News Update

Aadhaar & GST glitches should trigger IT Infrastructure Protection ReviewData Protection Framework - Panel to hold public consultation on TuesdayCrypto row gains new ‘currency’; CBDT finds it cryptic; Notices issued to investorsGovt appoints Anandiben Patel as MP GovernorExport of onions allowed on LC with M. E. P of USD 700 FOB per MT with immediate effect till 20.02.2018Silvassa tops List of winner Smart CitiesMinister launches Cyber Surakshit Bharat to strengthen CybersecurityIndia welcomes IMF-WB Report on improving banking supervision by RBI100 accessible websites of various State Govts launchedJaitley launches National CSR Data Portal & Corporate Data PortalGovt appoints Amardeep Singh Bhatia as Director of Serious Fraud Office till March, 2020Turmoil in AAP - Election Commission favours disqualification of 20 MLAs for holding office of profitMauritius continues to be key source of FDI in India; followed by USA & UK: RBII-T - Discretionary waiver of interest charged u/s 234A to 234C by Settlement Commission, will not negate corresponding right for refund of interest to assessee: SCIntl Customs Day: 20 persons, including 17 officers, to get WCO Certificate of MeritGST - Coffee beans processing units in trouble; seek exemptionGST Council also approves several amendments in CGST RulesGST Council grants mega relief to healthcare services & clarifies rates for many ServicesI-T - Finance cost incurred on overdraft obtained from bank, which is advanced to sister concern for no business purpose, is not allowable business loss: ITATSteering clear of Anti - Profiteering chargesIssues affecting Credit Card Industry – Budget 2018 should provide solutionsGovt amends Passport Rules to substitute certain documents to be attached under Tatkal & non-Tatkal schemes17 lakh Composition taxpayers paid only about Rs 307 Crore; Council expresses disappointmentLegislative changes - Council receives demand to introduce Sec 9(4) only for Composition taxpayers
 
I-T - Application for compounding of offence cannot be rejected on ground of limitation, when no such limitation period is prescribed under CBDT circular issued in that behalf: HC

By TIOL News Service

NEW DELHI, APRIL 21, 2017: THE ISSUE IS - Whether an application for compounding of offences can be rejected on the ground of limitation when no such limitation period is prescribed in the CBDT circular issued in that behalf. NO is the verdict.

Facts of the case:

The present writ petition was filed at a stage when the Petitioner's application for compounding of offences u/s 279 (2), was still pending. In response to the Petitioner's application, he was sent the a communication. In terms thereof, the Petitioner was required to pay a sum of Rs. 69, 67,699/- even for his application to be considered. This was purportedly in terms of a circular dated 23rd December, 2014 issued by CBDT issuing the guidelines for compounding of offences under Direct Taxes Law & Practice, 2015. The Petitioner contends that the above levy of compounding charges of nearly Rs. 70 lakhs, even before its application could be considered was exorbitant and without any authority of law. In those circumstances, the present writ petition, sought the quashing of the above circular and, in particular, para 12 thereof which sets out the fee for compounding.

In response to the notice issued in the present writ petition, a reply was filed by the Department setting out the basis for calculation of the compounding charges. Enclosed with the counter affidavit is an order dated passed by the CCIT declining the Petitioner's application for compounding of offences u/s 275C(1), 276C(2) & 277 on the ground that "there is inordinate delay of 9 years in filing of application for compounding of offences by the assessee. On the strength of the above order, it was urged by the counsel that the rejection of the application for compounding was not on the ground of failure to pay the compounding fee, but on the ground of the delay in filing the application.

On appeal, the HC held that,

++ the circular dated 23rd December, 2014 does not stipulate a limitation period for filing the application for compounding. What the said circular sets out in para 8 are "Offences generally not to be compounded". In this, one of the categories which is mentioned in sub-clause (vii) is: "Offences committed by a person for which complaint was filed with the competent court 12 months prior to receipt of the application for compounding". The above clause is not one prescribing a period of limitation for filing an application for compounding. It gives a discretion to the competent authority to reject an application for compounding on certain grounds. Again, it does not mean that every application, which involves an offence committed by a person, for which the complaint was filed to the competent court 12 months prior to the receipt of the application for compounding, will without anything further, be rejected. The grounds on which an application may be considered, should not be confused with the limitation for filing such an application. The reason given in the impugned order dated 3rd November, 2016 for rejection of the Petitioner's application does not satisfy the criteria spelt out in the guidelines issued by the Department by its Circular dated 23rd December 2014. It has proceeded on a ground that is not available to the Department viz., that the application is inordinately delayed. Since there is no other reason given for the rejection of the application, the Court is unable to sustain the order dated 3rd November, 2016 of the CCIT by which the Petitioner's application for compounding was rejected. The said order is hereby set aside. The Petitioner's application for compounding will have to considered afresh by the CCIT.

(See 2017-TIOL-771-HC-DEL-IT)


POST YOUR COMMENTS