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| The Tax Publishers2020 TaxPub(DT) 1154 (Mad-HC) : (2022) 445 ITR 0234 INCOME TAX ACT, 1961
Section 279(1A) Section 276 Section 277
As per Section 279(1A) a person would not be proceeded against for an offence under Section 276C and Section 277 in relation to assessment for an assessment year in respect of which penalty imposed or imposable on him under clause (iii) of sub- section (1) of section 271 has been reduced or waived by an order under section 273A. In instant case, the penalty was reduced by CIT(A). This factor had to be kept in mind by respondents. The respondents should also have considered the age of assessee and his status in society while deciding the case. The fact that assessee has been subjected to prosecution from 2011 was itself an adequate punishment. This factor also should have been kept in mind by respondents while disposing of case. If assessee had no other cases against him, respondents would consider compounding application in favour of assessee subject to payment of appropriate compounding fees by assessee therefore, impugned order was liable to be quashed and application filed by assessee would be re-examined by respondents in the light of liberalised policy of Central Board of Direct Taxes in its clarification dated 14-6-2019, Section 279(1A).
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Prosecution - Compounding of offences - Respondents did not consider reduction of penalty - Under clause (iii) of sub-section 91) of section 271 by CIT(A) and assessee's status while rejecting compounding application
Assessee had been prosecuted under sections 276C and 277 before Addl. Chied Metropolitan Magistrate pursuant to proceedings initiated under section 148 wherein it was held that assessee had wilfully and deliberately filed returns without reflecting investment in form of bank deposits in foreign bank acount and thereby, attempted to evade tax. AO on said count imposed penalty under section 271(1)(c) @ 300% of tax sought to be evade. CIT(A) restricted penalty to 100% instead of 300%. Assessee filed application for compounding of offence under section 279. Compounding Committee consisting of three respondents rejected application filed for compounding of offences CBDT Circular dated 16-5-2008 under section 279(2). Held: As per Section 279(1A) a person would not be proceeded against for an offence under Section 276C and Section 277 in relation to the assessment for an assessment year in respect of which penalty imposed or imposable on him under clause (iii) of sub- section (1) of section 271 has been reduced or waived by an order under section 273A. In instant case, penalty was reduced by CIT(A). This factor had to be kept in mind by respondents. This respondents should also have considered the age of assessee and his status in society while deciding the case. The fact that assessee has been subjected to prosecution from 2011 was itself an adequate punishment. This factor also should have been kept in mind by respondents while disposing of case. If assessee had no other cases against him, respondents would consider compounding application in favour of assessee subject to payment of appropriate compounding fees by assessee therefore, impugned order was liable to be quashed and application filed by assessee would be re-examined by respondents in the light of liberalised policy of Central Board of Direct Taxes in its clarification dated 14-6-2019, Section 279(1A).
REFERRED :
FAVOUR : Matter remanded.
A.Y. :
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