Informant Scheme 2018 and Evasion Petition Procedure
‘Guidelines for grant of rewards to Informants, 2007’, as was issued in 2007 vide Board’s letter referred above, has been revised and “Income Tax Informants Rewards Scheme, 2018” has been issued in supersession of it with effect from date of issue.
Procedure of furnishing information by Informant
A person who wants to give information of substantial tax evasion in expectation of reward under this scheme may contact the DGIT (Inv.) (Directorate General of Income Tax Investigation )/PDIT (Inv.) ( Principal Director of Income Tax) /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 in Annexure – A by 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.
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.
Finality of Decision
The decision of PDIT (Inv) will be final in the matter of allotment of Informant Code under this Scheme.
For foreign persons
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 email@example.com with a copy to firstname.lastname@example.org for further action.
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 (Annexure-A).
4.5. If an informant furnishes information in respect of more than one group of cases, the prescribed form at Annexure-A 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.
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.
Dist. (Inv) are presently posted at Ahmedabad, Vadodara, Surat, Rajkot, Bengaluru, Mangalore, Hubballi, Panaji, Bhopal, Indore, Jabalpur, Raipur, Chandigarh, Mohali, Faridabad, Gurgaon, Ludhiana, Jalandhar, Chennai, Madurai, Coimbatore, Hyderabad, Vizag, Vijayawada, Bhubaneswar, Jaipur, Jodhpur, Udaipur, Kochi, Thiruvananthapuram, Kolkata, Guwahati, Lucknow, Kanpur, Agra, Varanasi, Meerut, Ghaziabad, Dehradun, Mumbai, Delhi, Patna, Pune, Thane, Nagpur and Kolhapur. Name and address of offices from where contact details of JDsIT (Inv) can be obtained are given in Annexure – B.
The informant shall be given a unique Informant Code and the person will always be identified on the basis of that Informant Code.
Liability for false evidence
It should be noted that furnishing false information/evidence is an offence and a person giving false information/evidence/statement will be liable to be prosecuted for such offence.
Reward is granted in two stages : Interim and final
Under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015
- 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 Rupees 50,00,000 (Rupees Fifty Lakh or five million) to an informant for the information given at a time in a single Annexure – A 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.
Under the Income Tax Act, 1961 ( fixed rate 1%, variable ceiling limit depending upon amount of cash seized)
- 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 Rupees 10,00,000 (Rupees Ten Lakh or one million) to an informant for the information given at a time in a single Annexure – A 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 Rupees 1,00,00,000 (Rupees one crore or Ten million) as undisclosed income/asset during search & seizure action u/s 132 of the Income-tax Act, 1961, the ceiling of interim reward shall be Indian Rupees 15,00,000 (Rupees Fifteen Lakh or One and half million) even though the rate will be same at 1% as above.
Timeline for payment of interim reward
Under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015
Within four months of completion of the relevant assessments under sub section (3) or (4) of Section 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
Tax Evasion Petition- to be filed under the E-Portal
Procedure for filing a tax evasion petition.
File complaint under the ‘Submit Tax Evasion Petition or Benami Property holding’ through a link on the e-filing website of the Department https://www.incometaxindiaefiling.gov.in/ under the head “Submit Tax Evasion Petition or Benami Property holding “.
- The facility allows for filing of complaints by those who are existing PAN/Aadhaar holders as well as for those having no PAN /Aadhaar.
- After an OTP based validation process (mobile and/or email), the complainant can file complaints in respect of violations of the Income- tax Act, 1961, Black Money (Undisclosed Foreign Assets and Income) Imposition of Tax Act, 1961 and Prevention of Benami Transactions Act (as amended) in three separate forms designed for the purpose.
The complainants are required to choose whether:
(i) If they want to file a simple complaint regarding tax evasion, foreign undisclosed income/asset, benami property without claim for reward or
(ii) If they want to become informer and claim reward
The facility allows for filing of complaints by persons who are existing PAN/Aadhaar holders as well as for persons having no PAN /Aadhaar.
