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2022 (5) TMI 63 - HC - Income TaxCompounding offences pertaining to late deposit of Tax Deducted at Source (TDS) committed by the Petitioners herein under Section 279(2) - HELD THAT:- This Court is of the view that compounding of offences cannot be taken as the matter of right. It is for the law and authorities to determine as to what kind of offences should be compounded, if at all, and under what conditions. (See: Vikram Singh vs. Union of India & Ors. [2018 (1) TMI 1115 - DELHI HIGH COURT]) 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. Compounding fee is payable only by the main accused by treating Mr. Rakesh Kumar as the Principle Officer instead of all the Directors of the petitioners - This Court is of the view that matter requires examination especially in view of the fact that in the Year 2012-13 the compounding fee was levied only on one Director (Mr. Aman Gulati) and not on the other Directors. This Court is also of the view that if the Chartered Accountant who had represented the petitioner before the Commissioner did not have a power of attorney or a vakalatnama in his favour at the time when he had filed the written submission, the Commissioner should have given time to the authorized representative to file the power of attorney/Vakalatnama instead of levying the compounding charge on all the Directors. To await instructions, list on 18th May, 2022.
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