2024 (1) TMI 799

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....13-2014 and the Assessment Year 2014-2015 respectively has been rejected by the first respondent. Operative Portion of the impugned Common Order reads as under:- "5.1 An assessee is required to file application for compounding before the Competent Authority as per Para 7(ii) and 9.1 of the Board's guidelines for compounding of offence in F.No.285/08/2014- IT(Inv.V)/196 dated 16.09.2022, which is reproduced as under:- Para.7.(ii) The compounding application may be filed suo-moto at any time after the offence(s) is committed irrespective of whether it comes to the notice of the Department or not. However, in a case in which prosecution complaint has already been filed in a court of law it should be filed not later than 12 months from the end of month of filing of complaint in Court. Further, application of compounding filed after the end of 12 months from the end of the month in which prosecution complaint, if any, has been filed in the court of law, but within 24 months, will be subject to increased compounding charges at the rate of 1.25 times of the normal compounding charges as applicable to the offence. Para 9.1 The restrictions imposed in para7(ii....

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.... The case for personal hearing was fixed on 14.04.2017. 7. In support, the learned counsel for the petitioner has placed reliance on the following decisions:- I. C.R.N.Investments (P.) Limited Vs. Chief Commissioner of Income Tax, (2023) 146 Taxmann.com. II. K.M.Mammen Vs. Principal Commissioner of Income Tax, (2022) 445 ITR 226. III. Foot candles Film (P.) Vs. Income Tax Officer, (2023) 453 ITR 402. IV. Vikram Singh Vs. Union of India, (2017) 394 ITR 746. V. G.P.Engineering Works Kachhwa Vs. Union of India, (2022) 446 ITR 563. VI. Ramesh Jain Vs. Union of India, (2023) 146 Taxmann.Com 320. VII. V.A.Hasseb & Co. Vs. Chief Commissioner of Income Tax, TDS, (2017) 245 Taxman. VIII. Chairman, CBDT Vs. Smt.Umayal Ramanathan, (2009) 313 ITR 59. IX. Viraj Exports (P.) Ltd., Vs. Chief Commissioner of Income Tax, (2022) 289 Taxman 430. 8. It is submitted that the guidelines of Central Board of Direct Taxes (CBDT) issued on 16.09.2022 under Section 119 of the IT Act cannot override Section 279(2) of the IT Act. 1961. 9. The learned Senior Standing Counsel for the respondents would submit that the petiti....

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....no objection on your part to proceed with the prosecution proceedings initiated, subject to the relevant provisions of the income-tax Act, 1961. 5. An option to get the offence compounded is available for your benefit." 12. It is submitted that despite notice being given to the petitioner, the petitioner failed to approach the authority for compounding offence in time. 13. The learned Senior Standing Counsel for the respondents has placed reliance on the following decisions:- i. U.P.Chawla Vs. M.P.Tiwari, (1992) 63 taxmann 538 (SC) ii. M.V.Jawali Vs. Mahanjan Borewall & Co., (1997) 95 taxmann.com 306 (SC). iii. Vikram Singh Vs. Union of India, (2018) 89 taxmann.com 327 (Delhi). iv. Viraj Exports (P.) Limited Vs. Chief Commissioner of Income Tax (TDS), (2022) 142 taxmann.com 285 (Delhi) v. Sangeetha Exports (P.) Ltd., Vs. Union of India, (2008) 173 taxmann 21 (Delhi) vi. Anil Batra Vs. Chief Commissioner of Income Tax, (2011) 15 taxmann.com 121 (Delhi) vii. Dr.K.Jagadeesan Vs. Central Board of Direct Taxes, (1998) 231 ITR 755 (Delhi) viii. Shree Sonal Gum Industries Vs. Income Tax Officer, (2000) ....

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....g proceedings, outer limits (within which the Court or Tribunal can condone delay) and termination of proceedings. It is submitted that the said benefit is not available to the petitioner. 17. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents. 18. I have also perused the applications filed by the petitioner on 25.11.2022. The respective applications filed by the petitioner are bereft of the details required for compounding the offence. 19. Under Section 279(2) of the IT Act, 1961, the Principal Chief Commissioner, Chief Commissioner, Principal Director General or the Director General, as the case may be, can compound any offence committed by an assessee, which is punishable under Chapter XXII of the IT Act, 1961. 20. Applications can be filed either before or after the institution of the case. The well-settled principal of law is that such applications should be filed before conviction is handed over to an assessee and at the earliest. 21. By two separate orders dated 09.03.2018, the second respondent sanctioned leave to prosecute the petitioner and its Directors under Sectio....