After an OTP based validation process (mobile and/or email), the complainant can file complaints in respect of violations of :
(i) the Income- tax Act, 1961,
(ii) Black Money (Undisclosed Foreign Assets and Income) Imposition of Tax Act, 1961 and
(iii) Prevention of Benami Transactions Act (as amended)
There are three separate forms designed for the above purpose”
(i) Form-1 Complaint regarding Tax Evasion
(ii) Form-2 Complaint regarding Undisclosed Foreign Assets, and
(iii) Form-3 Complaint regarding Benami Properties/Transactions
Upon successful filing of the complaint, the Department will allot a unique number to each complaint and the complainant would be able to view the status of the complaint on the Department’s website.
Upon a stark analysis of the various formats of disclosing tax evasion. The above mentioned two broad procedure formulates the exhaustive list.
- Tax evasion petition filed through the e-portal of the Income tax department
- Submission of complaint under the INCOME TAX INFORMANTS REWARDS SCHEME, 2018.
For ease and convenience the tax evasion petition is filed in the income tax e-portal. Where the option is availed to the informer, whether he/she wants to get rewarded for the information they are providing. Following few other procedural steps such as providing PAN/Aadhar details. The informer is then asked to fill Form 1 ‘Complaint Regarding Tax Evasion’. Upon successful filing of the complaint, the Department will allot a unique number to each complaint and the complainant would be able to view the status of the complaint on the Department’s website.
However in the case of the Informant Reward Scheme 2018. The procedure is described as above, the relevant difference between the scheme and petition is that the disclosure is made to the JDIT/DGIT/PDIT(Investigating) of the Income tax and the matter is then referred to the JDIT(inv) who inturn would admit the matter or reject the matter. The decision of PDIT (Inv) will be final in the matter of allotment of Informant Code under this Scheme.
Applicability of RTI on scheme and petition
Information in respect of investigation carried out by office of Directorate General of Income Tax (Investigation) in respect of TEP is not required to be intimated to complainant as said office is outside purview of RTI Act, 2005; only broad outcomes after completion of investigation could be communicated only when directed by High Court
Even in the case of Shri Brij Ballabh Singh vs. DGIT (Investigation), Lucknow that complete disclosure of the outcome of a certain TEP can be misused and thus only a broad outcome can be provided as information to the initiator of the TEP. Thus, in case of information requested on the status of a TEP, the broad outcome can be provided without disclosing the details of the investigation and any other data that could hamper the process of investigation.
Therefore whether RTI can be filed for seeking status of Tax Evasion petition – Yes. Whether the RTI can be filed for seeking the status of the reward amount.
However the same is not the case with the Informant Rewards Scheme 2018. The Central Board of Direct Taxes or the Income Tax Department does not provide feedback and/or update on the information received or subsequent actions taken thereon. Disclosure of information regarding specific taxpayers is prohibited except as provided under Section 138 of the Income-tax Act, 1961 and under Section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, read with Section 138 of the Income-tax Act 1961 Directorates General of Income Tax (Investigation) are exempt from providing information under Section 24 of the Right to Information Act, 2005 read with Second Schedule thereof.
Efficiency of the system. Pending and sitting on Information
In case of any grievance in the Informant Rewards Scheme 2018, the informant may contact the PDI1 (Inv) concerned who shall take necessary steps to redress the grievance expeditiously.
“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.”
Therefore it can be said that there lies a certain amount of discretion with the PDIT to sit on the information and not take any actions upon the said information to reopen the assessment or conduct any raid or search & seizure against the assessee in question, which may cause imparity to justice. Furthermore on non-application of the RTI act, the same cannot be brought in check by the informant.
Thus on a comparative note, the Tax Evasion petition stands as a more proactive and vigilant form of mechanism in order to curb the tax evasion practices.