Learned Senior Counsel Appearing For Thepetitioner Has Relied Upon The Judgment Of The Divisionbench Of This Court In Case Offootcandles Film Pvt Ltdand Another v. Page3 Of 5

IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD CRIMINAL WRIT PETITION NO.1723 OF 2022 DHAVAL FOODS, JALGAON THROUGH DIRECTOR PRATISEHK V.KABRAVERSUS THE UNION OF INDIA THROUGH OFFICE OF CHIEF COMMISSIONEROF INCOME TAX, PUNE AND ANOTHER ... Advocate for Petitioner : Mr. S. B. Deshpande, SeniorAdvocateAdvocate for Respondents :Mr. A. M. Sharma... CORAM:R.M. JOSHI, J DATE:AUGUST 09, 2023 PER COURT : 1.This Petition is filed under Article 227 of the Constitution of India takes exception to thelegality and validity of order dated 11.08.2022 passed by the Principal Chief Commissioner of Income Tax inconnection with provisions of Sections 276(B) and276(C)(1) read with Section 277 and 278-B of Income Tax Act, 1961 (for short ‘the Act’). 2.Petitioner company is a private limitedcompany registered under the Companies Act, 1957engaged in the business of trading and import andexport in various commodities. Petitioner company is accessible to the income tax. It is the case of thePetitioner that on 12.07.2012 a sum of Rs. 1,98,145/-came to be deducted by the Petitioner company towardsTDS in the first quarter of the financial year 2011-2012. The said amount was belatedly deposited in theGovernment account. Thereafter on 01.11.2013 income taxoffice called upon the Petitioner company to providedetails of the TDS paid. The said letter was replied on16.03.2015. Respondent No. 3 filed complaint beingR.C.C. No. 208/2016 before Chief Judicial Magistrate,Jalgaon after obtaining the sanction from competentauthority. 3.It is the case of the Petitioner that on29.06.2019 the Petitioner company came to know aboutthe filing of the said complaint after thecommunication in this regard was received by the thenDirector of the company, who later on died. It is alsoclaimed that there were untimely deaths in the familyof the Director of the Petitioner company. It isfurther case of the Petitioner that after death ofprevious Director, he search of the record. It came tohis knowledge about pending of the criminal complaint. Hence, an application dated 20.12.2021 was filed forcompounding of the offences. Since, the saidapplication was not responded, another applicationdated 12.07.2022 was filed in prescribed format. Bypassing impugned order dated 11.08.2022, Respondent No.2 rejected the said application, which gave cause ofaction for the Petitioner to file present Petition. 4.Learned Senior Counsel appearing for thePetitioner has relied upon the judgment of the DivisionBench of this Court in case ofFootcandles Film Pvt Ltdand Another Vs. Income Tax Officer and Others,(WritPetition No.429/2022), which has dealt with the sameguidelines which are covered by the present Petition.In the said judgment it is held that powers underSection 279(2) cannot be limited by issuance ofguidelines as done in this case. He further submitsthat the application for compounding of the offenceshas been rejected solely on the ground that it isbeyond limitation as per guidelines and said rejectionis not on merits. 5.Learned Counsel for the Respondents opposedthe said application mainly by relying upon thejudgment of Hon’ble Apex Court in case of Y. P. Chawala and Ors Vs. M. P. Tiwari and Anr. By relyingon the said judgment it is contended that Hon’ble ApexCourt has upheld the powers under Section 119(1) of theIncome Tax Act to be provided in the guidelines andguidelines if so issued are binding in nature. LearnedCounsel for the Respondents, however, unable todistinguish the judgment of the Hon’ble Apex Court andthe Division Bench of this Court which has binding forthis Court. 5.Learned Counsel for the Respondents opposedthe said application mainly by relying upon thejudgment of Hon’ble Apex Court in case of Y. P. Chawala and Ors Vs. M. P. Tiwari and Anr. By relyingon the said judgment it is contended that Hon’ble ApexCourt has upheld the powers under Section 119(1) of theIncome Tax Act to be provided in the guidelines andguidelines if so issued are binding in nature. LearnedCounsel for the Respondents, however, unable todistinguish the judgment of the Hon’ble Apex Court andthe Division Bench of this Court which has binding forthis Court. 6.Issue involved in this case is squarely anddirectly covered by judgment of the Division bench incase of Footcandles Film Pvt Ltd and Anr. (supra). Itdeals with the issue as to whether the guidelinesissued in exercise of powers under Section 119(1) ofthe Income Tax Act supersedes the powers under Section279(2) for compounding of offenes. In the presentPetition also the same guidelines are in question. ThisCourt is bound by the said judgment, and there is noreason to take different view. 7.Perusal of the judgment of the Hon’ble ApexCourt in case of Y. P. Chawala and Ors (supra) no doubtlays down that powers under Section 119(1) of the Act provides for issuance of guidelines and such guidelineshaving binding effect. The said judgment, however, doesnot deal with the effect of said guidelines on thepowers of the authority under Section 279(2) forcompounding of the offences. The judgment in case ofFootcandles Film Pvt Ltd and Anr (supra) cannot bedistinguished on the facts of the case as it directlydeals with the issue involved in the present case.Having regard to these facts, by following judgment ofDivision bench of this Court, the impugned order dated11.08.2022 passed by Respondent No. 2 cannot besustained and hence, same deserves to be set aside. 8.In view of above, discussion, Petition isallowed in terms of prayer clause ‘C’. Parties arerelegated back to the concerned authority for decisionafresh on the application for compounding filed by thePetitioner company. Needless to say that the saiddecision shall be on the merits and without consideringthe delay caused in making the application. Malani