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TMI Blog2015 (1) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. Accordingly, letter dated 14.3.2000 withdrawing the compounding is hereby quashed. As a necessary corollary, the Annexure P.6 whereby the CCIT had agreed for compounding of the offence on payment of compounding fee of ₹ 2192/- shall stand revived. - petitioners submitted that though the CCIT had determined the compounding fee at ₹ 2192/-, however, the assessee shall deposit an additional amount of ₹ 5000/- to show his bonafides - Decided in favour of petitioner. - CWP No.10216 of 2000 - - - Dated:- 17-7-2014 - MR. AJAY KUMAR MITTAL AND MR. JASPAL SINGH, JJ. Mr. K.L.Goyal, Sr. Advocate with Mr. Sandeep Goyal, Advocate for the petitioner Mr. G.S.Hooda, Advocate for the respondent JUDGEMENT Ajay Kumar Mittal, J. 1. Prayer in this petition filed under Articles 226/227 of the Constitution of India is for a direction to the respondents for compounding of offence under section 279(2) of the Income Tax Act, 1961 (in short, the Act ). 2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. Petitioner No.1 was partner of firm M/s Roshan Lal Om Parkash (petitioner No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f criminal trial. He had undergone cardiac bypass surgery and was aged 62 years. On 21.9.1999, he moved an application to the CIT for compounding the offence under section 279(2) of the Act on the ground that he had been dealing with the department since 1956 and was never penalised for any kind of offence. Thereafter, petitioner No.1 was orally summoned by the Income Tax officer, Mansa asking him to give his consent to agree to pay fee of ₹ 2192/- as a condition for compounding the case to which he agreed. The matter remained pending for decision with the CIT till 29.11.1999 when the complaint matter was taken up for decision by Chief Judicial Magistrate, Mansa. It was brought to the notice of the trial court that since the matter regarding compounding of offence was pending before the authorities, the decision in the complaint be deferred. However, the Chief Judicial Magistrate declined the request and decided the matter holding the petitioner guilty of offence and awarding a punishment of one year six months plus a fine of ₹ 4000/- vide order dated 29.11.1999, Annexure P.4. Aggrieved by the order, the petitioners filed appeal before the Sessions Court, which is state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii) Bawa Mahesh Singh and others vs. Income Tax officer, (2005) 273 ITR 404 viii) Anil Tools and Forging and others v. CCIT and others, (2011) 334 ITR 265. 4. On the other hand, learned counsel for the respondents submitted that the case of the petitioners was not covered by the CBDT instructions and compounding had been rightly declined. 5. After hearing learned counsel for the parties, we find merit in the contentions of learned counsel for the petitioners. 6. It would be expedient to reproduce Sections 276B and 279(2) of the Act, which read thus:- 276B. Failure to pay the tax deducted at source' - If a person fails to pay to the credit of the Central Government, the tax deducted at source by him as required by or under the provisions of Chapter XVIIB, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. 279. Prosecution to be at the instance of Chief Commissioner or Commissioner. (1) xxxx xx xx xx xx xx xx (2) Any offence under this Chapter may, either before or aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these instructions are binding and in view thereof, the petitioners are entitled to acquittal and that being so, it shall be an exercise in futility to carry on with the trial, the conclusion and result whereof is obvious. 4. Mr. Sawhney, learned senior standing counsel for the Department, has, however, joined issue with the petitioners' counsel and contends that the instructions in question cannot possibly replace the provisions of the statute and once the relevant provisions of the statute provide punishment, the Departmental instructions have to give way. He further contends that it is in the discretion of the officer concerned depending upon the facts and circumstances of each case whether the prosecution should be launched or not. 5. Before any comments on the merits of the points canvassed by learned counsel for the petitioners are made, it shall be useful to see the relevant instructions. The same read thus : The prosecution under Section 276B should not normally be proposed when the amount involved and/or the period of default is not substantial and the amount in default has also been deposited in the meant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and the instructions, it is provisions of the statute and the rules that would prevail and not the instructions. There cannot be any quarrel with the proposition as enunciated in the aforementioned judgments. It is no doubt true that the assessee is liable for punishment if he makes a default in deposit of tax. As mentioned above, the instructions deal with the situation in which the Department in its discretion may not launch the prosecution. Having held that even on the facts and circumstances of this case, it is the discretion of the authorities to apply the instructions quoted above this court would have normally sent this case to the authorities concerned for consideration but the fact that a very insignificant amount of ₹ 9,428 in one case and an even lesser amount in another case is involved as also that the prosecution came to be launched after a number of years when the default was committed or even from the date when the tax was deposited as also that the matter is pending since 1993 in this court only it will serve no useful purpose in remitting the case to the authorities concerned. Similar view has been expressed by different High Courts in the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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