2021 (12) TMI 1214 - HC - Income Tax

Compounding of the alleged offence u/s 279 (2) - belated filling of returns - HELD THAT -Since there has been belated filing of income tax return, which can attract the penal provisions, therefore, the prosecution in this regard can be launched. On perusal of the sanction order passed by the first respondent dated 06.02.2017 in this regard, it discloses that the return of income tax for the assessment year 2013-14 should have been filed on or before 3/1.07.2013 u/s 139(1) since the same has not been filed, which was belatedly filed, it attracts the penal provisions u/s 276 CC (ii) and therefore, Sanction u/s 279 was given. Insofar as the belated filing of income tax return for other year, that is, assessment year 2012-13, no such prosecution was launched, it seems. This has been exactly pointed out by the learned counsel for the petitioner that the reason for non-filing of return or belated filing of return for the two or three assessment years consecutively is because of the calamities, which he pointed out in his representation, taken place in his family, where there has been a lot of litigations, which had to be faced by the family of the petitioner, hence he could not concentrate on filing of returns. Whether these reasons have been considered in a proper perspective before rejecting the said reason by analyzing the same, has to be looked into and in this context, when we read the impugned order, no such consideration seems to have been shown by the first respondent except the generalized comment as stated supra in the impugned order. This Court feels that, the reason cited by the petitioner, after giving him an opportunity, can once again be considered and accordingly, a fresh order can be passed by considering all these aspects in a proper perspective by the first respondent. For the said purpose, this Court feels that, the impugned order can be set aside and remanded back for fresh consideration. This Court is inclined to dispose of this writ petition with the following order that the impugned order is set aside and the matter is remitted back to the first respondent for re-consideration. While reconsidering the same whatever the reasons cited by the petitioner in his representations to invoke Section 279 (2) for compounding the offence and also further inputs if any to be supplied in this regard, for which, an opportunity of being heard be given to the petitioner assessee, the first respondent can consider the said aspects objectively and pass a reasoned order to that effect.

Summary

Issues:
Prayer for a Writ of Certiorarified Mandamus to set aside the order passed under Section 279(2) of Income Tax Act, 1961 and reconsider the compounding petition.

Analysis:

Belated Filing of Income Tax Returns:
The petitioner, an income tax assessee, faced family issues leading to belated filing of returns for the assessment years 2012-13 and 2013-14. The respondent revenue initiated prosecution for the belated filings. The petitioner sought compounding under Section 279(2) of the IT Act, which was rejected by the first respondent through an order dated 03.05.2018. The petitioner contended that the reasons for the belated filings were valid due to family litigations. The respondent argued that no acceptable reasons were provided for the delay.

Consideration of Compounding Plea:
The petitioner's counsel argued that the rejection of the compounding plea was unjustified as the reasons were not properly considered. The first respondent's order highlighted the lack of plausible reasons for the belated filings. The Court noted that the reasons cited by the petitioner, related to family calamities and litigations, were not adequately analyzed in the rejection order.

Judgment and Remand:
The Court reviewed the impugned order and found that a proper consideration of the petitioner's reasons was lacking. It set aside the order and remitted the matter back to the first respondent for reconsideration. The Court directed the first respondent to objectively assess the reasons cited by the petitioner and provide an opportunity for further inputs. The first respondent was instructed to pass a reasoned order within eight weeks from the date of the Court's order.

This detailed analysis of the judgment provides insights into the issues of belated filing of income tax returns, the consideration of the compounding plea, and the Court's decision to remand the matter for fresh consideration.