The Delhi High Court directed to consider the application for compounding offences under sections 276C(1) and 277 of the Income Tax Act, 1961 which was rejected on non-filing of a complete bank statement.
The petitioner Sanjiv Gupta challenged the order passed by respondent no.1 under Section 279(2) of the Income Tax Act, 1961 [“the Act”]. The respondent rejected the application filed by the petitioner for compounding the offences punishable under Sections 276C(1), 276D and 277 of the Act inter alia, concerning Assessment Year (AY) 2006-07.
The order passed by respondent no.1 whereby the petitioner’s application for rectifying the order was rejected. The petitioner has also sought the issuance of mandamus to respondent no.1 for compounding the offences punishable under the provisions for the period in issue.
The petitioner prayed that respondent no.1 should consider de novo, albeit, as per the law, the application filed by the petitioner, which was the subject matter of the impugned order. An interlocutory prayer has also been made in the petition, whereby a direction was sought to stay further proceedings in the complaints about the provisions of the Act.
A perusal of the impugned order would show that, in sum and substance, the petitioner’s application was rejected as, according to the concerned officer, the petitioner had failed to furnish the complete bank statements of the accounts maintained by him in the Geneva Branch of HSBC Bank.
The impugned order also refers to the fact that the respondents/revenue had offered to assist in securing the bank statements, however, for that purpose, consent waiver forms had to be submitted, which when provided to the HSBC Bank, would have enabled the respondents/revenue to secure the bank statements.
It was contended that once a request was made to furnish consent waiver forms, the petitioner submitted the same. Mr Shailendera Singh, senior standing counsel, who appeared on behalf of the respondents/revenue, stated that if he had the petitioner straightaway given the bank statements before the compounding application was considered, the matter would not have come to pass.
The petitioner had furnished the bank statements in November 2019 as well, albeit after the impugned order was passed. A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the best way forward would be to direct the concerned officer to decide the petitioner’s compounding application afresh, since, in any event, the bank statements are now available with the respondents/revenue.
The court set aside the impugned orders. The concerned authority will adjudicate the petitioner’s compounding application dated 22.02.2016 afresh. The petitioner and/or his authorised representative will also be accorded a personal hearing in the matter by the concerned officer.
Further directed to dispose of the compounding application at the earliest, though not later than eight (8) weeks.
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