JUDGMENT :

K.R. Shriram, J.

1. Petitioner no.1 is a Limited Liability Partnership firm. Petitioner nos.2 and 3 are partners of petitioner no.1. For the period of assessment year 2009-2010, petitioner no.1 for various reasons did not deposit the TDS amount that it had deducted with the income tax authorities. Petitioner no.1 deposited those TDS amounts on or about 23rd March 2010 beyond the time provided for deposit. This was before petitioners even received a show cause notice from the department. There is no outstanding on amount of TDS.

2. Petitioners received the show cause notice dated 30th November 2011 calling upon petitioners to show cause as to why prosecution against them be not lodged for offence under Section 276B read with Section 278B of the Income Tax Act, 1961 (the Act). On 26th March 2012, petitioners filed a compounding application dated 5th March 2012 (first application) in the prescribed format. On 25th February 2013, hearing notice was issued to petitioners and petitioners were given a personal hearing. Chief Commissioner of Income Tax, i.e., respondent no.3 declined the prayer to compound the offence. This was because on 25th February 2013, during the personal hearing, petitioners’ representative had agreed to pay the compounding fees of Rs.7,39,984/- as calculated by CIT (TDS) Mumbai by 15th March 2013 but petitioners failed to deposit the compounding fees. The break up of Rs.7,39,984/- is as under :

3. On 22nd April 2013, petitioner requested for time of one more month for payment and extension was granted up to 10th May 2013. No payment was however made. Therefore, the department sent a reminder on 5th July 2013 calling upon petitioner to pay the compounding fees by 12th July 2013. Petitioner did not respond or deposit the said compounding fees. In view thereof, petitioner’s application dated 5th March 2012 came to be rejected.

4. On 26th August 2013, respondent no.2 passed a sanction order for initiation of prosecution against petitioners. On 28th August 2013, respondent no.2, through respondent no.1, filed a complaint before the Metropolitan Magistrate, 38th Court at Esplanade under Section 276B read with Section 278B of the Act. Matter was later transferred to Ballard Pier Court and then now it is at Mazgaon Court, Mumbai.

5. On 14th July 2014, petitioner no.1 paid the entire compounding fees of Rs.7,39,984/- as was indicated by respondent no.3 during the personal hearing on 25th February 2013 and as indicated in the rejection order dated 17th July 2013. On 8th October 2015, petitioner filed a fresh compounding application (second application) before respondent no.3 and also agreed to pay any further or additional compounding fees as may be directed.

Almost three years later on 21st September 2018, petitioner received a letter dated 17th September 2018 annexing thereto copy of the order dated 17th July 2013. The letter dated 17th September 2018 reads as under :

“No:-CCIT(TDS)/Mum/HQ/Compounding matter/173/2018-19

Date: 17.09.2018

To,

The Principal Officer,

M/s. Sofitel Realty Pvt Ltd.,

Plot No. 1/838, Lady Jamshedji Road,

Near Bank of Maharashtra,

Mahim (W).

Mumbai 400 016.

Sir,

Sub: Clarification and reply for the compounding of offences for A.Y. 2009-10-reg

Ref: Your compounding application filed on 04.08.2015 for the A.Y. 2009-10.

Kindly refer to the above.

2. In this regard, I have been directed by the CCIT (TDS), Mumbai to inform you that your application for compounding of offence for AY. 2009-10 filed on 26.03.2012 has already been "Rejected by CCT(TDS), Mumbai on 17.07.2013.

3. A copy of the order passed u/s. 279(2) of the LT. Act, 1961 dated 17.