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IN THE HIGH COURT OF JUDICATURE AT MADRAS
C. SARAVANAN, J.
K.M.Mammen - Petitioner
Versus
The Principal Commissioner Of Income Tax – Respondent
W.P.No.24029 of 2025, W.M.P.No.27031 of 2025
Decided On : 16-12-2025
| Table of Content |
|---|
| 1. background of the case and initial challenges. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. arguments regarding the application of guidelines. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 14 , 15 , 17 , 18 , 19 , 20 , 21) |
| 3. court’s analysis of the applicability of compounding guidelines. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34) |
| 4. court's reasoning against new guidelines. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54) |
| 5. final decision to remand based on previous guidelines. (Para 56 , 57) |
ORDER :
C. SARAVANAN, J.
This is the third round of litigation before this Court in the present Writ Petition.
2. The Petitioner, a senior citizen, has challenged the impugned communication dated 11.06.2025 passed by the 5th Respondent bearing reference F.No. 2009(37)/2019-20
3. The impugned order has been passed purportedly in compliance with the order of the Hon’ble Supreme Court dated 05.03.2025 in S.L.P. (Crl.) No.6179 of 2019 and S.L.P. (C) No. 7047 of 2024
4. By the impugned communication the Petitioner has been asked to pay a sum of Rs.1,29,88,765/- as compounding charges. Operative portion of the impugned communication is extracted as below:-
I am directed to inform you that the compounding charges determined by the Assessing Officer, in accordance with the Guidelines dated 17.10.2024, have been approved by the Director General of Income Tax (Investigation), Tamil Nadu & Puducherry. As per the compounding Guidelines dated 17.10.2024 the compounding charges have been determined as below:-
| Income sought to be concealed as per order u/s | Rs.2,26,38,372/- |
|---|
| 143(3) r.w.s 147 dated 29.12.2009 | |
|---|---|
| Tax thereon @ 30% and Surcharge @ 2% | Rs.69,27,342/- |
| Compounding Fees @ 125% of tax sought to be evaded on unreporting income u/s 276C(1) | Rs.86,59,177/- |
| Compounding Fees @ 50% of tax sought to be evaded due to offence committed u/s 277* | Rs.0/- |
| Increased compounding charges as per para 10.7 of the guideline** | Rs.43,29,588/- |
| Compounding Charges payable now | Rs.1,29,88,765/- |
In this regard you are directed to pay compounding charges of Rs.1,29,88,765/- within a period of 30 days and to produce the challan in proof of the same, for consideration of compounding of offences.
5. In the background is an application dated 25.03.2011 filed earlier under Section 279 of the Income Tax Act, 1961 before the 4th Respondent, namely the Director General of Income Tax (Investigation), which came to be rejected by an order dated 15.01.2014 by the said Respondent. Thus, the Petitioner challenged the said order dated 15.01.2014 in W.P. No. 3929 of 2014
6. After considering the submissions of the Petitioner and the Respondents therein, W.P. No. 3929 of 2014 was allowed by writ Court vide order dated 28.08.2019 with the following observations:-
9. Point C, D and E
Now that, this Court has held that the appropriate authority to consider a compounding petition filed under Section 279 of the Act would be by a Committee comprising of the CCIT (CCA); DGIT (Investigation); and CCIT/DGIT having jurisdiction over the case, as per the revised Guidelines of CBDT and that in view of the subsequent developments, whereby the penalty imposed on the petitioner has been reduced by the Commissioner of Income Tax, Appeals on 25.03.2014 and the same being confirmed by the Income Tax Appellate Tribunal on 27.09.2017, the contentions raised in point Nos.C,D and E are not specifically dealt with by this Court since, this Court is of the view that the matter be remanded back to the Committee prescribed under the revised Guideline No.7.1(c) for passing appropriate orders.
10. In the light of the above observations, the impugned order passed by the first respondent herein under Section 279 (2) of the Income Tax Act, 1961 dated 15.01.2014 is set aside and the matter is remanded back to the Committee prescribed under the CBDT Guideline No.7.1(c) dated 16.05.2008. The petitioner is granted liberty to place a copy of this order along with afres
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