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R. Inbavalli Versus The Government of India, Ministry of Finance, Department of Revenue, (Central Board of Direct Taxes) , The Income Tax Officer

2016 (9) TMI 209 - MADRAS HIGH COURT

Power of compounding of offences - Held that:- The power of compounding is exercisable when proceedings are pending. In the case on hand, the sentence imposed on the petitioner has been suspended by the Appellate Court and the appeal is still pending. Therefore, it has to be seen as to whether that conviction by the Criminal Court should be the only reason for rejecting the petitioner's application for compounding the offence. Clause 4.4 of the guidelines states that cases not to be compounded. .....

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earlier Clause 4.4 commences with a non obstante Clause. Therefore, the competent authority is entitled to examine the merits of each matter and to take a decision as to whether the facts make out a case for compounding even in cases where there is a conviction by a Court of law. Thus the guidelines did not place any fetters on the power of the competent authority to examine cases for compounding. However, this cannot be an universal yardstick and these observations are made by this court consid .....

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take a decision on merits uninfluenced by any observations or findings rendered by the authorities on an application moved by the petitioner before the Hon'ble Finance Minister. The above direction shall be complied with within a reasonable time and the petitioner may be permitted to appear for personal hearing through her authorised representative as it appears that she is not very illiterate. - W. P. No. 24588 of 2016 - Dated:- 18-8-2016 - T. S. Sivagnanam, J. For the Petitioner : Mr. G. Jayac .....

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criminal prosecution ended in a conviction by imposing rigorous imprisonment for a period of 6 months and a fine of ₹ 10,000/- for each of the assessment years. This sentence imposed on the petitioner has been suspended in Criminal Appeal No.227 of 2010 by the learned Principal Sessions Judge and the appeal is pending before the Sessions Court. The petitioner setting out the peculiar facts and circumstance of the case and that the petitioner having already paid the entire tax in terms of t .....

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on 07.04.2015. However, no orders have been passed by the Principal Chief Commissioner. 3. While the matter pending consideration before the Principal Chief Commissioner, it appears that based on certain advice given to the old lady, she sent a representation to the Honourable Finance Minister, Government of India requesting for exercising his powers and compounding the petitioner's case. This has been rejected and intimated to the petitioner by the first respondent by the impugned proceedin .....

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earned Senior Standing Counsel appearing for the respondents pointed out that Clause 4 of the guidelines dated 16.05.2008 stipulates the eligibility conditions for consideration of a case for compounding and in terms of Clause 4.4 (f), if the order of conviction has been passed by the court, then the case cannot be compounded. 5. The issue as to how the the power of compounding of offences should be exercised had come up for consideration before the Hon'ble Division Bench of this court in an .....

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ase where the trial court has convicted a similarly placed assessee whose appeal was also dismissed and pending revision, the said assessee had filed a petition for compounding the offence invoking section 279 (2) of the Act and in that case, the Revenue accepted the plea of the said assessee and went to the extent of filing a petition before the court to permit them to entertain the application under Section 279 (2) and ultimately compounded the offence. Thus a plea of discrimination was raised .....

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ssion of counsel for both sides. The plea of the respondent is that Section 279 (2) of the Act permits the appellants to compound the offence either before or after institution of the proceedings, which power is not exercised without any valid reasons; that when similarly placed person was convicted and whose conviction was confirmed by the appellate court and pending revision before this Court in Crl.R.C. No. 588 of 1996, the assessee has filed similar petition for compounding the offence, whic .....

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proceedings, be compounded by the Chief Commissioner or a Director General...." It is evident from Section 279 (2) of the Act that any offence under this Chapter may either before or after the institution of proceedings, be compounded by the Chief Commissioner or a Director General. The term 'proceedings' is not defined in the Income Tax Act, 1961. The term 'proceedings' is a term of wide amplitude and comprehensive and generally speaking means a prescribed course of action .....

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ing of an action at law, a legal action or process; any act done by authority of a Court of law; any step taken in a cause by either party. The term 'proceeding' is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right. It is not a technical expression with a definite meaning attached to it , but one the ambit of whose meaning would be governed by statute. It indicates a prescribed mode in which judicial business is conducted. Th .....

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the final order to realise the result of the adjudication. The term proceeding shall also include the proceedings at the appellate stage. In (Lachhman Dass Vs. Santokh Singh) (1995) 4 SCC 201 in para-7, it was held by the Honourable Supreme Curt thus:- .....Precisely stated, an appeal is a continuation of a suit or proceedings wherein the entire proceedings are again left open for consideration by the appellate authorities which has the power to review the entire evidence subject, of course, to .....

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e complaint preferred by the appellants, the respondent has filed an appeal and the same is pending, which is a prescribed course of action for enforcing a legal right. The said appeal is also a proceeding as contemplated under Section 279 (2) of the Act. For the discussions above, this Court is of the considered view that pending appeal, the appellants can very well compound the offence sought for by the respondent, which they failed. It is not out of context to mention that in earlier occasion .....

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ned single Judge considered the above said facts and rightly set aside the order passed by the third appellant, hence, the writ appeal is dismissed. No Costs. Consequently, connected W.A.M.P. No. 540 of 2003 is closed. In view of the fact that the respondent is aged about 83 years, who has filed the petition for compounding as early as on 09.04.2001, which was rejected by the third appellant on 02.08.2002, to meet the ends of justice, it is warranted to direct the parties as follows:- i) The res .....

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r of compounding is exercisable when proceedings are pending. In the case on hand, the sentence imposed on the petitioner has been suspended by the Appellate Court and the appeal is still pending. Therefore, it has to be seen as to whether that conviction by the Criminal Court should be the only reason for rejecting the petitioner's application for compounding the offence. Clause 4.4 of the guidelines states that cases not to be compounded. It commences with a non obstante clause stating tha .....

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