No hearing right before CBDT in compounding requests under income-tax law; Board's role is limited to prior approval.

Compounding of offences under section 279 of the Income-tax Act is an exceptional discretionary remedy available after prosecution is launched and remains subject to previous approval by the Board. The applicant may be heard by the authority considering the compounding request, but the Board's role is limited to examining the materials forwarded through that authority. The statutory scheme does not express or imply any right to a personal hearing before the Central Board of Direct Taxes, and the hardship-relief principle applied in the section 119 context does not govern this process. Accordingly, rejection of the compounding request was upheld as valid.

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Issues: Whether an assessee seeking compounding of offences under section 279 of the Income-tax Act, 1961 had a right to be heard before the Central Board of Direct Taxes rejected the request for prior approval.

Analysis: The scheme of section 279 shows that prosecution is launched with the sanction of the prescribed income-tax authority, while compounding after launch is only an exceptional discretion vested in the Chief Commissioner or Director-General, subject to the previous approval of the Board. The applicant may seek a hearing before the authority considering the compounding request, but the Board's role is confined to considering the materials placed before it through that authority. The provision does not create any express or implied obligation on the Board to hear the applicant, and the principle applied in the cited hardship-relief context under section 119 was held to be inapplicable.

Conclusion: No right to be heard before the Central Board of Direct Taxes arises under section 279(2) or the Explanation to section 279(3); rejection of the compounding request was valid.

Ratio Decidendi: Under section 279, compounding of a prosecuted offence is a discretionary exception subject to prior approval, and that statutory scheme does not import a duty to afford the applicant a hearing before the Central Board of Direct Taxes.

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