Case Law Details
Sanjiv Gupta Vs Chief Commissioner of Income Tax (Central) & Anr (Delhi High Court)
Introduction: The Delhi High Court recently addressed a writ petition filed by Sanjiv Gupta challenging the rejection of his application for compounding offences under Sections 276C(1), 276D, and 277 of the Income Tax Act, 1961, relating to the Assessment Year 2006-07. The petitioner sought relief against the order dated 09.03.2018, as well as the subsequent rejection of his application for rectification on 30.05.2019.
Background: The crux of the matter lies in the contention that the petitioner failed to provide complete bank statements of accounts maintained in the Geneva Branch of HSBC Bank. The impugned order cited this as a reason for rejection, emphasizing the petitioner’s non-submission of consent waiver forms necessary to secure the bank statements.
Petitioner’s Stand: Sanjiv Gupta asserts that consent waiver forms were indeed submitted and refers to Annexure-P17, a covering letter dated 01.02.2017, as evidence. Moreover, the petitioner claims that bank statements for the relevant period (31.12.1993 to 24.03.2011) are available, even though they were furnished after the issuance of the impugned order.
Court’s Decision: The court, taking note of the available bank statements and the petitioner’s compliance with the consent waiver forms, set aside the orders dated 09.03.2018 and 30.05.2019. The court directed the concerned officer to reconsider the compounding application dated 22.02.2016, allowing the petitioner or his representative a personal hearing.
The court emphasized that the concerned officer should promptly adjudicate the compounding application within eight weeks of receiving the order, seeking any necessary additional information through written communication to the petitioner. A speaking order, detailing the decision, must be provided to the petitioner after the hearing.
Additionally, the interim order dated 18.11.2019 will continue to operate until the concerned officer makes a decision and for three weeks thereafter in case of an adverse order. The court explicitly stated that it refrained from expressing any opinion on the merits of the matter.
Conclusion: The Delhi High Court’s decision in the Sanjiv Gupta vs. Chief Commissioner of Income Tax case underscores the importance of a thorough reconsideration of the compounding application, now that the complete bank statements are available. The court’s directive aims to ensure a fair and just resolution of the matter in accordance with the law, allowing the concerned officer to make an informed decision based on all relevant information.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
This writ petition seeks to challenge the order dated 09.03.2018 passed by respondent no.1 under Section 279(2) of the Income Tax Act, 1961 [In short, “the Act”].
1.1. Via the said order, respondent no.1 rejected the application filed by the petitioner for compounding the offences punishable under Sections 276C(1), 276D and 277 of the Act inter alia, concerning Assessment Year (AY) 2006-07.
2. Besides this, challenge is also laid to the order dated 30.05.2019 passed by the respondent no.1 whereby the petitioner’s application for rectifying the order dated 09.03.2018 was rejected.
3. In addition to the aforesaid prayers, the petitioner has also sought issuance of mandamus to respondent no.1 for compounding the offences punishable under the aforementioned provisions for the period in issue.
3.1. However, in the alternative, the petitioner prays that respondent no.1 should consider de novo, albeit, in accordance with the law, the application dated 22.02.2016 filed by the petitioner, which was subject matter of the impugned order dated 09.03.2018.
4. An interlocutory prayer has also been made in the petition, whereby a direction was sought to stay further proceedings in the complaints with regard to the provisions of the Act referred to hereinabove.
5. A perusal of the impugned order dated 09.03.2018 would show that, in sum and substance, the petitioner’s application was rejected as, according to the concerned officer, the petitioner had failed to furnish the complete bank statements of the accounts maintained by him in the Geneva Branch of HSBC Bank.
5.1 The impugned order also refers to the fact that the respondents/revenue had offered to assist in securing the bank statements, however, for that purpose, consent waiver forms had to be submitted, which when provided to the HSBC Bank, would have enabled the respondents/revenue to secure the bank statements.
6. We may note that it is the stand of the petitioner that consent waiver forms were, in fact, provided. In this regard, our attention is drawn to Annexure-P17, which is a covering letter dated 01.02.2017. It is contended that once a request was made to furnish consent waiver forms, the petitioner submitted the same.
7. We are further informed by the petitioner that, in any event, bank statements for the period spanning between 31.12.1993 and 24.03.2011 of the accounts maintained by the petitioner with the aforementioned branch of the HSBC Bank are available.
8. Mr Shailendera Singh, learned senior standing counsel, who appears on behalf of the respondents/revenue, says that had the petitioner straightaway given the bank statements before the compounding application was considered, the matter would not have come to this pass.
9. We are informed that, the petitioner had furnished the bank statements in November, 2019 as well, albeit after the impugned order was passed.
10. Given the aforesaid position, we are of the view that the best way forward would be to direct the concerned officer to decide the petitioner’s compounding application afresh, since, in any event, the bank statements are now available with the respondents/revenue.
11. Accordingly, the impugned orders dated 09.03.2018 and 30.05.2019 are set aside.
12. The concerned authority will adjudicate the petitioner’s compounding application dated 22.02.2016 afresh. In case any further information is required, written communication(s) in that behalf will be addressed to the petitioner.
13. The petitioner and/or his authorised representative will also be accorded personal hearing in the matter by the concerned officer.
14. Needless to add, thereafter, the concerned officer will pass a speaking order; copy of which will be furnished to the petitioner.
15. The concerned officer will endeavour to dispose of the compounding application at the earliest, though not later than eight (8) weeks from the date of receipt of the order.
16. Till such time the concerned officer disposes of the compounding application dated 22.02.2016 and for a period of three (3) weeks thereafter, in case an adverse order is passed, the interim order dated 18.11.2019 will continue to operate.
17. The writ petition is disposed of in the aforesaid terms.
18.As is obvious from the reading the order, we have not expressed any opinion on the merits of the matter.
19. Parties will act based on the digitally signed copies of the order.
