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TMI Blog2023 (12) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... r u/s 119 of the Income Tax Act, 1961. The power to compounding offences is vested with the Principal Chief Commissioner or Chief Commissioner or Principle Director General or Director General of Income Tax u/s 279 of the Income Tax Act, 1961 In The Chairman, Central Board of Direct Taxes and Others Versus Umayal Ramanathan, [ 2009 (4) TMI 36 - MADRAS HIGH COURT] Court allowed the case of the petitioner taking note of the fact that during the pendency of an appeal against the conviction order before the Principal Sessions Judge s Court, an Application was filed on 09.04.2012 under Section 279(2) of the Income Tax Act, 1961 for compounding of the offence. There also the application for compounding of offence was earlier rejected on the ground that the petitioner therein had been convicted of the offence. It was held that the rejection of the compounding application during the pendency of the appeal was not justified merely because the applicant/the writ petitioner therein was convicted by the Trial Court of the offence. In Inbavalli Vs The Government of India, Ministry of Finance, Department of Revenue. [ 2016 (9) TMI 209 - MADRAS HIGH COURT] rendered reported in Manu/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence would also send wrong signal in the society. There has to be deterrent effect not only on the petitioner from committing similar offence in future but also on others from committing such offence by taking the tax laws casually. - Honourable Mr. Justice C. Saravanan For the Petitioner : Mr.Srinath Sridevan Senior Counsel for Ms. Anitha Suresh For the Respondent : Mr.V.Mahalingam Senior Standing Counsel ORDER By this order, the writ petition is being disposed. 2. Heard the learned Senior Counsel for the petitioner and the learned Senior Standing Counsel for the respondent at length. 3. The petitioner is aggrieved by the impugned order bearing DIN Order No.: ITBA/COM/F/17/2022-23/1044336512(1) dated 30.07.2022 passed by the respondent rejecting the compounding application filed by the petitioner on 20.11.2019. 4. By the impugned order dated 30.07.2022, the aforesaid application filed by the petitioner has been rejected with the following observations:- 16. On the merits of the case, the RCC observed that the assessee had committed not one but multiple grave offences, which is exemplified by the elaborate contents of the conviction order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the above mentioned decisions of this Court. 9. The learned Senior Counsel for the petitioner further refers to a recent decision of the Hon'ble Division Bench of this Court rendered in the case of M/s.C.R.N. Investments Private Limited Vs. The Chief Commissioner of Income Tax-1 and another vide its order dated 28.09.2022 in W.A.No.1750 of 2022. 10. It is submitted that although the petitioner had suffered adverse orders both in the hands of the adjudicating authority and the appellate authority and was convicted by the Additional Chief Metropolitan Magistrate Court, Economic Offences-1, Egmore, Chennai 600 008 vide order dated 06.03.2019 in EOCC No.184 of 2017, the impugned order was unsustainable as the petitioner has paid the disputed tax, penalty and interest. 11. It is submitted that there are no arrears as on date. It is further submitted that the rejection of the compounding application filed by the petitioner is both contrary to the guidelines in F.No.285/08/2014- IT(Inv.V)/147 dated 14.06.2019 issued by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India and a further relaxation of time given for filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be punishable u/s.276(1) of Income Tax Act, 1961, and, 2) for the offence of knowingly making false statement of without disclosing the information regarding investment in the Income Tax Return, which punishable u/s.277 of Income Tax Act, 1961; and 3) for the offence of knowingly given false verification in Income Tax Return which is punishable u/s.277 of Income Tax Act, 1961, and 4) for the offence of failure to furnish Return of Income in time, in spite, of notices, punishable u/s.276CC of Income Tax Act, 1961, and 5) for the offence of failure to furnish the accounts and documents as called for, to be punishable u/s.276D of Income Tax Act, 1961. 19. The learned Senior Standing Counsel for the respondent has also placed reliance on the following decisions:- (i) Ramesh Jain Vs. Union of India , [2023] 146 Taxmann.com 320 (Madhya Pradesh) (ii) Viraj Exports (P.) Limited Vs. Chief Commissioner of Income (TDS) , [2022] 142 Taxmann.com 285 (Delhi) (iii) Union of India Vs. Banwari Lal Agarwal , [1999] 238 ITR 461 (SC) (iv) Punjab Rice Mills Vs. Central Board of Direct Taxes , [2011] 12 Taxmann.com 225 (Punjab Haryana) (v) Shree Sonal Gum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn, the respondents have allowed the offences to be compounded. 23. That apart, it is submitted that the earlier decisions rendered in the context of 2008 circular bearing F.No.285/90/2008-IT (Inv.)/12, Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, Room No.243F, North Block, New Delhi, dated 16th May 2008 is pari materia with Clause 8.1 (iii) and (xiii) of Circular bearing F.No.285/08/2014-IT(Inv.V)/147 dated 14.06.2019 issued by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India. Hence, it is prayed that this is a fit case for exercising the power under Article 226 of the Constitution of India in favour of the petitioner by quashing the impugned order and to grant consequential relief to the petitioner by allowing this writ petition. 24. I have heard the learned Senior Counsel for the petitioner and the learned Senior Standing Counsel for the respondent. I have also perused the impugned order. 25. In the present case, the impugned order has been passed by the Chief Commissioner of Income Tax. A reading of the impugned order indicates that it has been passed by placing re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was filed on 09.04.2012 under Section 279(2) of the Income Tax Act, 1961 for compounding of the offence. 29. There also the application for compounding of offence was earlier rejected on the ground that the petitioner therein had been convicted of the offence. It was held that the rejection of the compounding application during the pendency of the appeal was not justified merely because the applicant/the writ petitioner therein was convicted by the Trial Court of the offence. 30. In Inbavalli Vs The Government of India, Ministry of Finance, Department of Revenue, this Court vide its order dated 18.8.2016 in W.P.No. 24588 of 2016 rendered reported in Manu/TN/ 1996/2016 followed the above mentioned decision and allowed the case of the petitioner therein. 31. There, the Court took note of the fact that the petitioner was a lady aged more than 70 years of age and had lost her husband and only son and was the sole proprietor of a small firm dealing in electrical and electronic appliances while allowing the writ petition. 32. The Court in both the above mentioned cases did not take note of the aforementioned circular issued under Section 119 of the Income Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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