TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 891
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....ection 279(1) read with Section 276-B of the Income Tax Ac for the Financial Year 2013-14 and 2014-15 for launch of prosecution under Section 276-B. The said communications were received from Commissioner of Income Tax (Tax Deducted at Source), Bhopal. Thereafter, the petitioner preferred an application in prescribed format under Section 276-B(a) for compounding before the Deputy Commissioner of Income Tax (Tax Deducted at Source), Indore on 19/07/2017 and subsequently, the petitioner also received a show cause notice dated 14/08/2017 for launch of prosecution under Section 276-B(a) for Financial Year 2015-16 also. In response to the same the petitioner filed a compounding application on 15/09/2017. After being intimated that the application was filed before the wrong authorities i.e. instead of filing application before Principal Chief Commissioner of Income Tax, it was preferred before Deputy Commissioner of Income Tax - (Tax Deducted at Source), a fresh application was filed before Principal Chief Commissioner of Income Tax, Bhopal on 15/01/2018 for the Financial Year 2013-14 and 2014-15. 03-The petitioner also deposited the TDS along with interest for Financial Year 2013-14 am....
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....ances of the case to give relief to the petitioner." The petitioner has stated that compounding charges should be levied @ 3% for the Financial Year 2013-14 as well as for the Financial Year 2014-15 instead of 5%. The petitioner's contention is that the charges levelled by the Principal Chief Commissioner of Income Tax are contrary to the guidelines dated 23/12/2014 issued by the CBDT. 06-Heavy reliance has been placed upon paragraph No.12 of the CBDT's guideline and the same reads as under:- "12. Fees for compounding: The fees for compounding of offences shall be as follows:- 12.1Section 276B- Failure to pay the tax deducted at source. Section 276BB- Failure to pay the tax collected at source. 3% per month or part of a month of the amount of tax in default disclosed in the compounding application. After compounding of the said offence, if the same person comes forward for compounding of such offence through any subsequent application, the applicable rate for compounding of such an offence will be 5% per month or part of a month of the amount of tax in default." &nbs....
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.... 1,07,505/- Less than one year 25,57,245/- 3,14,712/- 2. 2014-15 Less than one year 25,11,709/- 2,66,068/- 3. 2015-16 More than one year 2,640/- 555/- Less than one year 8,18,957/- 63,887/- 4. 2016-17 Less than one year 6,65,125/- 67,878/- Show cause notices were issued to the petitioner - assessee for the respective financial years for prosecution under Section 276-B of the Income Tax Act, 1961 by the CIT (TDS), the details of which are as under:- S.No. Financial Year Date of issue of show-cause notice 1. 2013-14 22/06/2017 2. 2014-15 22/06/2017 3. 2015-16 14/08/2017 4. 2016-17 12/03/2018 A complaint was also filed before the Additional Chief Judicial Magistrate, Indore in respect of Financial Year 2013-14 on 05/06/2018 vide Criminal Case No. SC EOW/24397/2018. 12-It has been further stated that assessee after deducting TDS on payments has not deposited the same in the Government account as per the provisions of Section 200(1) of the Income Tax Act, 1961 and it was noticed that he was habitual in not depositing the TDS. However, the respondent has stated that the respondent has taken just and lenient view while consideri....
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....der chapter XXII of the Act may, either before or after the institution of proceedings, be compounded by the CCIT/DGIT. As per section 2(15A) and 2(21) of the Act, Chief Commissioner of Income Tax includes Principal CCIT and Director General of Income tax includes Principal DGIT. 4.Compounding is not a matter of right: Compounding of offences is not a matter of right. However, offences may be compounded by the competent authority on his satisfaction of the eligibility conditions prescribed in these guidelines keeping in view factors such as conduct of the person; nature and magnitude of the offence and facts and circumstances of the each case. 6.Classification of Offences: The offences under Chapter-XXII of the Act are classified into two parts (Category-'A' and Category-'B') for the limited purpose of compounding of the offences. 6.1Category 'A' Offences punishable under the following sections are included in Category 'A': Sl. No. Section Description/Heading of section i. 276 (Prior to 01/04/1976) - Failure to make payment or deliver returns or statements or allow inspection. ii. 276B (Prior to 01/04/1989) - Failure to ded....
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....r compounding of such an offence will be 5% per month or part of a month of the amount of tax in default. The period of default for calculating compounding fee in the category shall be calculated from the date of deduction to the date of deposit of tax deducted at source as is done in respect of calculating interest under section 201(1A)." The aforesaid statutory provision of law makes it very clear that the compounding fees payable is 5% in case its a second application. The Principal Chief Commissioner vide order dated 10/01/2019 has furnished all minute details for imposition of compounding fees for the Financial Year 2013-14 and 2014-15 @ 5%. 19-Paragraphs No.2 to 6 of the order passed by the Asst. Commissioner of Income Tax (Tech) for Principal Chief Commissioner of Income Tax, M.P. and CG reads as under:- "2.In this context, you are informed that as per the official record you had submitted the application for the Financial Years- 2013-14 and 2014-15 on 19.07.2017 in the O/o the DCIT (TDS), Indore instead of submitting the same in the O/o the CCIT/DGIT concerned (the Pr. CCIT, Bhopal in this case) which is one of the eligibility condition according to Instruction dtd. 23.....