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TMI Blog2018 (8) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the petitioners and Ms. K.Mamata, learned Senior Standing Counsel for the Department. 3. The petitioners were issued with a show cause notice dated 05-8-2013 calling upon them to show cause as to why prosecution proceedings should not be initiated against them for their failure to remit the taxes deducted by them to the Government account within the stipulated time as required under the provisions of Chapter XVIIB of the Income Tax Act, 1961. In response, the petitioners filed an application for compounding, on 26-8-2014. 4. Vide letter dated 08-3-2016, the petitioners' application for compounding was accepted, subject to payment of compounding fee of Rs. 20,21,793/-. The fee was to be paid within 60 days of the receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d summons in C.C.No.151 of 2017. 10. Thereafter, the petitioners filed an application before the Principal Chief Commissioner on 21-02-2018, requesting for an opportunity to explain as to how they contest the calculation of the compounding fee. But the said request was turned down on 07-3-2018. Again, the petitioners made a fresh request on 21-3-2018. But the same was also turned down by order dated 26-3-2018. 11. Thereafter, the petitioners have come up with the above writ petition challenging the rejection of the compounding application. 12. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing F.No.285/35/2013 (Inv.V)/108, dated 23-12-2014. 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. 16. 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. 17. But the above claim of the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now take up for consideration the request made by the learned counsel for the petitioners. The learned counsel for the petitioners submitted that at least now the petitioners may be given an opportunity, to make payment of the compounding fee, if the Court was not in agreement with him on the first point. The learned counsel for the petitioners contended that by prosecuting the Directors of the petitioners, the Department can only send them to prison and that by accepting the compounding fee, the petitioners can be saved without any detriment to the Department. 20. The said argument, in our considered view, merits acceptance. Section 279(2) of the Act enables the Principal Chief Commissioner to compound any offence under Chapter XXII, eit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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