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2017 (4) TMI 621 - HC - Income TaxPayment of the compounding fee - Held that:- The CBDT cannot arrogate to itself, on the strength of Section 279 or the Explanation thereunder, the power to insist on a 'pre-deposit' of sorts of the compounding fee even without considering the application for compounding. Indeed Mr Kaushik was unable to deny the possibility, even if theoretical, of the application for compounding being rejected despite the compounding fee being deposited in advance. If that is the understanding of para 11(v) of the above Circular by the Department, then certainly it is undoubtedly ultra vires Section 279 of the Act. The Court, accordingly, clarifies that the Department cannot on the strength of para 11(v) of the Circular dated 23rd December 2014 of the CBDT reject an application for compounding either on the ground of limitation or on the ground that such application was not accompanied by the compounding fee or that the compounding fee was not paid prior to the application being considered on merits. The question of payment of the compounding fee, if any, would arise, only if upon considering the application on merits, the Department is of the view that the prayer should be allowed subject to terms that are reasonable and subserve the object of Section 279 of the Act. Whether in the garb of a Circular the CBDT can prescribe the compounding fee in the absence of such fee being provided for either in the statute or prescribed under the rules? - However, at this stage when the Petitioner's application is yet to be decided afresh, the said question may be academic. The Court, accordingly, while directing the CCIT to consider afresh the Petitioner’s application for compounding of offence under Section 279 of the Act and communicate to the Petitioner the decision thereon in writing consistent with the present judgment, within a period of six weeks from today, leaves it open to the Petitioner to urge the larger question which has not been decided in this writ petition in the event that the Petitioner is aggrieved by the fresh order passed by the CCIT.
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