TaxTMI 
TaxTMI 
2026 (8) TMI 565
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....to the amount already paid. 2. For the sake of convenience, the appellants herein as "the Department" and the respondent herein as "the assessee". 3.1. The dispute has a long and somewhat tortuous history, spanning several years and three successive rounds of litigation before this Court, apart from the cases determined by the Supreme Court. It would be useful to briefly recount that history before examining the correctness of the order under appeal. 3.2. The assessee, a septuagenarian industrialist, was subjected to reassessment proceedings under Section 147 of the Income-tax Act, 1961 [for brevity, "the Act"], for the assessment year 2002-03, in connection with monies said to have been deposited in a foreign bank account. Penalty proceedings under Section 271(1)(c) of the Act followed, and the penalty, though confirmed, was eventually restricted to 100% of the tax sought to be evaded, instead of 300%, by the Commissioner of Income Tax (Appeals) on 25.03.2014, a reduction which was affirmed by the Income Tax Appellate Tribunal on 27.09.2017. 3.3. The assessee's first application for compounding of the offence under Section 279 of the Act, filed on 25.03.2011, was r....
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....rce when the very first application was filed on 25.03.2011, that continued to govern the compounding of the assessee's case. 3.7. The order dated 13.04.2022 was carried in appeal by the Department in W.A.No.1767 of 2022, which was dismissed by the Division Bench on 11.12.2023. The Division Bench expressly declined to examine whether the assessee was governed by the 2008 or the 2019 Circular, holding that the finding of the learned Single Judge in W.P.No.3929 of 2014, dated 28.08.2019, that the assessee was entitled to compound in view of the reduction of penalty, attracting Section 279(1A) of the Act as explained in Prem Dass (supra), had attained finality qua the Department, in the absence of any appeal by the Department, and that this finality could not be watered down. In paragraph 10 of that order, the Division Bench went further and held that the assessee was governed by the compounding guidelines dated 16.05.2008 in view of order dated 28.08.2019 in W.P.No.3929 of 2014. 3.8. The Department carried the matter further in S.L.P.(C) No.7047 of 2024. The assessee had, independently, filed S.L.P.(Crl) No.6179 of 2019. Both were disposed of by the Supreme Court on 05.03.2....
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....y the unchallenged order dated 28.08.2019 in W.P.No.3929 of 2014, then by the order dated 13.04.2022 in W.P.No.23800 of 2021, and thereafter by the order of the Division Bench dated 11.12.2023 in W.A.No.1767 of 2022, which was never carried in appeal on that specific finding. 5.2. He further submitted that the sole purpose of the order dated 05.03.2025 of the Supreme Court was to bring finality to the quantification exercise and it could not construed as a tool to reopen an issue that had never even been urged before the Supreme Court and that stood concluded in the assessee's favour. 6. The question that falls for our consideration is whether the compounding fee payable by the assessee could lawfully be computed under the compounding Guidelines dated 17.10.2024, or whether, as held by the learned Single Judge, it had to be computed strictly in accordance with the CBDT Guidelines dated 16.05.2008. 7. We have heard counsel on either side and perused the entire chain of orders passed in the three earlier rounds of litigation, culminating in the order dated 05.03.2025 of the Supreme Court, as well as the order under appeal. 8. At the outset, it is to be emphasized that....
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....roval of the Board can also be issued. Reading section 279(2) along with the Explanation, there is no matter of doubt that the Commissioner has to exercise his discretion under section 279(2) in conformity with the instructions issued by the Board from time to time." 12. In the case at hand, the question of which set of instructions governs the application has already been judicially determined and has attained finality between the parties. The Explanation to Section 279(6) empowers the Board to issue instructions for the proper composition of offences and it cannot be read as conferring upon the executive the power to override or annul, retrospectively, a final judicial determination rendered in the lis involving the same parties. 13. We may also note that even on its own terms, the 2024 Guidelines do not assist the appellants. Paragraph 3.2 thereof, extracted in the order under appeal, permits an application to be filed afresh only where an earlier application was rejected on account of specified curable defects, such as non-payment of outstanding tax or short payment of compounding charges, and expressly excludes from its scope applications "rejected in the past on merits ....