TaxTMI 
TaxTMI 
2020 (2) TMI 840
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....earlier filed Crl.O.P.No.9065 of 2011 before this Court under Section 482 of the Criminal Procedure Code, 1973 to quash the said complaint. By an order dated 28.02.2019, the learned Single Judge of this Court dismissed the aforesaid Crl.O.P.No.9065 of 2011. The petitioner has filed S.L.P against the dismissal order passed in the aforesaid Crl.O.P. filed by the petitioner and is stated to be pending. 4.The petitioner had also filed an application for compounding the offence under Section 279 of the Income Tax Act, 1961 before the respondents. The said application for compounding the offence came to be rejected by then the Director General of Income-tax (Investigation) 1st respondent herein vide order dated 15.01.2014 with the following observations:- I have given my anxious consideration to the case of the assessee. This case was not found to be a fit case for compounding as per the guidelines of the Board, according to the circular in F.No.285/90/2008-IT (Inv.)/12 dated 16th May, 2008 issued by the Board. Paras 3 and 4 of this circular read as follows:- "3. Offences under Direct Tax Laws may be compounded subject to the conditions prescribed in these guidelines. An assessee ca....
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.... evidence on which the Department is relying. But the fact is that the signature of the assessee is tallying with the signature in the document. It is my considered opinion that this evidence establishes major fraud in so far as funds have gone out of the country and if not for the information obtained, the moneys would have remained untaxed. Keeping funds abroad, that too, in countries wherein banking secrecy law shield the investment is also to be regarded as anti- national activity. It is also seen that the Hon'ble ITAT has upheld the orders of the Revenue vide its order dated 25.02.2013. The matter is also under investigation before the Enforcement Directorate. Assessee cannot take advantage of the fact that the nature of the documents is not foolproof and accordingly, there is a case for compounding. The assessee has not produced the documents nor the account copy to disprove the contentions of the Department. Considering the nature of the offence and the quantum of income involved, it is my considered opinion that this is not a fit case for compounding the offences committed. Thus, under para 3 and 4.4 (b), (c) and (g) of the impugned Circular, the petition deserves t....
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....s provided by you your letter dated 24.04.2009. I have written to LGT Bank, Lichtenstein on 14.05.2009 requesting them to verify the details of the Trust purported to have an account with LGT Bank and beneficiaries in the said Trust. The Bank has replied by their letter dated 08.07.2009 copy of which is enclosed (Original Bank letter is produced for your perusal). The Bank's letter will show that they have no information of any such Trust or the stated beneficiaries in the Trust. In view of the Bank's confirmation, the reassessment is without merits and therefore, the proceedings may be dropped." Whereas, the Assessing Officer found that the bank has actually replied as under found that the bank has actually replied as under:- "Due to the Liechtenstein banking Act, the bank Act, the bank can disclose information about any possible business relation between a bank client and the bank only to authorized person(s) and none else. We, therefore regret our inability to give you the information called for by you" Secondly, a sworn statement u/s 131 of the IT Act, 1961 was recorded from the assessee by the Assessing Officer on 10.11.2009. Some of the intercepts are reproduced here ....
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.... as non compoundable. III. In the result, the application of the assessee Shri K M Mammen, (AAEPM0314R) for the Asst. Year 2002-03 u/s.279(2) of the Income Tax Act, 1961 dated 10/09/2019 has been rejected. 9.There it has been clarified that the order has been passed in terms of the Board's revised guidelines for compounding of offences in F.No.285/90/2008-IT (Inv.V)/12, dated 16.05.2008. 10.It is the contention of the Mr.N.L.Rajesh, learned Senior Counsel, instructed by Mr.S.Ashok Kumar, learned counsel for the petitioner that in para 8.6 of order dated 28.08.2019 in W.P.No.3929 of 2014, the learned Single Judge of this Court has categorically made it clear that the petitioner was to be entitled to benefit of Section 279 (1A) of the Act and the mere challenge to the order reducing the penalty may not suffice to deny such a benefit. Meanwhile, the department appeal before the ITAT has also been dismissed. He submits that in view of these subsequent developments, there cannot now be any impediment on the part of the Department to compound the offences under Sections 276C and 277 of the Act. 11.The learned Single Judge of this Court while passing the order, has relied on the dec....
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.... learned Single Judge in letter and spirit while dismissing the application filed for compounding of offence and as officers of the Income Tax Department who constituted the Compounding Committee, in terms of the said CBDT circular ought not to have violated the order of the learned Single Judge in W.P.No.3929 of 2014. 13.The learned Senior Counsel for the petitioner submits that under Article 215 of the Constitution of India, every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. He further submits that under Article 226 of Constitution of India, High court can enforce fundamental rights. Under Article 227 of the Constitution of India, every High Courts have jurisdiction over all court and tribunals throughout the territories in relation to which it exercise jurisdiction. He further submits that it would be anomalous to suggest that a tribunal over which the High Court has superintendence can ignore the law declared by this court and pass order in direct violation of its order. In this Connection, the learned Senior Counsel placed reliance on the decision of the Hon'ble Supreme Court in East ....
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....igh Court in Magna Graphics Ltd Vs. Prakash Sabde, 2004 SCC OnLine Bom 143, to state that the respondents therein were bound by declaration given by the Court in the Writ Petition. The Court there followed the decision of the Hon'ble Supreme Court in East India Commercial Company Limited, Calcutta and Another Vs. Collector of Customs, Calcutta, AIR 1962 SC 1893. 18.Finally, the learned Senior Counsel for the petitioner also referred to the decision of the Hon'ble Supreme Court in Commissioner of Wealth Tax Vs. Dr.Karan Singh and Others and etc., 1993 Supp (4) SCC 500 to buttress the point that the " basic rules of interpreting Court judgments are the same as those of construing other documents. The only difference is that the judges are presumed to know the tendency of parties concerned to interpret the language in the judgments differently to suit their purposes and the consequent importance that the words have to be chosen very carefully so as not to give room for controversy. The principle is that if the language in a judgment is plain and unambiguous and can be reasonably interpreted in only one way it has to be understood in that sense, and any involved principle of artificia....
