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TMI Blog2024 (7) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... nt obtained a Consolidated Share Certificate from M/s. Sai Televisions Limited which was issued on 31.01.1997. In the circumstances, the IT Department issued a notice under Section 142(1) of the Income-tax Act, 1961 ("the Act", in short) dated 01.07.1999 calling upon the appellant to furnish certain details and accordingly, furnished Return of Income, Bank Statements and Tax statements on 12.07.1999 together with a letter, in which, the reason for the delayed filing of the return of income was mentioned. According to the appellant, the Department disregarded the particulars given by him and passed an Assessment Order dated 27.03.2000 under Section 144 of the Act mainly stating that there is no proof of investment of shares in the year 1995 either in the books of accounts of the appellant or M/s. Sai Televisions Limited and that the source of funds for investment has also not been substantiated. 2.2. Aggrieved by the Assessment Order dated 27.03.2000, the appellant filed an appeal before the Commissioner of Income-tax (Appeals) and the same was dismissed. Further appeal preferred by the appellant before the Income-tax Appellate Tribunal also ended in dismissal. With regard to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uant to the same, after issuing notice to the appellant for personal hearing and upon hearing the submissions of the appellant, the respondent passed an order dated 30.07.2022 rejecting the application. Aggrieved by the same, the appellant filed W.P. No. 21387 of 2022, which, by order dated 17.11.2023, was dismissed by holding that the appellant is not eligible for compounding of the offences. Challenging the order of dismissal dated 17.11.2023, the present appeal is filed by the appellant / assessee. 3. The learned senior counsel appearing for the appellant submitted that the learned Judge ought to have seen that there was no occasion for the appellant to apply for compounding earlier. Since the window for seeking compounding was opened only under Circular No.25 of 2019 bearing F.No. 285/08/2014-IT(Inv.V)/350 dated 09.09.2019, which extended the timelines under Para 7 (ii) of Guidelines dated 14.06.2019 bearing F.No.285/08/2014- IT(Inv.V)/147, it is not correct on the part of the learned Judge to find fault with the appellant for not availing the concession for compounding. The learned Judge also erred in not following the judgments reported in (i) The Chairman, CBDT and Others v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in 2016 SCC OnLine Mad 21722; (c) V.A. Haseeb and Co. (Firm) vs. The Chief Commissioner of Income Tax TDS, reported in MANU/TN/2175/2016. This judgment was passed based on the judgment in the case of Umayal Ramanathan, supra; (d) Vikram Singh vs. Union of India and others, reported in 2017 SCC OnLine Del 7826, wherein it is held that Circulars cannot prescribe a limitation for filing a compounding application; (e) W.P. No. 35826 of 2016 dated 11.11.2020 in the case of V.K. Lohia vs. Chief Commissioner of Income Tax, wherein, in respect of the issue as to whether the non-cooperation of the party at the initial stage of the proceedings would dis-entitle him for relief in terms of guidelines 3 read with 4.4 (g) of the Circular in F. No. 285/90/2008-IT(Inv.)/12 dated 16.05.2008 issued by CBDT, it was held that it would have to be examined with reference to the well known canons of the principles of natural justice that no material could be relied against a person without affording him an opportunity to explain his position before taking any decision; (f) W.A. No. 1767 of 2022 dated 11.12.2023, in the case of The Principal Commissioner of Income Tax and others vs. K.M.Mammen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is attempting to feign ignorance over Para 8(1)(iii) of the Guidelines dated 14.06.2019 and Para 4.1(ii) of Circular dated 09.09.2019 which categorically holds that such relaxation shall not be available in respect of an offence committed by the person who is already convicted by a Court of Law under the Direct Tax Law. The Guidelines and Circular prohibit the appellant from seeking relief by compounding the offences as the Regional Committee for Compounding of Offences is not authorised for granting such immunity when the appellant stands convicted at the time of application. The process of deliberating on a compounding application is time consuming and reports from subordinate authorities are required to conclude the entitlements and fulfilment of conditions. 4.1. The learned senior standing counsel further submitted that the appellant is not entitled to the benefits of Circular No.25 dated 25.11.2019 in view of Para 4.1(ii) of the said Circular. The appellant is not entitled to compounding of offences in view of the conduct of the assessee in responding to the requisitions made by the Department for filing the return of income and calling for the details, but for the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it will make the prosecution proceedings meaningless. 