Failure to attend proceedings can’t be a ground to reject application for condonation of delay: Bombay HC

[2019] 103 taxmann.com 292 (Bombay)

IT: Where assessee’s application for compounding of offence for delay in depositing tax deducted at source was dismissed only on ground that nobody attended proceedings when said application was taken up for hearing, impugned order was to be set aside and, matter was to be remanded back for disposal on merits

Section 276B, read with section 278B, of the Income-tax Act, 1961 – Offence and prosecution – Failure to pay tax on distributed profits of domestic companies/deducted at source – Assessee made interest payments but tax deducted at source on said payments was withheld – Thereupon, tax was deposited with treasury with a delay of 474 days – Interest was also paid for delay in depositing sum – Since there was a default, a show-cause notice was issued calling upon assessee as to why prosecution under section 276B, read with section 278B, should not be launched for delay in depositing tax deducted at source – An application for compounding of offences was made – Though assessee was served with letters of intimation informing date on which they should present themselves and seek relief in terms of compounding application, they could not depute a representative to remain present – Thus, assessee’s application was rejected and a criminal complaint was filed – Against said order, instant petition was filed – It was noted that respondents had not applied their mind to compounding applications by dealing with merits thereof – Whether since application had been dismissed only on ground that nobody attended proceedings when said application was taken up for hearing, impugned order was to be set aside and, matter was to be remanded back for disposal on merits and in accordance with law – Held,

Durgeshwari Hi-Rise & Farms (P.) Ltd.