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....specifically provides that directions for obtaining previous approval of the Board can also be issued. Reading Section 279(2) along with the Explanation, there is no manner of doubt that the Commissioner has to exercise the discretion under Section 279(2) of the Act in conformity with the instructions issued by the Board from time to time. 22.The learned Senior Standing Counsel for the respondents further relied on the following decisions:- i. Ashok Kumar Singh and Others Vs. State of Bihar and Others, (1992) 1 SCC 152. ii. Indian Airports Employees' Union Vs. Ranjan Chatterjee and Another, (1999) 2 SCC 537. iii. Mrityunjoy Das and Another Vs. Sayed Hasibur Rahaman and Others, (2001) 3 SCC 739. iv. Jhareswar Prasad Paul and Another Vs. Tarak Nath Ganguly and Others, (2002) 5 SCC 352. v. Vasantha Meena Enterprises Vs. Baskaran and Others, order dated 06.06.2011 passed by this Court in Cont.P.No.1563 of 2010. vi. N.Ramadas and etc. Vs. Dr.C.A.Mohamed Abdul Huq and Another, order dated 12.01.2015 passed by this Court in Cont.A.Nos.1 and 3 of 2013. vii.Ashok Kumar and Others Vs. Depinder Singh Dhesi and Others, (2019) 8 SCC 280. 23.The learned Senior Standing Counsel ....
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....on was disposed by an order dated 28.08.2019. 29.Though the learned Single Judge has given categorical findings that there was no impediment on the part of the Department to compound offence under Section 279(1A) of the Income Tax Act, 1961, yet, in the operative portion of the order, the learned Single Judge has directed the the respondent to pass appropriate orders in accordance with law. The relevant portion of Section 279(1A) of the Income Tax Act, 1961 reads as under:- Section 279. Prosecution to be at the instance of Chief Commissioner or Commissioner:- 1................................... (1A) A person shall not be proceeded against for an offence under section 276C or section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under clause (iii) of subsection (1) of section 271 has been reduced or waived by an order under section 273A.] 2.................................... 3.................................... 30.In the light of the said direction, the petitioner filed a fresh compounding application on 09.09.2019 before the respondents, which was disposed by the respondents vide impugned order da....
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....r pay tax iii 276B (w.e.f. 0110411989 and up-to 30/5/1997)- Failure to pay tax deducted at source under Chapter XVII-B iv 276B Failure to pay tax deducted at source under chapter XVII-B or tax payable under section 115 - O or 2nd proviso the section 194B to the credit of the Central Government (w.e.f. 01/06/1997) v 276BB Failure to pay the tax collected at source vi 276CC Failure to furnish Return of Income vii 276CCC Failure to furnish returns of income in search cases in block assessment scheme viii 276DD (Prior to 1.04.1989) - Failure to comply with the provisions of section 269SS ix 276E (Prior to 1.04.1989) - Failure to comply with the provisions of section 269 T x 277 False statement III verification etc. with reference to Category 'A' offences xi 278 Abetment of false return etc. with reference to Category 'A' offences 6.2 Category 'B' Offences punishable under the following sections are included III Category'B': S.No Section Description / Heading of Section i 276A Failure to comply with the provision of sections 178(1) and 178(3 ) ii 276AA (prior to 01/1 0/1986)- Failure to compl....
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....s, through entities used to launder money or generate bogus invoices of sale/purchase without actual business, or by providing accommodation entries in any other manner as prescribed in section 277 A of the Act. vi. Offences committed by a person who, as a result of investigation conducted by any Central or State Agency and as per information available with the Pr. CCIT/CCITIPr. DGITIDGIT concerned, has been found involved, in any manner, in anti-national/terrorist activity. vii.Offences committed by a person who was convicted by a court of law for an offence under any law, other than the Direct Taxes Laws, for which the prescribed punishment was imprisonment for two years or more, with or without fine and which has a bearing on the offence sought to be compounded. viii.Offences committed by a person which, as per information available with the Pr. CCIT/CCITlPr. DGITIDGIT concerned, have a bearing on a case under investigation (at any stage including enquiry, filing of FIR/complaint) by Enforcement Directorate, CBI, Lokpal, Lokayukta or any other Central or State Agency. ix. Offences committed by a person whose application for 'plea-bargaining' under Chapter XXI-A o....
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....iscriminate between the applicants whose applications were already pending and those applicants whose applications were filed thereafter. Even on 20.12.2019 & 20.01.2020 when the case was argued before this Court, there was no mention made about the latest CBDT Circular dated 14.06.2019. The new guideline appears to be more liberal. Indeed, it was also incumbent on the part of the petitioner and the respondent to have brought it to the attention of this Court when W.P.No.3929 of 2014 was taken up for hearing. 36.As per Section 279(1A) of the Income Tax Act, 1961, a person shall not be proceeded against for an offence under Section 276C and Section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under clause (iii) of sub- section (1) of section 271 has been reduced or waived by an order under section 273A. This aspect ought to have been kept in mind. In this case, the penalty was reduced by Commissioner of Income Tax (Appeals). These factors should also kept in mind by the respondents. 37.The respondents shall also consider the age of the petitioner and his status in society while deciding the case of the petiti....