4.3. The learned senior standing counsel for the respondent relied upon the following decisions in support of his contentions: (a) Judgment of the High Court of Madhya Pradesh in Ramesh Jain vs. Union of India, reported in (2023) 146 taxmann.com 320 (Madhya Pradesh); (b) Judgment of the High Court of Delhi in the case of Viraj Exports (P) Ltd. vs. Chief Commissioner of Income (TDS), reported in (2022) 142 taxmann.com 285 (Delhi); (c) Judgment of the High Court of Punjab and Haryana in Punjab Rice Mills vs. Central Board of Direct Taxes, reported in (2011) 12 taxmann.com 225 (Punj. & Har.); (d) Judgment of the High Court of Gujarat in Shree Sonal Gum Industries vs. Income-tax Officer, reported in (2000) 112 Taxman 509 (Gujarat); and (e) Judgment of the High Court of Delhi in Sangeetha Exports (P) Ltd. vs. Union of India, reported in (2008) 173 Taxman 21 (Delhi). 5. Heard the learned counsel for the appellant and the learned counsel for the Department and also perused the records carefully and meticulously. 6. It was submitted by the learned counsel for the assessee before the learned Judge that the order denying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpounding can be filed after the end of 12 months from the end of the month in which the complaint is filed. The relaxation of time for filing of compounding petition as provided in Para 4.1(ii) of the Circular No.25 of 2019 dated 09.09.2019 of the CBDT is also not applicable in the case of assessee since such relaxation shall not be available in respect of an offence which is generally / normally not compoundable, in view of para 8.1 of the guidelines dated 14.06.2019. 2. The three case laws referred to by the assessee were considered and found to be distinguishable on facts. There was wilful attempt on the part of the assessee to conceal his income and evade tax and there was no cooperation by the assessee during the assessment proceedings which resulted in assessment being completed ex-parte under section 144 of IT Act." 10. The guidelines dated 14.06.2019 para 8.1 was also taken note of and it reads as follows:- "8.1 The following offences are generally not to be compounded: i. Category 'A' offence on more than three occasions. However, in exceptional circumstances compounding requested in more than three occasions can be considered only on the approval of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring on any offence under the Benami Transactions (Prohibition) Act, 1988. xiii. Any other offence, which the Pr.CCIT/CCIT/ Pr.DGIT/DGIT concerned considers not fit for compounding in view of factors such as conduct of the person, nature and magnitude of the offence." 11. Thus, the respondent has given a categorical finding that the appellant made an unaccounted investment of Rs. 10,00,000/- in the shares of M/s.Sai Televisions Limited in the accounting year relevant to the Assessment Year 1997-98. The Department has also proved it before the Court and the appellant was also held guilty of the offence and accordingly punishment and fine were imposed on the appellant. The fact remains that the appellant had not filed any return of income voluntarily offering the above said income of Rs. 10,00,000/- at the relevant point of time. Thus, there was deliberate concealment of actual income by the assessee to evade taxes and deliberate filing of false return. Therefore, the RCC in the order dated 30.07.2022, rejected the claim of the assessee, observing in Paragraph Nos.16 to 21 as follows:- "16. On the merits of the case, the assessee had committed not one but multiple grave offences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce accounts and documents and has not exonerated the assessee of any of the above offences, lends credence to the fact that the assessee has deliberately evaded tax and given false statements during the assessment proceedings. 20. The RCC is of the view that the assessee's prayer for sympathetic consideration of his petition for compounding of offence, is bereft of any merit as the wilful attempt of the assessee to conceal his income and evade tax, is clearly established. Moreover, the assessee has not adduced any compelling circumstances which were beyond the control of the assessee so as to consider his compounding petition sympathetically. The claim that the assessee paid all the taxes due voluntarily is technically incorrect as the major portion of the tax demand for the AY 1997-98 has been collected through adjustments of earlier year refunds. The assessee has been through out evasive and non-cooperative and expecting leniency at present was, according to the committee, a bygone or departed position and thus cannot be considered." 12. With regard to compounding of offences, Para 8(1)(iii) of the Guidelines dated 14.06.2019 and Para 4.1(ii) of Circular dated 09.09.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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