9911796707
TMI Blog1999 (3) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain irregularities in accounting. Petitioner applied for compounding under section 47 and the authorised officer accepted the offer. The maximum compounding fee of Rs. 1 lakh was imposed on the petitioner and that was paid. Once the compounding fee is paid and accepted, both parties, that is, neither the Revenue nor the assessee can question the compounding order and that particular offence stands as compounded. Section 47 deals with compounding of offence which reads as follows: 47. Composition of offences.-(1) The assessing authority or other officer or authority authorised by the Government in this behalf may accept from any person who has committed or is reasonably suspected of having committed an offence against this Act, by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the English Law is an offence perverting public justice by bargaining to allow a criminal to escape. In tax matters, it is different. Once the compounding is done the offence is settled, no action can be taken against the assessee for that particular offence and of course assessment or even best judgment assessment can be made as per law but no further penal action can be taken against that particular offence. But penalty was imposed on the petitioner under section 45A for the very same offence which was compounded under section 47. It is not disputed that section 45A is penal in nature. 3.. It is the contention of the learned Government Pleader that compounding is only regarding criminal offence and against prosecution, and not agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounding fee fixed offence as such is settled. Therefore, after compounding no penalty or prosecution can be launched. 5.. Learned Government Pleader cited the decision of the Madras High Court in Deputy Commissioner (C.T.), Coimbatore v. N. Pillar Chetty Co. [1976] 38 STC 342. But in that case an offence of failure to maintain true and correct accounts was compounded. Penalty was imposed for not filing the return in time and not for the offence of failure in maintaining correct accounts. The Madras High Court held that collection of compounding fee is with reference to an independent contravention of the Act while the imposition of penalty is with reference to an entirely different violation of the provisions of the Act. Therefore, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Kerala [1991] 2 KLT 875 wherein the question considered was whether the proceedings of compounding is revisable or not and not the question whether after compounding, penalty orders can be imposed. The Division Bench observed as follows: The language employed in section 47 would indicate that the proceeding contemplated thereunder partakes of the character of a compromise between the parties. The section provides that the assessing authority or other officer or authority authorised by the Government in this behalf may accept from any person who has committed or is reasonably suspected of having committed an offence against this Act by way of composition of such offence a sum of money equal to the amount of tax attempted to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the learned Government Pleader that after compounding an offence and accepting maximum compounding fee, for the very same offence penalty can be imposed. Therefore, I am of the opinion that when once the matter is compounded under section 47 no prosecution or penalty proceedings can be initiated for the very same offence. Since petitioner has compounded the offence and department has accepted the maximum compounding fee of rupees one lakh, no further penalty under section 47 can be imposed on the petitioner. Therefore, exhibit P1 penalty order and exhibits P2 and P3 revisional orders confirming the same are set aside. The original petition is allowed. Order on C.M.P. No. 4510 of 1996 in O.P. No. 2610 of 1996 I dismissed. Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
