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TMI Blog2024 (1) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the tax deducted at source to the credit of the Central Government within prescribed time limit on the same ground, for which such offence was committed for earlier assessment years 2013-2014, 2015-2016 and 2016-2017. AO could not have held that the petitioner has failed to furnish convincing reason for its default of failure to pay TDS to the credit of the Central Government within prescribed time limit except financial hardships. The financial hardships also remained was the cause for the offences committed for earlier assessment years, which were permitted to be compounded. It is true that the petitioner has committed default continuously for five years for non depositing the TDS and for which, the petitioner is liable for compounding charges para 12 of the guidelines. Respondent authority therefore ought to have considered the case of the petitioner in terms of para 8.3 of the guidelines by putting stringent conditions for compounding the offence for the year under consideration after following the prescribed procedure of approval as para 10 of the guidelines. Impugned orders passed u/s 279 (2) are hereby quashed and set aside and the matter is remanded back to the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for late payment of TDS to the credit of Central Government for both the assessment years. The petitioner, thereafter, filed separate applications for compounding on 25.08.2020 in the prescribed format for the assessment year 2017-2018 and 2018-2019. The respondent by notice dated 25.02.2022 called upon the petitioner to show cause as to why the application for compounding of the offence for both the assessment years should not be rejected, which was replied by the petitioner on 08.03.2020 with a request to approve the application for compounding of offence punishable under Section 276B of the Act for both the assessment years. The respondent by the impugned order dated 17.03.2022 passed under Section 279(2) of the Act declined the prayer to compound the offence under Section 276B of the Act for the year under consideration. 5. Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that on perusal of the impugned order dated 17.03.2022, prayer to compound the offence under Section 276B of the Act is denied only on the ground that the petitioner has committed default of non depositing the TDS to the credit of the Central Government on habitual basis and failed to j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent to relax the restrictions in para 8.1 of the guidelines, which provides for offence is normally not to be compounded. 8. On the other hand, learned advocate Ms. Kinjal Trivedi for learned advocate Ms. Maithili Mehta for the respondent referred to and relied upon the following averments made in the affidavit-in-reply filed on behalf of the respondent:- The Petitioner, while furnishing details of offences which were earlier compounded in point 10 of the applications for A.Y 2017-18 2018-19, has categorically mentioned that the Petitioner had availed compounding facility twice on dated 28/08/2014 08/02/2018 meaning thereby that the Petitioner had availed the benefit of compounding on two occasions. Having regard to the above information of earlier availing compounding by the Petitioner, the available past record of the compounding of offence in the case of Petitioner was examined and it was found that the applicant had been committing default in depositing tax deducted at source to the credit of Central Government for F.Y's 2012-13, 2014-15 2015-16 relevant to A.Y 2013-14, 2015-16, 2016-17 and present default for A.Y 2017-18 and A.Y 2018-19. It was also seen that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrary to para 10 of the guidelines for compounding offence 2019, which reads as under:- 10. Authority Competent to Compound an Offence 10.1 The Pr. CCIT/CCIT/Pr. DGIT/DGIT having jurisdiction over the person, seeking Compounding of an Offence, is the Competent Authority for compounding of all Category 'A' and Category 'B' offences. However, an order in case of an application for compounding of an offence, involving compounding charges (as explained in Para 12 below) in excess of Rs.10,00,000/- (Rupees Ten Lakhs) shall be passed by the Pr. CCIT/CCIT/Pr. DGIT/DGIT concerned only on the prior approval of a Committee comprising of three officers of the Region concerned, namely Pr. CCIT/CCIT/Pr. DGIT/DGIT having jurisdiction over the case and two other Officers of the rank of Pr. CCIT/CCIT/Pr. DGIT/DGIT constituted by the Pr.CCIT of the Region. In case such officers are not available within the Region, a suitable Officer of the rank of CCIT/DGIT from any nearby Region may be co-opted as Member by the Pr. CCIT. 11. As the compounding fees for assessment year 2017-2018 is Rs.14,47,835/-, whereas compounding fees for the assessment year 2018- 2019 is Rs.20,11,141/- as cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. CCIT/CCIT/Pr. DGIT/DGIT concerned. v. The person undertakes to withdraw appeals filed by him, if any, related to the offence(s) sought to be compounded. In case such appeal has mixed grounds, one or more of which may not be related to the offence(s) under consideration, an undertaking shall be given for withdrawal of such grounds as are related to the offence to be compounded. vi. Any application for compounding of offence u/s 276B/276BB of the Act by an applicant for any period for a particular TAN should cover all defaults constituting offence u/s 276B/276BB in respect of that TAN for such period. 15. In the facts of the case, the petitioner has already deposited the outstanding tax interest and late fees and accordingly, the petitioner was eligible for compounding. 16. However, the respondent has relied upon the restriction on prescribed under para 8 of the guidelines, which reads as under:- 8. Offences normally not to be compounded 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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