Compounding of tax offences is within tax authority power; agent-signed returns can bind the principal when factual findings support liability.

Compounding authority under the Income-tax Act extends to offences of making false statements in returns and failure to furnish returns, and compounding may occur before or after institution of proceedings; accordingly, composition by payment under the compounding provision is within tax authorities' power. Where returns and verifications are signed by an agent holding a general power of attorney, principal liability and criminal responsibility depend on factual findings about voluntariness and admission; concurrent findings that the agent's acts bind the principal are dispositive and uphold liability under the relevant offence provisions.

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Issues: (i) Whether the composition of alleged income-tax offences by payment under the Income-tax Act was within the authority of the tax authorities and whether the appellant was liable to prosecution or bound by his agent's actions.

Analysis: The issue concerns the scope of sections 51, 52 and 53 and their application where returns and verifications were signed by an agent holding a power of attorney, and whether compounding under section 53 requires proof that the offence was actually committed. The statutory scheme establishes that offences under sections 51 and 52 fall within the compounding power conferred by section 53 and that compounding may occur before or after institution of proceedings. Liability may arise either for making a false statement in a return or for failure to furnish a return as required; either charge falls within the compounding provision. The role of an agent holding a general power of attorney and the question whether the principal is bound by the agent's act are matters bearing on criminal liability, and concurrent factual findings as to voluntariness and admission are dispositive of the dispute on the pleadings.

Conclusion: The composition by payment under section 53 was within the authority of the tax authority; the appellant was liable (either under section 52 or under section 51(c)) and bound by the facts found on concurrent findings; the appeal is dismissed in favour of the Revenue.

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