Madhya Pradesh High Court
Ramesh Jain vs Union Of India on 8 July, 2022
Author: Rajendra Kumar (Verma)
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE RAJENDRA KUMAR (VERMA)
ON THE 8th OF JULY, 2022
CRIMINAL REVISION No. 3177 of 2021
Between:-
1. RAMESH JAIN S/O SHRI RATANLAL JAIN ,
AGED ABOUT 56 YEARS, OCCUPATION:
BUSINESS 16-B, BAKHTAWARRAM NAGAR
(MADHYA PRADESH)
2. JINESH JAIN S/O SHRI RATANLAL JAIN , AGED
ABOUT 50 YEARS, OCCUPATION: BUSINESS 16-B,
BAKHTAWARRAM NAGAR (MADHYA
PRADESH)
.....PETITIONER
(SHRI RAVINDRA SINGH CHHABRA, LEARNED SENIOR
COUNSEL WITH SHRI AMAN ARORA, LEARNED COUNSEL FOR
THE PETITIONER )
AND
1. UNION OF INDIA THR. INCOME TAX
DEPARTMENT INCOME TAX BHAVAN, NEAR
WHITE CHURCH (MADHYA PRADESH)
2. SARDARMAL S/O SUKHLAL JAIN , AGED ABOUT
65 YEARS, OCCUPATION: BUSINESS 221,
TELEPHONE NAGAR, INDORE (MADHYA
PRADESH)
3. YOGESH JAIN S/O SARDARMAL JAIN , AGED
ABOUT 41 YEARS, OCCUPATION: BUSINESS 221,
TELEPHONE NAGAR, INDORE (MADHYA
PRADESH)
4. CHANDRAPRABHU HOMES PVT. LTD.
THROUGH ITS DIRECTOR 16, WAREHOUSE
ROAD, SIYAGANJ (MADHYA PRADESH)
Signature Not VerifiedDigitally signed by
SAN
.....RESPONDENTS
AMIT KUMAR
Date: 2022.07.12
19:04:45 IST (MS. VEENA MANDLIK, LEARNED COUNSEL FOR THE
RESPONDENTS)
2
This revision coming on HEARING this day, with consent heard finally
and the Court passed the following:
ORDER
The petitioners have filed the present revision petition under Section 397
R/w Section 401 of Cr.P.C being aggrieved by the order dated 01.11.2021
passed in CRA No.299/2019 by XVIIth Additional Sessions Judge, Indore
whereby the learned Judge has dismissed the application under Section 320(5)
of Cr.P.C. preferred by the petitioners seeking permission of the Court for
compounding the offence under Section 276 C(1)(i) of Income Tax Act, 1961.
Facts of the case in short are that petitioners are the directions of the
company namely M/s Chandraprabhu Homes Pvt. Ltd. indulged in the business
of purchase, sale and development of plots in Indore and respondent nos.2 to 4
are also other Directions of the said company. Due to the dispute between the
petitioners and respondent nos.2 and 3, they filed complaint before the Income
Tax Department against each other. Thereafter, the petitioners were removed
from the Directorship of the company w.e.f. 12.04.2006 vide letter dated
28.04.2006, thereafter, they approached before the Company Law Board, New
Delhi by filing an application under Section 397 & 398 of the Companies Act
and vide order dated 12.09.2011, the Company Law Board declared the
removal of the petitioners null and void and directed to maintain the status quo.
On 12.12.2006, the company (through respondent no.2 and in the absence of
petitioners, filed their IT Returns and shown its income as NIL to evade tax
liability. After the assessment order dated 31.12.2008, the respondent raised a
tax demand of Rs.2,07,338/- and upon non-payment, a fine of Rs.3,50,000/-
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was also imposed. Thereafter, non-realization of tax liability, a show cause
SAN AMIT KUMAR
Date: 2022.07.12
19:04:45 IST
notice was issued on 08.03.2011 and 19.03.2011 and the Company has
submitted the reply to that effect on 23.05.2011 and thereafter, Respondent No.
has filed a complaint before the JMFC, Indore bearing Case No.RCT
No.03/2012 against the petitioners under Section 276 C (1)(i) of Income Tax
Act, 1961 and the learned Special Judicial Magistrate, (CBI and Economic
Offienece, Indore vide order dated 04.10.2019, has convicted the petitioners
and respondent nos.2 and 3 and sentenced to undergo Six months S.I. with fine
of Rs.5000/- each with default stipulations.
Aggrieved petitioners, filed an appeal before the appellant Court i.e.
