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TMI Blog2020 (11) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration of Rs.40 lakhs situated in Door No AH151, 3rd Street, Anna Nagar, Chennai-40, from one M/s. Soffia Software Ltd. (now renames as Quintegra Solutions P. Ltd.) represented by its Managing Director, Shri R. Venkata Subramani who was in turn represented by a power agent, viz. Shri S.C. Agarwal. As the full value of consideration exceeded Rs.25 lakhs, in terms of provisions contained in Chapter XXC of the Income Tax Act, 1961, (now repealed), both the vendor and the vendee were under the statutory obligation to furnish Form No.37-I seeking 'no objection' from the Appropriate Authority. Based on the information available in the office of the DIT (Exemptions), Chennai, it was detected that single property was sold by two split-up sale deeds dated 25.1.2001 and 27.3.2001 of Rs.20 lakhs each by contravening the provisions of Chapter XXC of the Act. Therefore, the Member, Appropriate Authority, Chennai, filed a criminal complaint against all the aforesaid four persons for the offences under sec. of sec.269UC/269UL (2) of the I.T.Act, before the Addl. CMM, EO-I, Chennai, hereinafter referred to as the trial court in EOCC No.594 of 2002. M/s. Soffia Software Ltd., Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board of Direct Taxes (hereinafter referred to as the 'CBDT' for short). Yet another reason assigned by the Respondent for such rejection was that the Petitioner was totally non-cooperative in getting the property valued, which falls within the purview of guidelines 3 and 4.4(g) of the aforesaid circular issued by the CBDT, which reads as follows:- "3. Offences under Direct Tax Laws may be compounded subject to the conditions prescribed in these guidelines. An assessee cannot claim, as a matter of right, that his offence has to be compounded. Factors, such as conduct of the assessee, nature and magnitude of the offence and facts and circumstances of each offence need to be considered while dealing with such a request. Offences under Indian Penal Code cannot be compounded. They can, however, be withdrawn. 4.4. Cases not to be compounded:- Notwithstanding anything contained in the guidelines, the following cases should normally not be compounded:- .... (g) Any other ground, which the CCIT/DGIT may consider relevant for not accepting the compounding petition, in view of the nature and magnitude of the offence." The correctness of the aforesaid order is challenged in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Having regard to the aforesaid rival submissions made, the points that arise for consideration are whether the Respondents is justified in rejecting the compounding application for the reasons: (i) that it had been made after the order of conviction has been passed by the Criminal Court; and (ii) that the conduct of the Petitioner by non-cooperation at the initial stage disentitles him to any relief. 7. Insofar as point no. (i) is concerned, reference must, at once, be made to the ruling of the Division Bench of this Court in Chairman, Central Board of Direct Taxes -vs- Umayal Ramananthan (Order dated 06.04.2009 in W.A. No. 439 of 2003), where it has been held as follows:- "5. This court carefully considered the submission of counsel for both the 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 the 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 sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness is con-ducted. The execution is a step in the judicial process. It seeks to enforce the final order to realise the result of the adjudication." 9. The term proceeding shall also include the proceedings at the appellate stage. In Lachhman Dass -vs- Santokh Singh [(1995) 4 SCC 201] in paragraph 7, it was held by the honourable Supreme Court thus (page 205): "7....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 the prescribed statutory limitations. But in the case of revision whatever powers the revisional authority may have, it has 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., (AIR 1965 SC 1585)." 10. In the case on hand, against the conviction and sentence passed by the trial court, on the complaint preferred by the appellants, the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtaway grant relief, and would instead remit the matter to the concerned authority to re-consider the matter and decide afresh in accordance with law. That would not by any stretch of imagination dilute the binding nature of the principles laid down in that pronouncement which would govern subsequent cases where the same fact situation arises. In other words, guideline 4.4(f) of the Circular in F. No. 285/90/2008-IT(Inv.)/12 dated 16.05.2008 issued by the CBDT directing that compounding should not be permitted when conviction order has been passed by the Criminal Court, has to be construed that it would not stand in the way for considering a compounding application when appeal against conviction by the Criminal Court is pending, as in this case. Though the Respondent has made a distinction for granting the benefit of compounding to others while denying the same to the Petitioner for the reason that their compounding applications have been made before conviction by the Criminal Court, such distinction cannot be of any avail in view of the binding decisions of the Division Benches of this Court, as referred earlier. 8. Coming to point no. (ii) that the non-cooperation of the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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