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2023 (12) TMI 1189 - HC - Income TaxCompounding of case u/s 279 (2) - alleged offences under Sections 276C and 277 of the Act - Ld' Judge after finding that the Contempt Petition had no merits, proceeded to direct the authority to re-examine the application filed by the respondent herein, in the light of the fresh circular dated 14.06.2019, which provides for a more liberal policy - HELD THAT:- The order of the learned Single Judge insofar as it remits the matter back to the 4th appellant to compound the case by fixing the compound fee, does not warrant interference. We say so, inasmuch as we find that the learned Judge [2019 (9) TMI 59 - MADRAS HIGH COURT] even while remanding the matter, had made it clear that the judgment in Prem Dass case [1999 (2) TMI 6 - SUPREME COURT] would apply to the respondent, and further, the respondent herein is entitled to the benefit of Section 279 (1A) of the Act. The revenue having failed to challenge the above order is bound by it. Ld' Judge had found that the Respondent herein was entitled to compound in terms of Section 279(1A) of the Act, which provides that the assessee would be entitled to compound if the penalty stood reduced or waived under Section 273A of the Act. Importantly, the Supreme Court in Prem Dass case [1999 (2) TMI 6 - SUPREME COURT] while construing Section 279(2) of the, Act had rejected the argument that the reduction of penalty by an appellate authority not being an order under Section 273A of the Act, the assessee/applicant would not be entitled to the benefit of Section 279(1A) of the Act and it was held that it may not be appropriate to adopt a literal construction of provisions of Section 279(1A) of the Act. Respondent would be entitled to the benefit of Section 279(1A) of the Act and the judgment of Supreme Court in Prem Dass case in view of reduction of penalty from 300% to 100% by the appellate authority, the failure of the appellant to challenge, in our view, would prove fatal, to any attempt by the revenue to contend to the contrary.
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