Application For Compounding Of Offence Under Section 276CC Income Tax Act Cannot Be Rejected If Conviction Is Set Aside By The Special Judge:Delhi HC
A Bench of the Delhi High Court, consisting of Justices Manmohan and Navin Chawla, has ruled that an application seeking compounding of the offence under Section 276CC of the Income Tax Act, 1961 could not be rejected on the ground that the Assessee had not been acquitted of the criminal charges, if his conviction with respect to the given offence has been set aside by the Special...
A Bench of the Delhi High Court, consisting of Justices Manmohan and Navin Chawla, has ruled that an application seeking compounding of the offence under Section 276CC of the Income Tax Act, 1961 could not be rejected on the ground that the Assessee had not been acquitted of the criminal charges, if his conviction with respect to the given offence has been set aside by the Special Judge, CBI.
The Assessee had filed an application before the Chief Commissioner of Income Tax (Appeals) (CCIT(A)) seeking compounding of offence under Section 276CC of the Income Tax Act, 1961. The said application was rejected by the CCIT (A) on the ground of expiry of limitation period and the conviction of the Assessee by the Additional Chief Metropolitan Magistrate (ACMM), Delhi. Thereafter, the Assessee had filed an appeal against the order of the ACMM before the Special Judge, CBI who had set aside the conviction order and had directed the ACMM to consider the fresh documents filed by the Assessee and pass a fresh order. Simultaneously, the Assessee had filed an application before the CCIT (A) seeking review of the order rejecting the application for compounding of offence, which was rejected by the CCIT (A) on the ground that the conviction of the Assessee was still open for adjudication and that he had not been acquitted of the criminal charges. The Assessee had filed an appeal before the Delhi High Court against the impugned order of the CCIT (A) rejecting the review application.
The counsel for the Assessee submitted that in view of the CBDT Circular of 2019 (Circular No.25/2019 dated 09.09.2019), wherein a concession of 12 months for filing an application seeking compounding of offences was granted, the objection of limitation cannot be raised by the CCIT (A). Also, it was submitted that the review application was rejected on false grounds since the conviction of the Assessee had been set aside by the Special Judge. The counsel for the CCIT (A) had submitted that the Assessee was not entitled to compounding of offences since there was a deliberate delay in filing the income tax returns.
Section 276CC of the Income Tax Act, 1961 provides that if a person wilfully fails to furnish the income tax return in due time, he shall be punished with the prescribed imprisonment.
The High Court held that in view of the CBDT circular of 2019 the objection on the ground of limitation raised by the CCIT (A) could not survive. Also, the High Court held that in view of the order passed by the Special Judge in which it had set aside the conviction of the Assessee, the impugned order of CCIT (A) dismissing the application seeking review was untenable in law. The High Court held that the application seeking compounding of the offence could not be rejected on the ground that the Assessee had not been acquitted of the criminal charges in view of the fact that his conviction was set aside by the Special Judge.
The High Court set aside the impugned order of the CCIT (A) and directed it to consider the application of the Assessee seeking compounding of offence under Section 276CC of the Income Tax Act in accordance with law.
Case Title : Jai Singh Goel Versus Chief Commissioner Of Income Tax(Central)
Counsel For Assessee: Satyen Sethi And Arta Trana Panda.
Counsel For Revenue Department: Vibhooti Malhotra, Shaliender Singh And Udit Sharma
Citation: 2022 LiveLaw (Del) 175