XVII, Additional Session Judge, Indore bearing Criminal Appeal No.299/2019
and during the pandency of the appeal, the petitioners have filed appropriate
application under Section 320(5) of Cr.P.C. for compounding the offence
before the competent authority. Thereafter, the respondent no.1 was directed to
file/produce orders and relevant documents regarding said application. But, vide
the impugned order, in absence of the written reply to the petitioner's
application, solely on the submissions and instructions of Advocate of
respondent no.1, the application of the petitioner was rejected vide the
impugned order. Hence, the present petition before this Court.
Learned Senior counsel for the petitioners submits that the impugned
order passed by the learned Appellate Court is illegal, improper and incorrect
and contrary to the record and guidelines issued by the Ministry of Finance,
Govt. of India. The learned appellate Court has wrongly dismissed the
application by observing that the competent authority has already dismissed
similar application but no such order has been submitted by the respondent
before the court below. It is further submitted that the appellate court has
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SAN AMIT KUMAR
Date: 2022.07.12
19:04:45 IST
decided the interim application in the manner to decide the case finally on merits
which prejudiced the rights of the petitioners. It is also submitted during the
pandency of the appeal, petitioners received the knowledge of Circular
No.25/2019 dated 14.06.2019, Ministry of Finance (Govt. of India) issued
guidelines for compounding of offences under Direct Tax Laws, 2019 under
Section 279(2) of the Income Tax Act which provided that any offence under
Chapter XXII (including the offences under Section 276-C(1)(i) may be
compounded by the competent authority. It is also submitted that vide another
Circular dated 09.09.2019, the Ministry of Finance relaxed the time limit for
filing the application for compounding and the same could be filed before
31.12.2019, thus, the petitioners were became eligible for compounding of the
offence in accordance with the guidelines issued by the Ministry of Finance,
Govt. of India, hence, prays for setting aside the impugned order.
It is further submitted by learned Senior counsel for the petitioners that
the appellate court misconstrued that the application of the petitioners had
already been dismissed by the competent authority and there is only
recommendations of Chief Income Tax Commissioner (OSD-I), Indore dated
14.09.2021 for rejection of compounding petition. Actually,the compounding
petition was rejected on 10.12.2021 i.e. after one month and 10 days of passing
of the impugned order.
Learned Senior counsel for the petitioner place reliance over the
judgement of Honble Apex Court in the case of Rajesh Kumar Sharma vs.
Union of India (2007) 9 SCC 158 whereby the Apex Court has held that
the purpose of compounding of offence against payment of
compounding amount is to prevent litigation and encourage early
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SAN AMIT KUMAR
settlement of disputes.
Date: 2022.07.12
19:04:45 IST
Learned Senior counsel further placed reliance over the judgment of High
Court of Madras in the case of M/s.V.A. Haseeb & Co.Vs. Chief
Commissioner of Income Tax (WP No.32731/2015) whereby the Madras
High Court has held that...........
In the case on hand, against the conviction and sentence
passed by the trial Court, on the complaint preferred by the
appellants, the respondents has filed an appeal and the same is
pending, which is a prescribed course of action for enforcing a
legal right. The said appeal is also a proceeding as contemplated
under Section 279(2) of the Act.
For the discussion above, this Court is of the considered view
that pending appeal, the appellants can very well compound the
offence sought for by the respondent, which they failed...
On the other hand, learned counsel for the respondent/Income Tax
Department has opposed the prayer by submitting that the learned appellate
Court has passed the impugned order rightly and the petitioners are not entitled
for any relief from this Court. The petitioners have caused loss to the Govt. by
non-payment of the tax amount and penalty so imposed.
I have heard the learned counsel for the parties and perused the record.
In view of the aforesaid discussions, submissions made by learned
counsel for the parties and the law laid down by Hon'ble Apex Court in the case
o f Rajesh Kumar Sharma (supra) and by high Court of Madras in the
case of M/s.V.A. Haseeb & Co. (supra) corroborating with the facts of the
case that during the pendency of the appeal, the petitioners were became
entitled for compounding the offence as per the , the revision petition is liable to
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SAN AMIT KUMAR
Date: 2022.07.12
19:04:45 IST
be and is hereby allowed by setting aside the impugned 01.11.2021 passed in
CRA No.299/2019.
The matter is remitted back to the learned appellate Court concerned to
consider the application afresh within a period of two months from the date of
this order, in accordance with law without being influenced by this order.
With the aforesaid, the revision petition stands disposed off.
A copy of this order be sent to the court concerned.
Certified copy, as per rules.
(RAJENDRA KUMAR (VERMA))
JUDGE
amit
Signature Not Verified
VerifiedDigitally
Digitally signed by
SAN AMIT KUMAR
Date: 2022.07.12
19:04:45 IST
