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TMI Blog2022 (11) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... ligibility for compounding of cases has been relaxed whereby case of an applicant who has been convicted with imprisonment for less than 2 years being previously non-compoundable, has now been made compoundable and discretion has been vested with the competent authority to compound offence. The Appellant is now aged about 76 years. Though the Appellant has shown complicity in evading tax and also been subjected to penalty, no useful purpose would be served by prosecuting the Appellant at this distant of time because she took advantage of the legal remedy available under law. See case of K.M.Mammen Vs. Principal Commissioner of Income Tax [ 2019 (9) TMI 59 - MADRAS HIGH COURT]. The press release dated 17.09.2022 of the Government and the revised guide lines for compounding of offence dated 16.09.2022 allows scope for compounding of offences. There is liberalisation. We are therefore inclined to interfere by setting aside the Impugned Order of the learned Single Judge in W.P.No.906 of 2018 dated 24.01.2020 and allow the case of the Appellant for compounding of the offences. Accordingly, this Writ Appeal is allowed by setting aside the order of the learned Single Judge and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate had filed regular return under Section 143 (3) read with Section 147 claiming 30% depreciation during the Assessment Year 1995-96 and 1996- 1997. It is further submitted that on coming to know about the survey, the Company filed revised return and thereby gave up depreciation claim for the aforesaid Assessment years and paid the tax and penalty. It is further submitted that as far as assessment years 1995-1996 is concerned, the matter went up to the Tribunal and the Tribunal had confirmed the imposition of penalty under Section 271 (1)(c) Act. It is his further contention that the Appeal filed by way of T.C.A.No.126/2007 also affirmed the imposition of penalty. The learned counsel appearing for the Appellant would submit that this is a fit case for compounding the offence committed by the Company represented by its Managing Director in the light of the subsequent liberalisation of policy of the Central Board of Direct Taxes. A particular reference has been made to press release dated 17.09.2022. The contents of which reads as under: CBDT issues Revised Guidelines for compounding of offences under the Income-tax Act, 1961 In conformity with the Government's pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on made therein and to pass appropriate orders in accordance with law, within a period of 60 days there from and in respect of same assessee, this Court in the case of K.M.Mammen Vs. Principal Commissioner of Income Tax reported in 2022 445 ITR 266 has given the positive direction to compound the offence. It is the further submitted that it cannot be said that there was a major fraud, scam or misappropriation as is contemplated under Clause 4.4 (b) of the Circular of the Board and therefore this is a fit case for compounding the offence. It is further submitted that exceptions under Circular dated 16.05.2008 is not attracted. 5. The impugned decision of the 1st Respondent is defended by the learned counsel for the Revenue stating that as far as jurisdiction is concerned, the petitioner has not raised any objections before the Respondents. It is further stated that the learned Single Judge while dismissing the Writ Petition has considered all the issues and has rightly dismissed the Writ Petition and therefore it does not require interference. That apart it is submitted that notice for initiating prosecution under Section 279 of the Income Tax Act was issued as early as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies or any other sum payable relating to default is paid and the applicant under takes to pay the compounding fee as per para 9.5. 36. As per para 9.5 of F.No.285/90/2008-IT (Inv.)/12 dated 16th May 2008, 50% of the tax sought to be evaded is to be paid as compounding fee for the offence under Section 276(1) of the Income Tax Act. Similarly, para 9 also deals with offence under Section 277 of the Income Tax Act, 1961. Therefore, the petitioner can be directed to pay the amount as may be determined by a Competent Officer. 37. As per para 4.4 (g) of Circular in F.No.285/90/2008-IT (Inv.)/12 dated 16 th May, 2008, cases are not to be compounded if CCIT/DGIT considers any other ground relevant for not accepting the compounding petition, in view of the nature and magnitude of the offence. It is clear that discretion can be exercised for compounding the offence. Normally, offences involving serious cross-border transaction are not to be compounded. However, discretion can be exercised. 38. Both 2015 or 2019 guidelines are strictly binding on the authorities. They are intended to guide officers to bring a closure of cases where there are extenuating circumstance for compoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted November 30, 1990 in both the cases and dismiss the writ petitions filed by Tiwari and Passi. No costs. 40. The petitioner is now over 70 years and has been facing prosecution for over a period of last one decade for an offence allegedly committed by him during 2001-2002 for the relevant assessment year 2002-2003. 41. Earlier, the petitioner faced, adjudication proceeding both under Section 148 and penalty proceeding under Section 279(2) of the Income Tax Act, 1961. The petitioner has paid the tax interest and the penalty imposed on him. Though, the petitioner has paid the penalty, the petitioner has filed an appeal against order of CIT (Appeals) confirming imposition of penalty to the extent of 100% of the tax. The Department is also in appeal as mentioned above. 42. The 2019 Circular which has been pressed against the petitioner in the impugned order makes it clear that there is a fair amount of discretion vested with the fourth respondent. Even in the case covered by para 8, the phrase used is offence normally not to be compounded . Thus, even these cases can be compounded. 43. In Prem Dass Vs. ITO, (1999) 5 SCC 241 , the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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