TMI Blog2023 (11) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the compounding of offences and not for the purpose of fixing time limit for filing the application for compounding of offences and the same is contrary to the provisions of the Act and hence, it is not permissible in terms of Section 279(2) of the IT Act. Therefore, this Court is of the view that the CBDT is not empowered to fix the time limit for filing the application for compounding of offences, which is contrary to the provisions of Section 279(2) of the IT Act. Thus in terms of Section 279(2) of the IT Act, the petitioner can file the application for compounding of offences either before or subsequent to the launching of the prosecution. As far as the citation provided by the learned counsel for the petitioner is concerned, in all those citations, the respective High Courts had struck down the provisions of Clause 7(ii) of the said circular dated 14.06.2019 with respect to the prescribed time limit of 12 months and held that at any point of time the application for compounding of offences can be filed i.e., even after the filing of the prosecution and before the disposal of the case. Thus this Court is of the considered view that the order passed by the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for compounding of offences and the same is contrary to the provisions of Section 279(2) of the IT Act. Therefore, since the said circular was issued beyond the scope of the Act, the same is liable to be quashed. However, without considering all these aspects, the respondents had passed the impugned order dated 20.08.2022 by non-application of mind. Hence, the present writ petitions have been filed by the petitioner. 6. In support of his contentions, he had referred to the following judgments of other High Courts, wherein the provisions of the circular, with regard to the fixation of the time limit of a period 12 months from the date of prosecution, was struck down and the order of rejection of application for compounding of offences was set aside: (i) Footcandles Film Pvt. Ltd., and another vs. Income Tax Officer-TDS-1 and others , in W.P.No.429 of 2022; (ii) Vikram Singh vs. Union of India , reported in [2017] 80 taxmann.com 371 (Delhi) ; 7. Per Contra, Dr.B.Ramaswamy, the learned Senior Standing counsel appearing for the respondent had vehemently opposed the submissions of the learned counsel for the petitioner by stating that in terms of Section 119 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale consideration in another property, she believed that she is not liable to pay any tax in terms of the IT Act. However, she had filed her income tax returns belatedly on 13.06.2016. 13. Subsequent to the filing of returns, the respondent had prosecuted the petitioner for delay in filing of the returns on 14.09.2016. Thereafter, the petitioner had filed an application for compounding of offences on 14.09.2021 in terms of the provisions of Section 279 of the IT Act. The said application came to be rejected for a simple reason that it is barred by limitation as prescribed by the said circular. The relevant portion of the said circular is extracted hereunder: 7 .Eligibility Conditions for Compounding i..................... ii. The compounding application may be filed suomoto at any time after the offence(s) is committed irrespective of whether it comes to the notice of the Department or not. However, no application of compounding can be filed after the end of 12 months from the end of the month in which prosecution complaint, if any, has been filed in the court of law in respect of the offence for which compounding is sought. 14. On perusal of the above cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot issue a circular contrary to the object of the said provisions. The explanation, which empowers the CBDT to issue circular, is only for the purpose of implementation of the provisions of the Act with regard to the compounding of offences and not for the purpose of fixing time limit for filing the application for compounding of offences and the same is contrary to the provisions of the Act and hence, it is not permissible in terms of Section 279(2) of the IT Act. 19. Therefore, this Court is of the view that the CBDT is not empowered to fix the time limit for filing the application for compounding of offences, which is contrary to the provisions of Section 279(2) of the IT Act. Thus in terms of Section 279(2) of the IT Act, the petitioner can file the application for compounding of offences either before or subsequent to the launching of the prosecution. 20. As far as the citation provided by the learned counsel for the petitioner is concerned, in all those citations, the respective High Courts had struck down the provisions of Clause 7(ii) of the said circular dated 14.06.2019 with respect to the prescribed time limit of 12 months and held that at any point of time th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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