October 2022
Offences and prosecution — Wilful attempt to evade tax — Application for compounding of offences — Limitation — Show-cause notice issued for rejection of compounding of offences on ground of bar of limitation relying on circular issued by CBDT — Circular cannot override statutory provision — Authority to consider assessee’s application
By K. B. Bhujle, Advocate
44 G. P. Engineering Works Kachhwa vs. UOI
[2022] 446 ITR 563 (All.)
A.Y.: 1990-91
Date of order: 8th February, 2022
Ss. 276C, 277, 278B and 279(2) of ITA, 1961
Offences and prosecution — Wilful attempt to evade tax — Application for compounding of offences — Limitation — Show-cause notice issued for rejection of compounding of offences on ground of bar of limitation relying on circular issued by CBDT — Circular cannot override statutory provision — Authority to consider assessee’s applicationA criminal case was filed against the assessee u/s 276C(1) read with sections 277 and 278B of the Income-tax Act, 1961 on the ground of wilful attempt to evade tax relating to the A.Y. 1990-91. The assessee filed an application for compounding of the offences before the Chief Commissioner who issued a show-cause notice for rejecting the application relying upon the Board’s Circular F. No. 285/08/2014-IT (Inv.V)/147 dated 14th June, 2019.
The Allahabad High Court allowed the writ petition filed by the assessee and held as under:
“i) In terms of sub-section (2) of section 279 of the Income-tax Act, 1961 any offence under Chapter XXII of the Act may be compounded by the authorised officer either before or after the institution of the criminal proceedings. No limitation for submission or consideration of compounding application has been provided under sub-section (2) of section 279 of th
