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2018 (8) TMI 714 - HC - Income TaxCompounding of offense u/s 276B - failure to deposit the compounding amount - Failure to deposit the amount of TDS, after collection to the government account - initiation of prosecution proceedings under the provisions of Chapter XVIIB of the Income Tax Act, 1961 - The main grievance of the petitioners is that when there is a genuine dispute about the quantum of compounding fee payable by them, it was not open to the respondents to reject the application for compounding, without first resolving the dispute. Held that:- The amount of compounding fee is statutorily fixed. The question of raising any dispute on the same does not arise. Actually, the dispute with regard to the quantum raised by the petitioners was on the basis of a CBDT Circular - But these guidelines are applicable only to compounding applications filed after 01-01-2015. The application of the petitioners in this case was filed on 26-8-2014. Therefore, the compounding fee was liable to be calculated at the rate of 5%, as per the guidelines existing as on the date of filing of the compounding application. It appears that the compounding fee was stipulated at 5% at the time when the petitioners filed their application for compounding. It was reduced to 3%, after 01-01-2015. Today, the petitioners want to apply the CBDT guidelines to their case, taking the date of acceptance of the application for compounding as the basis. - But the above claim of the petitioners is an argument of convenience. Every proposition of law could prove to be a double edged weapon, but it can never be invoked or condemned depending upon convenience or consequences. Therefore, the 1st respondent was right in applying the guidelines that were in existence as on the date of the filing of the compounding application and the petitioners cannot question the correctness of the same. It is not too late for the petitioners to mend their ways. - the petitioners could be permitted to pay the compounding fee and get the offence compounded. - Decided partly in favor of assessee.
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