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TMI Blog2018 (8) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of compounding fee is statutorily fixed. The question of raising any dispute on the same does not arise. Actually, the dispute with regard to the quantum raised by the petitioners was on the basis of a CBDT Circular - But these guidelines are applicable only to compounding applications filed after 01-01-2015. The application of the petitioners in this case was filed on 26-8-2014. Therefore, the compounding fee was liable to be calculated at the rate of 5%, as per the guidelines existing as on the date of filing of the compounding application. It appears that the compounding fee was stipulated at 5% at the time when the petitioners filed their application for compounding. It was reduced to 3%, after 01-01-2015. Today, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e initiated against them for their failure to remit the taxes deducted by them to the Government account within the stipulated time as required under the provisions of Chapter XVIIB of the Income Tax Act, 1961. In response, the petitioners filed an application for compounding, on 26-8-2014. 4. Vide letter dated 08-3-2016, the petitioners application for compounding was accepted, subject to payment of compounding fee of ₹ 20,21,793/-. The fee was to be paid within 60 days of the receipt of the intimation. 5. Though the time limit for making payment expired on 10-5-2016, the petitioners did not remit the amount. On the contrary, they sought rectification of the amount indicated as compounding fee, through their letter dated 21-3- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding fee. But the said request was turned down on 07-3-2018. Again, the petitioners made a fresh request on 21-3-2018. But the same was also turned down by order dated 26-3-2018. 11. Thereafter, the petitioners have come up with the above writ petition challenging the rejection of the compounding application. 12. The main grievance of the petitioners is that when there is a genuine dispute about the quantum of compounding fee payable by them, it was not open to the respondents to reject the application for compounding, without first resolving the dispute. 13. But the above contention of the petitioners is liable to be rejected outright. In the narration of facts, we have indicated that the compounding application was filed on 26-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the compounding fee was liable to be calculated at the rate of 5%, as per the guidelines existing as on the date of filing of the compounding application. 16. It appears that the compounding fee was stipulated at 5% at the time when the petitioners filed their application for compounding. It was reduced to 3%, after 01-01-2015. Today, the petitioners want to apply the CBDT guidelines to their case, taking the date of acceptance of the application for compounding as the basis. 17. But the above claim of the petitioners is an argument of convenience. Let us take a hypothetical case where the compounding fee was to be calculated at 3% before the issue of the CBDT guidelines and the same had been increased to 5% after 01-01-2015. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of the compounding fee, if the Court was not in agreement with him on the first point. The learned counsel for the petitioners contended that by prosecuting the Directors of the petitioners, the Department can only send them to prison and that by accepting the compounding fee, the petitioners can be saved without any detriment to the Department. 20. The said argument, in our considered view, merits acceptance. Section 279(2) of the Act enables the Principal Chief Commissioner to compound any offence under Chapter XXII, either before or after the institution of the proceedings. Therefore, it is not too late for the petitioners to mend their ways. The Statute does not stipulate an inviolable period of limitation for payment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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