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M/s. V.A. Haseeb and Co. (Firm) Shri. Mohammed Anwarullah Versus The Chief Commissioner of Income Tax TDS

2016 (9) TMI 756 - MADRAS HIGH COURT

Compounding of offenses - Held that:- In the instant case, the matter has been pending since 1999, and there has been no progress. The respondent/Department stated that the petitioner/Firm was an accused. Furthermore, the Principal Sessions Court, while granting permission to the respondent to consider the petitioner's Application for compounding the offence, in its order, dated 28.04.2015, observed that the offences are compoundable in nature, therefore, leave is granted to the competent Author .....

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:- 2-9-2016 - T. S. Sivagnanam, J. For the Petitioner : Mr. R. Narendran For the Respondent : Mr. T. Pramod Kumar Chopda ORDER Heard Mr.R.Narendran, learned counsel appearing for the petitioner, and Mr.T.Pramod Kumar Chopda, learned Senior Standing Counsel for the respondent/Income Tax Department. 2. This Writ Petition has been filed to quash the order passed by the respondent/Chief Commissioner of Income Tax-TDS, dated 10.08.2015. 3. The abovesaid order was passed under Section 279 (2) of the I .....

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ef Commissioner has perused the guidelines given by CBDT, dated 16.05.2008, and stated that, considering the nature, magnitude and conduct of the assessee, and that Non Bailable Warrant was issued to the assessee, and the assessee has been convicted by the Criminal Court, and when there is conviction by the competent Criminal Court, the question of compounding the offence does not arise. Accordingly, the Chief Commissioner rejected the Application. 5. To decide the correctness of the impugned or .....

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and its partners, viz., ii) Mohammed Athaullah/accused No.2, and iii) V.Mohammed Anwarullah/accused No.3 before the Additional Chief Metropolitan Magistrate, Economic Offences-I, Chennai, in E.O.C.C.No.268 to 291/1997, by the Income Tax Officer, Headquarters, Chennai. During the course of trial, accused No.2, Mohammed Athaullah died, and charges against him stood abated. ii) The Trial Court, by a judgement, dated 06.02.1999, convicted Firm/accused No.1 and V.Mohamed Anwarullah/accused No.3, impo .....

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he Criminal Appeals are pending. iii) Whileso, in 2014, the petitioner filed an Application before the Chief Commissioner of Income Tax TDS for compounding the offence. This Application was filed, without obtaining leave of the Court. At that juncture, the prosecution/Income Tax Department thought fit to file a memo before the Principal Sessions Judge, Chennai, dated 28.04.2015, wherein, they prayed to grant leave to the petitioner under Section 320 (5) of the Code of Criminal Procedure for comp .....

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rejected by the Chief Commissioner, by the order impugned herein, on the ground that the conduct of the assessee/petitioner as well as the conviction would dis-entitle the petitioner for compounding the offences. 6. As admitted by the respondent, in the counter affidavit, cases have been pending since 1999. One of the partners of the Firm, viz. Mohammed Athaullah passed away during the pendency of the proceedings and the charges against him stood abated. In such circumstances, it is to be seen .....

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ion was pending before the Principal Chief Commissioner, and in the meantime, the assessee approached the Hon'ble Finance Minister, Government of India, who rejected the application for compounding her case. This Court was called upon to decide the question as to how the power of compounding of offence should be exercised by a Chief Commissioner, and this Court took note of the decision of the Hon'ble Division Bench of this Court, in the case of (Chairman, Central Board of Direct Taxes a .....

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manathan reported in (2009) 313 ITR 59 (Mad). In the said case also there was a conviction of the assessee by the Criminal Court and revision petition challenging the conviction was pending. The counsel for the assessee therein pointed out that section 279 (2) of the Act is provided to facilitate Compounding of offence, either before or after institution of the proceedings and in another case where the trial court has convicted a similarly placed assessee whose appeal was also dismissed and pend .....

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ision in the case of Babu Lal vs. Hazari Lal Kishori Lal reported in AIR 1982 SC 818 and P.L. Kantha Rao vs. State of Andhra Pradesh reported in AIR 1995 SC 807, dismissed the appeal filed by the Revenue. At this stage it would be beneficial to quote the relevant paragraphs of the judgement of the Hon'ble Division Bench, which reads as follows:- This Court carefully considered the submission of counsel for both sides. The plea of the respondent is that Section 279 (2) of the Act permits the .....

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. 588 of 1996, while so, refusing the same relief to the respondent, where the trial court alone convicted her and the appeal is pending, is discriminatory. Now we look into Section 279 (2) of the Act, which reads as under:- "279.Prosecution to be at instance of Chief Commissioner or Commissioner. (1) .... (2) Any offence under this Chapter may either before or after the institution of proceedings, be compounded by the Chief Commissioner or a Director General...." It is evident from Se .....

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one the ambit of whose meaning would be governed by statute. In this context, it is useful to refer to the below mentioned decisions of the Honourable Supreme Court. i) Babu Lal vs. M/s. Hazari Lal Kishori Lal and others, AIR 1982 SC 818, 824, it was held thus:- 17.The word 'proceeding' is not defined in the Act. Shorter Oxford Dictionary defines it as carrying 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 .....

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adesh and others, AIR (1995) SC 807 wherein in Paragraph 3, it was held thus (page 809):- .....Therefore, the term 'proceeding' in S.29 is a very wide term to mean a prescribed course of action to enforce the legal right. It indicates the prescribed mode in which the judicial business is conducted. The execution is a step in the judicial process. It seeks to enforce the final order to realise the result of the adjudication. The term proceeding shall also include the proceedings at the ap .....

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no power to reassess and reappreciate the evidence unless the statute expressly confers on it that power. That limitation is implicit in the concept of revision. In this view of the matter we are supported by a decision of this Court in State of Kerala vs. K.M. Charia Abdullah and Co. In the case on hand, against the conviction and sentence passed by the trial court, on the complaint preferred by the appellants, the respondent has filed an appeal and the same is pending, which is a prescribed c .....

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ed by trial court, his appeal was also dismissed, he filed revision and in the said revision, the appellants have filed Crl.M.P. No. 984 of 2000 in Crl.R.C. No. 588 of 1996 and obtained leave from the Court to consider it. While so, the appellants have refused to exercise such power in the case on hand by misinterpreting Section 279 (2) of the Act, which is unfair. The learned single Judge considered the above said facts and rightly set aside the order passed by the third appellant, hence, the w .....

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ks from the date of receipt of a copy of this judgment ii) On such payment, the appellants are directed to receive it, compound the offence and inform the same to the Principal Sessions Judge, Chennai where the appeal in C.A. No. 250 of 1998 preferred by the respondent is pending, within a period of six weeks thereafter. 6. Thus, in the light of the above decision, the power of compounding is exercisable when proceedings are pending. In the case on hand, the sentence imposed on the petitioner ha .....

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y not be compounded. Thus, the guidelines does not specifically place an embargo on the competent authority to consider the application for compounding merely on the ground when the assessee has been convicted by a court of law. 7. The expression used in the guidelines "should normally not be compounded", as pointed out 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 t .....

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ndia Commercial Co. Ltd., and another Vs. Collector of Customs, Calcutta) reported in A.I.R. (1962) S.C. 1893, held that the law declared by the highest court in the State is binding on authorities, or tribunals under its superintendence, and that they cannot ignore it, either in initiating a proceeding or deciding on the rights involved in such a proceeding. Taking note of the scope of the guidelines, this Court was of the view that the competent Authority was entitled to examine the merits of .....

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