Compounding fee governed by filing-date guidelines, while payment and compounding remained available after proceedings began.

For compounding applications, the applicable fee was held to be the rate in force on the date of filing, not a later CBDT circular applied to subsequent applications, so the petitioners' challenge to the fee calculation failed. At the same time, the Court recognised that the statutory power to compound could still be exercised even after proceedings had begun, and there was no inflexible bar on permitting payment of the balance fee. The petitioners were therefore allowed to pay the remaining amount, with credit for sums already paid, and seek compounding of the offences.

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Issues: (i) Whether the compounding fee had to be computed on the basis of the guidelines prevailing on the date of filing of the compounding application or on the date of its acceptance; (ii) Whether the petitioners could still be permitted to pay the compounding fee and have the offences compounded after rejection of the earlier application.

Issue (i): Whether the compounding fee had to be computed on the basis of the guidelines prevailing on the date of filing of the compounding application or on the date of its acceptance.

Analysis: The fee for compounding was treated as statutorily fixed and the dispute raised by the petitioners was based on a later CBDT circular applicable only to applications filed after 01-01-2015. Since the petitioners had filed the application earlier, the applicable rate was the one in force on the date of filing. The attempt to rely on the later reduction in rate was rejected as a matter of convenience and not a legally sustainable basis to displace the governing guidelines.

Conclusion: The compounding fee was correctly required to be calculated with reference to the guidelines in force on the date of filing of the compounding application, and this contention of the petitioners failed.

Issue (ii): Whether the petitioners could still be permitted to pay the compounding fee and have the offences compounded after rejection of the earlier application.

Analysis: The power to compound under Section 279(2) was noted to be available before or after institution of proceedings, and no inviolable period of limitation was found for payment of the fee beyond the time fixed by the authority. In the circumstances, the Court held that the petitioners should be allowed to make payment of the balance amount and obtain compounding, with credit for the amount already paid.

Conclusion: The petitioners were entitled to be permitted to pay the compounding fee and have the offences compounded.

Final Conclusion: The writ petition was disposed of by sustaining the rejection on the fee-calculation dispute, but granting the petitioners a further opportunity to pay the balance compounding fee and secure compounding of the offences.

Ratio Decidendi: For compounding applications, the applicable compounding fee is governed by the guidelines in force on the date of filing of the application, and the statutory power to compound may still be exercised after prosecution has been initiated if the offender complies with the fee requirement.

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