Income Tax Compounding Application Cannot Be Rejected Solely on Delay

Kabir Ahmed Shakir Vs Chief Commissioner of Income Tax (Madras High Court)

Madras High Court has overturned an order by the Chief Commissioner of Income Tax that rejected a compounding application filed by Kabir Ahmed Shakir. The rejection was based on a delay beyond the time limit specified in a Central Board of Direct Taxes (CBDT) circular. The court ruled that Section 279(2) of the Income Tax Act, 1961, which governs compounding of offenses, does not prescribe any time limit for filing such applications.

The petitioner argued that the CBDT circular’s time limit cont

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