Case Law Details
Maspar Industries Private Limited Vs CCIT TDS (Delhi High Court)
Department has compounded the offences pertaining to late deposit of Tax Deducted at Source (TDS) committed by petitioner under Section 279(2) of the Act at the rate of five per cent compounding charges. Petitioner states that levying compounding charges at the rate of five per cent instead of the usual rate i.e., three per cent is in contravention of the Circular dated 23rd December, 2014 issued by the Department of Revenue, Central Board of Direct Taxes, Ministry of Finance, Government of India.
This Court is of the opinion that the guidelines issued by the CBDT clearly stipulate that after compounding of the first offence, if the same person comes forward for compounding of another offence through any subsequent application, the applicable rate will be five per cent instead of three per cent. This Court is also of the view that the expression “after compounding of the said offence” means when the offence has been compounded, meaning thereby, not only the stage after the compounding order has been passed but also after the conditions stipulated in the said order have been complied with like payments. In fact, there is a rationale behind imposing a higher rate for subsequent offences as the respondents want to incentivize compliance and want the public to deduct TDS and pay to the Government.
Since, in the present case, the petitioners company is a ‘repeat offender’, this Court is of the view that the respondents are entitled in law to impose a higher compounding fee i.e. five per cent instead of three per cent. Accordingly, the first submission advanced by learned senior counsel for the petitioner is rejected.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
