No Limitation Period Prescribed for Compounding of Offences Under Income Tax Act | HC
- Blog|News|Income Tax|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 7 February, 2024
Latest from Taxmann
Case Details: Photon Kathaas Production (P.) Ltd. v. DGIT (Investigation) - [2024] 159 taxmann.com 119 (Madras)
Judiciary and Counsel Details
-
- Senthilkumar Ramamoorthy, J.
- Revathi Manivannan for the Petitioner.
- A.N.R. Jayaprathap, Jr. SC for the Respondent.
Facts of the Case
Assessee faced a delay in filing its income tax return due to a disagreement between auditors in India and Singapore. The return was filed on 14.05.2018, followed by prosecution initiated on 03.01.2019, with summons issued on 09.11.2021.
After receiving the summons on 19.05.2022, the assessee filed a compounding application, which was rejected for being beyond the time limit specified in the guidelines issued by the Central Board of Direct Taxes (CBDT) on 14.06.2019.
Assessee filed the writ petition before the Madras High Court.
High Court Held
The Madras High Court held that the provision outlined in subsection (2) of Section 279, pertaining to the compounding of offences, grants the Commissioner the authority to compound such offences either before or after the commencement of proceedings.
Neither subsection (2) nor any of the other sub-sections of Section 279 prescribe a period of limitation with regard to the compounding of offences.
By taking note of this aspect, the guidelines issued by the CBDT were quashed by the Madras High Court in the case of Jayshree vs. the Central Board of Direct Taxes W.P.No.2968 & 2970 of 2023, dated 03-11-2023.
Even otherwise, the complaint was lodged on 03.01.2019, about fifteen months lapsed between the date of the complaint and the onset of the COVID-19 pandemic. If the period excluded under orders of the Supreme Court, i.e. the period running from 15.03.2020 to 28.02.2022, is excluded, the compounding application filed on 19.05.2022 would be within the period prescribed in the guidelines.
Thus, CBDT was directed to dispose of the compounding application within a maximum period of one month from receipt of a copy of the order after providing a reasonable opportunity.
List of Cases Reviewed
-
- W.P.Nos.2968 and 2970 of 2023 dated 03.11.2023 (para 6) – followed.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
