- (1.) The Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India announced a scheme to be operational from 1st April, 1985 for grant of reward to officers and staff of the Income-tax Department. The scheme postulated the grant of reward under four heads as follows : 2(a) Reward for disposal under Summary Assessment Scheme, 2(b) Reward for scrutiny Wards, 2(c) Reward for search and seizure work , 2(d) Reward for best officers at Tribunal.
(2.) The scheme sets out the quantum of reward, stage of its payment and persons entitled to receive the award amount. It further stipulates that all cases of grant of reward would be examined and approved by competent committees which were constituted. Rule 7 of the scheme, inter alia, provides that the reward shall be payable to the Government servants up to the level of Assistant Commissioner of Income-tax depending on the contribution made by them as a team as well as individually with regard to collection of intelligence, surveillance, effecting seizures and framing of assessments etc. and due credit will be given to the staff employed in investigation and/or prosecution work resulting in conviction of persons involved. It further provides that the competent Committee will decide the manner in which the reward due will be shared between the eligible officers and staff and that the reward will be purely an exgratia payment and the competent committee's discretion shall be final.
(3.) The respondent as an assessing officer Completed the assessment of an assessee M/s. Anand Samrat Company, Secun-derabad for the assessment year 1983-84 by passing assessment order dated 26/27th March 1986 under section 143 (3) of the Income tax Act 1961. In respect of this assessee and its partners, a search had been carried out in July, 1982 resulting in seizure of assets and number of incriminating documents. It seems that after analyzing the seized material and details gathered by the Intelligence Wing, an appraisal report was prepared by the Assistant Director of Inspection (Investigation) and it was forwarded to the Assessing officer along with the seized material. On 6th May, 1985 a return was filed by the assessee for the year 1983-84 which was the year relevant for the search action. The respondent completed the assessment. The total additional income brought to tax after giving effect to the order of the Income-tax Appellate Tribunal was over Rs. 12,00,000/-. According to the appellants, the additions made in the assessment order were based on either the seized material or the report given by the Investigation Wing.;