed before a review committee consisting of (i) the Principal CCIT (CCA) of the region where the reward committee was located, (ii) a CCIT nominated by the Principal CCIT (CCA) and the (iii) the DGIT (Inv) concerned. In case there is no CCIT in the region, the Principal CCIT may nominate a Principal CIT in the review committee.
• The review committee shall examine such grievance, take necessary action and communicate decision to the informant preferably within 3 months of receipt.