Delhi High Court - Orders
Naresh Aggarwal & Anr vs Chief Commissioner Of Income Tax (Tds) & ... on 20 September, 2022
Author: Manmohan
Bench: Manmohan, Manmeet Pritam Singh Arora
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12313/2022 & CM APPL. 36930/2022
NARESH AGGARWAL & ANR. ..... Petitioners
Through: Mr. Sameer Rohatgi, Mr. Sachit Jolly
& Mr. Kartikay Singh, Advocates.
versus
CHIEF COMMISSIONER OF INCOME TAX
(TDS) & ORS. ..... Respondents
Through: Mr. Sunil Kumar Agarwal, Sr.
Standing Counsel for the Revenue
with Mr. Tushar Gupta and Mr.
Utkarsh Tiwari, Advocates.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
ORDER
% 20.09.2022 Today, Mr. Sunil Kumar Agarwal, Sr. Standing Counsel for the respondent/revenue has handed over the following note:-
"Note in case of Sh. Naresh Aggarwal and ANR V/s Chief Commissioner of Income Tax(TDS) & ORS With regard to email dated 07.09.2022, this office submits that:-
1. In this case compounding application was filed on 22.03.2017 U/s 276B & 278B for the company and the principal officer and Sh.
Naresh Aggarwal filed the same in capacity of director of the company.
2. As per working sheet, the TDS default in F.Y. 2013-14 is 1343912/- and in F.Y. 2014-15, it is 1121857/-. Total TDS default is 2465769/- + Rs. 675336/- (Interest) for both F.Ys. under consideration.
Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:21.09.2022 18:29:193. In this case compounding fee for Main accused is Rs. 1350672/-, Prosecution Establishment Expenses is Rs. 135067/- and Co-accused fee is 148574/-. (it appears that compounding fee for co-accused is calculated at more than 10% of main accused).
4. CIT(TDS)-1 endorsed the working sheet of assessing officer and recommended the case with compounding charges at Rs. 1634313/-. Vide intimation letter dated 28.06.2017, the same compounding charges were intimated to the applicant vide letter dated 28.02.2017, the applicant submitted a challan of Rs. 588352/- and sought for three installments to pay balance Rs.1045961/- upto December 2017.
5. After numerous correspondences between department and the applicant, ultimately extension upto 30.10.2017 was granted to the applicant. Subsequently, vide letter dated 09.11.2017, the applicant filed, a letter enclosing NCLT order dated 26.10.2017 and shifted the onus of payment of balance compounding fee to IRP to be appointed by NCLT.
6. As per NCLT order, one of the creditors sent a demand notice to the applicant company on 17.08.2017 to which the applicant company duly filed a reply on 14.09.2017. As per order, operational creditor removed all the defects and filed its application with NCLT on 16.09.2017. The above sequence shows that the applicant company was well aware about the proceedings going on NCLT and yet it continued seeking extension of time with department, just to stall the compounding matters reaching to a conclusion. As soon as NCLT passed an order, applicant company submitted the letter dated 09.11.2017.
7. Vide letter dated 27.05.2022, the applicant company was duly intimated regarding the stand of the department and it was duly informed that compounding is not a statutory due/liability and it is an arrangement between the administrator of an enactment and person committing an offence under such enactment. Since it is not a statutory due/liability, therefore, it is not the case of the department to submit a claim for it with the IRP.
Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:21.09.2022 18:29:198. Since the compounding application was filed u/s 276B & u/s 278B, therefore the intimation of compounding charges included compounding charges towards main accused and co-accused, both.
9. The petitioner himself is stating that he was not part of the management once the Resolution Professional was approved on 29.01.2018. Also the company itself is a respondent in this case and compounding charge of co-accused, which stands at Rs. 148574/-, cannot be compounded standalone even if paid unless the Main Accused makes the payments towards its compounding fee/charges.
10. Under the prayer, the petitioner wishes to deposit the remaining compounding charges accrued upto 10.11.2017. Firstly, petitioner is just a co-accused and it cannot pay compounding charges pertaining to him stand alone. As per guidelines dated 23.12.2014, Para 12.8.3 states that a compounding fee shall be charge of each of the person charged u/s 278B or 278C and the compounding fee chargeable from the co-accused shall be in addition to compounding fee which may be chargeable from main accused. Secondly, the compounding who is main accused has not undertaken anything in this writ petition to pay the compounding charges payable by the main accused. From the writ petition it is not clear whether the petitioner intends to pay the complete compounding charges (for both main accused and co accused).
11. The petitioner is asking to pay the compounding charges accrued upto 10.11.2017. whereas as per compounding guidelines dated 23.12.2014, any applicant intimated of compounding charges need to pay additional compounding fee for the period of delay, for extension of time granted and beyond the extension of time granted on the unpaid compounding charges. In this case, the applicant was granted an extension of time upto 30.10.2017, therefore, as per law the applicant should pay at 2% per month or part of the month for the unpaid amount of compounding charges for both the period i.e. period upto 30.10.2017 and delay upto passing of order u/s 279(2) i.e. 17.06.2022.
Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:21.09.2022 18:29:1912. In the impugned case, the following need to be discussed/deliberated upon:
Without the compounding or payment of compounding charges for the Main Accused, standalone compounding of offence in respect of Co-accused u/s 278B or 278C cannot be done, unless the co-accused undertakes to pay the compounding charges in toto.
Up-to-date compounding charges will include the remaining part of compounding charges intimated vide Intimation letter dated 28.06.2017 and additional compounding charges at the rate of 2% upto June 2022 in accordance with compounding guidelines issued by CBDT, as applicable.
The petitioner must submit an undertaking before the Hon'ble High Court to pay the compounding charges on behalf of Main Accused too, for the amount decided/determined by the Hon'ble court.
Further, a request may kindly be placed before the Hon'ble High Court, in context of this matter, to:
o Adjudicate whether compounding charges fall within the category of 'statutory due/liability' to be put under 'the claim' before the resolution professional or not.
o Adjudicate whether clauses of section 14 and other relevant sections of IBC 2016 are applicable to compounding of offences under section 279(2) of Income-tax Act 1961 & under relevant compounding guidelines issued by CBDT, or not."
Mr. Sachit Jolly, learned counsel who appears for the petitioners reiterates that the petitioners shall pay the complete up-to-date compounding charges i.e. for both the main accused as well as all the co-accused.Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:21.09.2022 18:29:19
Learned counsel for the respondent is directed to intimate the total outstanding compounding fee that is payable by the petitioners within two weeks.
List on 14th October, 2022.
MANMOHAN, J MANMEET PRITAM SINGH ARORA, J SEPTEMBER 20, 2022/msh Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:21.09.2022 18:29:19