TaxTMI 
TaxTMI 
2020 (2) TMI 840
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....empted to evade tax. 3.The petitioner had 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 ....
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....formation received from a foreign Government, the Revenue would have been put to a great loss. No doubt, the assessee may claim certain infirmity in the nature of the 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 ....
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....ank account and the assessee remained non-cooperative during the course of the assessment proceedings. While replying to the issue of notice under section 148, assessee submitted. "On the basis of the reasons 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 reg....
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....f total non-cooperation in the entire proceedings before Assessing Officer on the issue. 5.7 Considering the above fact and circumstances, the RCC recommended that the Compounding Petition of the assessee deserve to be rejected according to the guidelines prescribed in the Para 4.4(g) considering the nature and magnitude of offence 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.....
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....of concealment on the part of the assessee and he had returned the income on estimate basis. The Tribunal further found that it is a case purely on difference of opinion as to the estimates and not a case of concealment of income or even furnishing of inaccurate particulars of income. 12.The learned Senior Counsel for the petitioner submits that the respondents have failed to follow the orders of the 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 cou....
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.... SLP (C) Nos.27755 to 27759 of 2010 dated 10.05.2011, wherein the Hon'ble Supreme court held that when orders passed by it were flouted by a subordinate judicial officer they are liable to be departmentally enquired to take disciplinary action. 17.The learned Senior Counsel for the petitioner also referred to Section 16(1) of the Contempt of Courts Act, 1971. In this connection, he referred the decision of the Bombay High 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 tend....
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....rt observed as under:- 10. The Explanation is in the nature of a proviso to Section 279(2) of the Act with the result that the exercise of power by the Commissioner under the said section has to be subject to the instructions issued by the Board from time to time. The Explanation empowers the Board to issue orders, instructions or directions for the proper composition of the offences under Section 279(2) of the Act and further 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. Jhar....
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....uccessful as it was dismissed by learned Single Judge by an order daed 28.02.2019. The petitioner has filed the SLP before the Hon'ble Supreme court against the said order and the same is pending. 28.Meanwhile, the Writ Petitioner filed an application for compounding the offence during the month of march 2011 before the Director General of Income-tax (Investigation) 1st respondent, who by an order dated 15.01.2014 rejected the application. The petitioner thus filed W.P.No.3929 of 2014. The said Writ Petition 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 o....
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....ding application on 09.09.2019, the CBDT Circular dated 14.06.2019, bearing reference F.No.285/08/2014-IT (Inv.V)/147 had already been replaced with the fresh Circular dated 14.06.2019, wherein the Central Board of Direct Taxes, in paragraphs 6.1 & 6.2 has classified the offence into two categories. The two categories are as under:- Category 'A': S.No Section Description / Heading of Section i 276 (Prior to 01104/1976) - Failure to make payment or deliver returns or statements or allow inspection ii 276B (Prior to 0110411989) - Failure to deduct or 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 co....
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....ompounding requested in more than three occasions can be considered only on the approval of the Committee 5 referred to in Para 10 of these Guidelines. The 'occasion' is defined in Para 8.2. ii. Category 'B' offence other than the first offence(s) as defined in Para 8.2 for the purpose of these Guidelines. iii. Offences committed by a person for which he was convicted by a court of law under Direct Taxes Laws. iv. Any offence in respect of which, the compounding application has already been rejected, except in the cases where benefit of rectification is available in these Guidelines. v. The cases of a person as main accused where it is proved that he has enabled others in tax evasion such as, 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 manne....
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....detected by the department but voluntarily disclosed by a person pnor to the filing of application for Compounding of Offence(s) in the case under any Direct Tax Acts for one assessment year or more. For this purpose, the offence is relevant if it is committed by the same person/entity. Further, the first offence is to be determined separately with reference to each section ofthe Act under which it is committed. 8.3 Notwithstanding anything contained in these Guidelines, the Finance Minister may relax restrictions in Para 8.1 above for compounding of an offence in a deserving case, on consideration of a report from the Board on the petition of an applicant. 35.Though, the above guideline was to apply for fresh applications filed after 17.06.2019, nevertheless the guidelines reflect the policy of the Central Board of Direct Taxes. It would be unfair to discriminate 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....