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of <h1>Court Orders Prompt Consideration of Compounding Application under Income Tax Act, Stays Coercive Measures</h1> <h3>M/s AMALGAM NUTRIENTS AND FEEDS LTD., KEYA THARAKAN AND A.J. THARAKAN Versus CHIEF COMMISSIONER OF INCOME TAX, INCOME TAX BHAWAN, ERNAKULAM AND INCOME TAX OFFICER, CORPORATE WARD-1 (1), KOCHI</h3> M/s AMALGAM NUTRIENTS AND FEEDS LTD., KEYA THARAKAN AND A.J. THARAKAN Versus CHIEF COMMISSIONER OF INCOME TAX, INCOME TAX BHAWAN, ERNAKULAM AND INCOME TAX ... Issues involved:1. Recovery proceedings for assessment year 2006-20072. Filing of compounding application under Section 279(2) of the Income Tax Act3. Initiation of prosecution proceedings before considering the compounding applicationAnalysis:1. Recovery proceedings for assessment year 2006-2007:The judgment pertains to a case where the petitioner Company and its directors were facing recovery proceedings for the assessment year 2006-2007. The petitioners claimed to have paid the entire arrears of tax and interest. Subsequently, they filed a compounding application under Section 279(2) of the Income Tax Act before the 1st respondent.2. Filing of compounding application under Section 279(2) of the Income Tax Act:The petitioners filed a writ petition complaining that prosecution proceedings were initiated by the Department before the 1st respondent could consider their compounding application. The petitioners' counsel argued that Section 279(2) of the Act allows for compounding the offense, and the proceedings had been pending for about a year. The learned Standing Counsel, in response, contended that there was no merit in the petitioners' contentions but assured that the 1st respondent would consider the compounding application, subject to its maintainability.3. Initiation of prosecution proceedings before considering the compounding application:The judgment disposed of the writ petition by directing the 1st respondent to consider the Ext.P11 compounding application expeditiously, within a month's time, subject to its maintainability. It was further ordered that the 1st respondent would provide an opportunity for a hearing to the petitioners during the consideration of the application. Additionally, until the compounding application was reviewed, coercive steps by the Department were to be deferred.This judgment reflects the court's intervention to ensure a fair consideration of the compounding application under the Income Tax Act, emphasizing the need for due process and providing an opportunity for the petitioners to present their case before any coercive actions were taken by the Department.
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