TMI Blog1992 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... 119 of the Income-tax Act, 1961 ("the Act"), can issue instructions to control the discretion of the Commissioner of Income-tax under section 279(2) of the Act to compound the offences is the short question for our consideration. M. P. Tiwari and M. L. Passi are the respondents before us in these appeals. M. P. Tiwari is the secretary and principal officer of Messrs. Hans Raj Gupta and Co. P. Ltd. He, along with other directors of the said company was prosecuted under section 276B of the Act on the charge that he committed defaults in depositing the income-tax deducted from the salaries of the employees of the company during the assessment years 1979-80 to 1982-83. M. L. Passi was the managing director of Messrs. Inspi Auto Industry P. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power under section 279(2) of the Act. The relevant part of the instructions is as under "B. Cases which should not be compounded: 1. No compounding will be done if the assessee belongs to monopoly or large industrial house or is a director of a company belonging to or controlled by such house. 2. Cases in which the prospects of a successful prosecution are good should not ordinarily be compounded. 3. Compounding will not be done in cases of second and subsequent offences. C. Cases which may be compounded: 1. Except in cases falling within categories (1) and (3) of B above, compounding of an offence can be done with the consent of the Board if the amount involved in the offence/default is less than rupees one lakh. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board and/or that of the Minister, in view of the instructions that, 'the previous approval of the Board should always be obtained before deciding to compound an offence ...... No assurance of any kind should be given to the assessee before obtaining Board's approval.' This was not the intention of the Legislature when section 279 of the Act was incorporated." These appeals by way of special leave are by the Revenue against the judgments of the High Court. This court in Navnitlal C Javeri v. K K Sen, AAC [1965] 56 ITR 198 ; [1965] 1 SCR 909, Ellerman Lines Ltd. v. CIT [1971] 82 ITR 913 [1972] 4 SCC 474 and in K P. Varghese v. ITO [1981] 131 ITR 597 ; [1981] 4 SCC 173, has held that circulars issued by the Central Board of Direct T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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