9911796707
TMI Blog2015 (1) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest during the accounting year 1984-85. Therefore, certain deductions of income tax were made on different dates. The deducted amounts were liable to be deposited in appropriate bank on different dates and there was slight delay in making the said payments. These amounts were deposited voluntarily in the treasury without any notice from the department. There were two reasons for the delay i.e. firstly there was a fraud committed with the petitioners by a third party and therefore there were financial constraints on account of which the firm had to close down its business w.e.f 1.4.1985 and secondly on account of closure of business, day to day affairs of the business could not be attended properly. After the filing of the return, when the matter came to the notice of the Income Tax Officer, the said authority calculated interest of Rs. 426/- under Section 201(1A) of the Act vide order dated 7.3.1998, Annexure P.1 for this default. The assessee also deposited that amount in the treasury. The petitioners were not aware of the fact that payment of tax deducted at source was to be made within seven days. They were under the impression that the amount could be deposited in the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is decision. The petitioners have been given to understand that the departmental authorities are not compounding the offence only for the reason that they have already been convicted and as per CBDT directions, the case cannot be compounded. On 3.7.2000, the petitioners approached the Central Board of Direct Taxes with a prayer to compound the offence on deposit of Rs. 2192/- but no action has been taken so far. Hence the instant petition by the petitioners. 3. Learned counsel for the petitioners submitted that there was delay in deposit of tax deducted at source amounting to Rs. 4870/- for which the petitioners had deposited the interest as well under Section 201(1A) of the Act. It was argued that the petitioners had filed an application for compounding under section 279(2) of the Act which was approved by the CCIT on payment of compounding fee of Rs. 2192/-. However, subsequently, the same was declined on 16.3.2000 vide Annexure P.8. It was urged that Petitioner No.1 is 75 years of age and has been facing the agony for the last more than 25 years and the default relates to the year 1985 whereas the prosecution itself was filed by way of a complaint on 24.4.1989. The default was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; "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 after the institution of proceedings, be compounded by the Chief Commissioner or Director General." Under Section 276B, prosecution can be launched by the revenue where the assessee defaults or there is delay in deposit of tax deducted at source. However, it is evident from section 279(2) of the Act that any offence under Chapter XXII may either before or after the institution of proceedings be compounded by Chief Commissioner or Director General. 7. In the present case, the application of the assessee for compounding under Section 279(2) of the Act was accepted by the CCIT on 29.11.1999 vide Annexure P.6 whereby compounding was accepted on payment of compounding fee of Rs. 2192/-. However, the same was subsequently reviewed on 16.3.2000. It was not disputed by learned counsel for the respondents that the amount of Rs. 4870/- alongwith interest of Rs. 42 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances 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 meantime to the credit of the Government. No such consideration will, of course, apply to levy of interest under Section 201(1A)." The words "not normally" precede the words "be proposed when the amount involved and/or the period of default is not substantial and the amount has also been deposited in the meantime to the credit of the Government". It is true that the word "normally" does not mean that it is necessary or incumbent upon the authorities concerned so as not to launch proceedings under Section 276B but when the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 Rs. 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 judgments relied upon by learned counsel for the petitioners. 10. Ordinarily, the power to compound vests with the authorities under the Act. It will not serve any useful purpose in referring back the matter to the competent authority particularly keeping in view the fact that the very insignificant amount of Rs. 4870/- is involved which also stood paid and even interest under Section 201(1A)of the Act was paid by the assessee. Accordingly, letter dated 14.3.2000 withdrawing the compounding is hereby quashed. As a necessary corollary, the Annexu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
