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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 ..... ents of the conviction order passed by Additional Chief Metropolitan Magistrate, Economic Offences-1, Egmore, Chennai - 600 008 in EOCC No.184 of 2017 dated 06.03.2019. The assessee did not file the return of income voluntarily before the due dates specified under section 139 of the IT Act. There was no response to the notices u/s 142(1) calling for return of income and information with regard to investment made in shares, expenditure incurred on credit cards etc. The assessment was completed u/s 144 of the IT Act after carrying out enquiries and obtaining additional particulars from banks on a taxable income of Rs. 46,32,210/- raising a demand of Rs. 38,45,340/-. It can be seen that the taxable income was arrived at Rs. 46,32,210/- by making additions u/s 69 of the IT Act in respect of unexplained investment in shares and credit card expenditure u/s 2(24)(4) of the IT Act." 5. Arguing on behalf of the petitioner, the learned Senior Counsel would submit that the issue is no longer res integra and has been settled by plethora decisions of this Court in the following cases:- (i) The Chairman, Central Board of Direct Taxes and others Vs. Umayal Ramanathan, MANU/TN/0829/2009, order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation under direct tax laws vide a Circular No.25/2019 dated 09.09.2019. Hence, the learned Senior Counsel for the petitioner prays for quashing the impugned order and for allowing the writ petition. 12. Defending the impugned order, the learned Senior Standing Counsel for the respondent has submitted that the petitioner is a recalcitrant assessee inasmuch as the petitioner had failed to file Returns of Income in time under Section 139(1) or 139(4) of the Income Tax Act, 1961. 13. It is submitted that the petitioner has also failed to cooperate with the Department as a result of which, proceedings came to be initiated, which was culminated in the Assessment Order dated 27.03.2000 passed by the Deputy Commissioner of Income Tax under Section 144 of the Income Tax Act, 1961. 14. It is submitted that the petitioner was imposed with tax, penalty and interest. Further appeal filed by the petitioner in IT Appeal No.31/2000-2001 was also dismissed by the Appellate Commissioner, the Commissioner of Income Tax (Appeals-II) on 06.12.2000. 15. It is submitted that further appeal filed by the petitioner before the Income Tax Appellate Tribunal (ITAT) in I.T.A. No.354/Mds/2001 was also rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat) (vi) Income-tax Officer Vs. Dr.K.Jagadeesan, [2001] 118 Taxman 499 (Mad.) 20. The learned Senior Standing Counsel also referred to a guide lines issued in the context of the last mentioned case vide Instruction No.5256, dated 20.10.1995, wherein, it has been clarified as follows:- "The existing guidelines for compounding of offences under the Direct Tax Laws were issued vide F.No.285/161/90-IT (Inv.), dated 30-9- 1994 and were circulated under a separate forwarding letter of every number and date. These guidelines do not cover cases of withdrawal of prosecutions once initiated. The Board has been receiving a number of proposals from Chief Commissioners for withdrawal of prosecution in the event of the Revenue losing its case in appeal either in respect of penalty or quantum or both. In this connection, it has been decided that in cases where either the quantum additions and/or penalty by the Appellate Authorities and such decisions have been accepted by the Department, the CCIT would, instead of forwarding to the Board the proposals/requests for withdrawal of prosecution, direct that the relevant facts and changed circumstances be brought to the notice of the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and law are clear. Under section 279 (2) of the Income Tax Act, 1961, the Principal Chief Commissioner or Chief Commissioner or the Principal Director General of Income Tax or Director General of Income Tax may compound any offence under Chapter XXII either before or after institution of proceedings. For the aforesaid purpose, the Central Board of Direct Taxes has issued circular under Section 119 of the Income Tax Act, 1961. 27. 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 under Section 279 of the Income Tax Act, 1961. Relevant clauses from Clause 4 of Circular dated 16th May 2008 and Clause 8 of Circular dated 14th June 2019 read as under:- Sl. No. Clause 4 of Circular dated 16th May 2008 Clause 8 of Circular dated 14th June 2019 1 Clause 4: Eligibility conditions for consideration of a case for compounding The following conditions should be satisfied before considering a case for compounding: 4.4 Cases not to be compounded:- Notwithstanding anything contained in the guidelines, the following cases should normally not be compounded:- f) Where convic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stituted against the petitioner for violation of the provisions of the Income Tax Act, 1961. 34. These decisions cited by the learned Senior Counsel for the petitioner therefore do not come to his rescue. The circular of the Board also makes it clear that there is no scope for compounding of the offences, if there was a conviction of the person by a court of law under direct tax laws. Further, the application is belated. 35. The petitioner has taken a chance all the way up to the Income Tax Appellate Tribunal and waited for an order of conviction by the Economic Offences Court on 06.03.2019 in EOCC No.184 of 2007. 36. The decision of the Delhi High Court in Vikram Singh versus Union of India, (2017) 394 ITR 746 also does not lay down any general principle of law to be followed by Courts. Para 9 of the said decision which has been highlighted is of no relevance. 37. The decision of the Court rendered in Ram Prakash Khemka Vs Commissioner of Income Tax, [2007] 295 ITR 33 relied upon by the counsel for the respondent dealing with an identical situation also impels this Court to dismiss this writ petition. 38. To allow compounding of the offences at this stage merely because the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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