Madras High Court
Eyeball Media Pvt Ltd vs The Chief Commissioner Of Income Tax ... on 13 August, 2024
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
W.P.No.22453 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 13.08.2024
CORAM
THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY
W.P.No.22453 of 2024
and WMP No.24453 of 2024
Eyeball Media Pvt Ltd.,
Represented by its Authorised Signatory, Mr.G.Sakthivel,
No.10, Kasthuribhai Nagar, III Main Road,
Adyar, Chennai, Tamil Nadu – 600 020 ... Petitioner
versus
The Chief Commissioner of Income Tax (TDS),
Aayakar Bhawan, Main Building, III Floor,
No.121, Mahatma Gandhi Road,
Nungambakkam, Chennai,
Tamil Nadu – 600 034. ... Respondent
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Certiorari to call for the records of the impugned
order dated 30.06.2023 with the reference
F.No.Compounding/CHEE04810B/2022-23 on the file of the respondent
and quash the same.
Page 1 of 6
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W.P.No.22453 of 2024
For Petitioner : Mr.N.Murali
For Mr.Ramamurthy.S.
For respondent : Dr.B.Ramaswamy
Sr.Standing Counsel
*****
ORDER
This writ petition is filed challenging the impugned order dated
30.06.2023 of the respondent, whereby the respondent has rejected the
compounding application filed by the petitioner on the ground that the
application was filed beyond the period of limitation of 36 months, as stated
in Para 7(ii) of the CBDT circular dated 16.09.2022.
2. The learned counsel appearing for the petitioner submits that there
is no time limit for filing of the compounding application and as per Section
279(2) of the Income Tax Act, any offence may, either before or after the
institution of proceedings, be compounded by the Principal Chief
Commissioner of Chief Commissioner or a Principal Director General of
Director General. Therefore, there is no period of limitation prescribed
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under Section 279(2) of the Act and hence, the impugned order rejecting the
compounding application on the ground of delay is unsustainable and
therefore, is liable to be set aside. To buttress his submission, the learned
counsel relied on the judgment of this Court in Jayshree vs. CBDT reported
in 2023 (11) TMI 1110 :: (2024) 464 ITR 81 (Mad). The learned counsel
therefore prays for quashing of the impugned order.
3. Per contra, Dr.B.Ramaswamy, learned senior standing counsel
appearing for the Revenue, would fairly submit that this Court by virtue of
the aforesaid judgment had struck down clause 7(ii) of the circular holding
that it is beyond the scope of the Act. He would however submit that
previously it was 12 months, but now the time limit was fixed as 24 months.
Be that as it may, by virtue of the judgment of this Court in Jayshree's
(supra), the learned counsel prays that appropriate orders may be passed.
Further, he would submit that the respondent also filed a writ appeal against
the said order, however, no interim order has been passed so far.
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4. I have given due consideration to the submissions of the learned
counsel for the petitioner as well as the learned standing counsel for the
Revenue.
5. As rightly pointed out by the learned counsel for the petitioner,
Section 279(2) of the Act does not prescribe any time limit for filing of the
compounding application. Further, the judgment of this Court in Jayshree's
case (supra), this Court has categorically held that the CBDT cannot issue a
circular contrary to the object of the 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 compounding of
offences and not for the purpose of fixing a time limit for filing the
application for compounding of offences and therefore, 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.
6. In such view of the matter, this Court is of the view that once the
nature of offence is compoundable by virtue of the provisions of the Act, it
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cannot be taken away by fixing a time limit for filing the compounding
application. The law laid down by this Court in the aforesaid judgment is
squarely applicable to the facts of the present case. Hence, the impugned
order is liable to be set aside and it is accordingly set aside.
7. The writ petition is, accordingly, allowed. There shall be no order
as to costs. Consequently, connected miscellaneous petition is closed.
8. The respondent is directed to take up the application for
compounding of offences on record and pass orders on merits and in
accordance with law. It is made clear that this order is passed only for the
respondent to take up the compounding application on record and pass
appropriate orders, but not for compounding of any criminal proceedings
already lodged or to be lodged against the petitioner.
13.08.2024
Index : Yes/No
Neutral Citation : Yes/No
sra
https://www.mhc.tn.gov.in/judis
KRISHNAN RAMASAMY, J.
(sra)
To
The Chief Commissioner of Income Tax (TDS),
Aayakar Bhawan, Main Building, III Floor,
No.121, Mahatma Gandhi Road,
Nungambakkam, Chennai,
Tamil Nadu – 600 034.
13.08.2024
https://www.mhc.tn.gov.in/judis
