2022 (5) TMI 63

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.... been filed challenging the orders dated 11^th February, 2022 passed by the Respondent No.1, Chief Commissioner of Income Tax (TDS) and the Orders dated 31st July, 2017 under Section 2 (35) of the Income Tax Act, 1961 (for short 'Act') pertaining to the Financial Years 2013-14, 2014-15 and 2015-16 passed by the Respondent No.2, Assistant Commissioner of Income Tax, Circle 75 (1), Delhi. Mr.Ramesh Singh, learned senior counsel for the Petitioners states that Respondent No.1 vide impugned order has compounded the offences pertaining to late deposit of Tax Deducted at Source (TDS) committed by the Petitioners herein under Section 279(2) of the Act at the rate of five per cent compounding charges. He states that levying compounding charges a....

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.... Learned senior counsel for the petitioners emphasises that the impugned compounding order pertaining to the Financial Years 2013-14, 2014-15 and 2015-16 is completely at variance with the compounding order for the Financial Year 2012-13 thereby making the impugned order arbitrary and unsustainable. Per contra, Mr. Zoheb Hossain, learned counsel for the respondents revenue has drawn this Court's attention to Clause 12.1 of the Guidelines for Compounding of Offences under Direct Tax Laws, 2014 issued by the Department of Revenue, Central Board of Direct Taxes, Ministry of Finance, Government of India, dated 23rd December, 2014. The relevant portion of Clause 12.1 reads as under :- "12.1 Section 276B- Failure to pay the tax ded....

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....tions. (See: Vikram Singh vs. Union of India & Ors. (2018) 401 ITR 307) This Court is of the opinion that the guidelines issued by the CBDT clearly stipulate that after compounding of the first offence, if the same person comes forward for compounding of another offence through any subsequent application, the applicable rate will be five per cent instead of three per cent. This Court is also of the view that the expression "after compounding of the said offence" means when the offence has been compounded, meaning thereby, not only the stage after the compounding order has been passed but also after the conditions stipulated in the said order have been complied with like payments. In fact, there is a rationale behind imposing a higher rat....