O R D E R

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 22.12.2025 for the Assessment Year (A.Y.) 2022-23 in the proceeding u/s 143(3) r.w.s. 144B of the Income Tax Act (hereinafter referred as “the Act”).

2. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2022-23 on 30.07.2022 declaring total income of Rs.33,190/-. The case was selected for scrutiny and a notice u/s. 143(2) of the Act was issued on 02.06.2023. The assessee is a resident individual deriving income from salary. In the course of assessment, the AO inquired about the receipt of USD 2.18 million by the assessee from US Securities and Exchange Commission (in short “SEC”). The assessee had explained that out of USD 2.18 million received, 50% was retained by the legal team and only balance amount of USD 1.09 million was received by him. Accordingly, the amount of Rs.8,16,27,000/- was credited in the bank accounts of the assessee. As regarding nature of this receipt, it was explained that the assessee undertook a whistle-blower activity to report grave corporate misconduct by his former employer, without any anticipation of reward. According to the assessee, the reward received from US SEC was a windfall gain and a capital receipt and it was not chargeable to tax under the provisions of the Income Tax Act. The AO, however, treated the receipt of Rs. 8,16,27,000/- as income of the assessee under the provisions of section 56(2)(x) of the Act. Accordingly, the assessment was completed u/s. 143(3) r.w.s. 144B of the Act on 15.03.2024 at total income of Rs. 7,91,65,713/-, after allowing eligible deductions under Chapter-VIA of the Act.

3. Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.

4. Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

Ground No. I: Addition of Rs. 8,16,27,000/- received as reward from US Securities and Exchange Commission u/s 56(2)(x) of the Act

1. On the facts and circumstances of case and in law, the Hon’ble CIT(A) erred upholding the addition made by the Assessing Officer’ (“the AO”) of Rs. 8,16,27,000/- received as reward from US Securities and Exchange Commission (“SEC reward”) u/s 56(2)(x) of the Act.

2. The CIT(A) failed to appreciate that the SEC reward is a capital receipt not chargeable to tax under Act.

3. The Appellant prays that the AO be directed to delete the addition made towards the SEC reward of Rs. 8,16,27,000/- as the same is not chargeable to tax.

Ground No. II: Levy of interest u/s 234B and 234D of the Act

1. On the facts and circumstances of case and in law, the CIT(A) erred in confirming the levy of interest u/s 234B and u/s 234D of the Act, respectively.

2. The Appellant prays that the AO be directed to delete the interest levied u/s 234B and U/s 234D of the Act.

Ground No. III: General

1. The appellant craves leave to add, alter and/or amend, withdraw or vary all or any of the above grounds of appeal either before or at the time of hearing of this appeal.

Submissions of the Assessee

5. Shri S. N. Soparkar, the Ld. Senior Advocate, appearing for the assessee, explained that the assessee was employed with [Redacted] (India) Private Limited in 2011, an Indian subsidiary of a U.S based medical equipment company, as Director – Commercial Operations and Marketing (South Asia). During his employment, he identified alleged physician kickback scheme involving public hospitals in India, which violated the Foreign Corrupt Practices Act (FCPA), which was against his conscience and public interest. In March, 2013, the assessee had reported the matter to the [Redacted] Group’s U.S. headquarters, through the internal compliance hotline but no