A circular cannot override or restrict the application of specific provisions enacted by the legislature and cannot take away a statutory right with which an assessee has been clothed.

JUDGMENT :

Jayant Banerji, JJ.

1. Heard Shri Shakeel Ahmad, learned counsel for the petitioner and Shri Gaurav Mahajan, learned counsel for the Income Tax Department.

2. This writ petition has been filed praying for the following relief:

"I. Issue a writ order or direction in the nature of certiorari quashing the show cause notice dated 16.11.2021 (Annexure No. 4) issued by respondent no. 2 and direct the respondent no. 2 to compound the case of the Petitioner.

II. Issue a writ order or direction in the nature of mandamus directing the respondent no. 2 to compound the case of the Petitioner."

3. Briefly stated facts of the present case are that a criminal case no. 193 of 2000 (Union of India Vs. M/S G.P. Engineering Works Mirzapur and three others) was filed in the Court of Special C.J.M., Varanasi under Section 276C(1) read with Section 277 and 278B of the Income Tax Act, 1961 against the petitioner on 29.3.2000 praying that the accused opposite parties may be summoned, tried and punished in accordance with law.

4. The petitioner filed an application for compounding of the offences which was received in the Office of the Chief Commissioner, Income Tax on 23.4.2021. The Chief Commissioner of Income Tax Allahabad issued a show cause notice dated 16.11.2021 which is reproduced below:

"F.No.-CCIT/Alld./ITO(Hq.-Tech.)/Compounding(Pros.)/2021- 22/3081 Date-16.11.2021

To,

M/s G.P. Engineering Works

R/o Kachhwa

P.S. Kachhwa, Mirzapur

Sir,

Sub- Application for compounding of prosecution u/s 276C(1) of the I.T. Act in the case of M/s G.P. Engineering Works R/o Kachhwa, P.S. Kachhwa, Mirzapur relating to A.Y. 1990-91 for willful attempt to evade tax in accordance with the section 139(1) of the Income Tax Act, 1961-Regarding-

Kindly refer to your application dated 22/04/2021 received in this office on 23/04/2021 on the subject mentioned above, for compounding of offence willful attempt to evade tax for A.Y. 1990-91.

2. After perusal of your aforesaid application, I am directed to state that it is noticed that prosecution was launched in your above mentioned case on 29.03.2000 and your application has been received on 23.04.2021 in this office. Thus you have filed compounding application after a delay of more than 20 years from the end of month in which complaint was filed. As per para 7(ii) of the compounding guidelines circulated vide F.No.285/08/2014-IT(Inv.V)/147 dated 14.06.2019 of CBDT "No application of compounding can be filed after the end of 12 months from the end of the month in which prosecution complaint, if any, has been filed in the court of law."

A relaxation had been provided by CBDT's circular 25/2019 circulated vide letter F.No.285/08/2014-IT(Inv.V)/350 dated 09.09.2019 as a one time measure, through which the condition that compounding application shall be filed within 12 months was relaxed till 31.12.2019 and further extended till 31.01.2020 vide circular no. 1/2020 dated 03.01.2020. However, your above mentioned application does not fall in effective time duration of circular 25/2019 and circular 01/2020.

3. Accordingly, in view of the above, I am further directed to require you to show cause as to why your application for compounding of offence dated 23.04.2021 may not be rejected. Your reply must reach this office latest by 29.11.2021, failure to which it will be considered that you don't have to say anything in this regard and decision will be taken on the material available on record.

Yours faithfully,

(S.K. Singh) Income Tax Officer (Hq.)/(Tech.)

O/o Chief Commissioner of Income Tax, Allahabad"

5. Learned counsel for the petitioner submits that the impugned show cause notice relying upon the circular dated 14.6.2019 is wholly illegal and without authority of law to the extent it intends to reject the compounding application on the ground of delay. He, therefore, submits that since the circular dated 14.6.2019 of CBDT is binding on the Income Tax Authority, therefore, submission of reply before the concerned Tax Authori