Case Law Details
Ruben Jeyasankari Vs Chief Commissioner of Income Tax (Madras High Court)
Madras High Court recently passed a judgment in the case of Ruben Jeyasankari Vs Chief Commissioner of Income Tax-4. The petitioner sought compounding of an offence under Section 276CC of the Income Tax Act, 1961, related to the non-filing of returns.
The petitioner filed the compounding application on 31.10.2022, urging swift consideration and disposal. However, the senior standing counsel, R.S.Balaji, opposed, citing guidelines from the Central Board of Direct Taxes and referring to a Delhi High Court judgment.
The Court examined Section 279(2) of the Income Tax Act, which allows compounding either before or after the institution of proceedings. Despite guidelines and references, the Court clarified that the statute doesn’t bar consideration of the compounding application for offences under Chapter XXII.
Expressing no opinion on the merits, the Court directed the 1st respondent to expeditiously consider and dispose of the compounding application, ideally within two months from the date of the order.
In conclusion, the Madras High Court’s judgment emphasizes the applicability of Section 279(2) in compounding offences under Chapter XXII. The directive for swift consideration underlines the court’s commitment to ensuring a timely resolution without expressing any stance on the application’s merits.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner had filed an application for compounding an offence under Section 276CC of the Income Tax Act, 1961 (the Income Tax Act) in respect of non filing of returns.
2. Learned counsel for the petitioner invited my attention to the application for compounding which was filed on 31.10.2022 and seeks the expeditious consideration and disposal thereof.
3. R.S.Balaji, learned senior standing counsel, opposes this request by referring to guidelines issued by the Central Board of Direct Taxes on 16.09.2022 to the effect that penalty proceedings should be concluded before a compounding application is decided. He also relies on the judgment of the Delhi High Court in Assistant Commissioner of Income-tax v. Nilofar Currimbhoy, [2013] 35 taxmann.com 99 (Delhi).
4. Sub-section (2) of Section 279 of the Income Tax Act enables the compounding of any offence under Chapter XXII either before or after the institution of proceedings by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General. Since the relevant offence is clearly an offence that falls under Chapter XXII, the statute does not place an embargo on the consideration of the application for compounding.
5. Therefore, without expressing any opinion on the merits of the compounding application, the 1st respondent is directed to consider the compounding application dated 31.10.2022 and dispose of the same expeditiously, preferably within a period of two months from the date of receipt of a copy of this order.
6. The writ petition is disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petition is closed.
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