S. 279(2) Compounding of offenses: The fact that the assessee has been convicted of an offense does not mean that the application for compounding of the offense is not maintainable. Under the guidelines, the competent authority has to examine the merits of the case and decide whether there is a case for compounding. There are no fetters on the powers of the competent authority under the guidelines. An appeal filed against a conviction is a “proceeding” for s. 279(2).
The power of compounding is exercisable when proceedings are pending. In the case on hand, the sentence imposed on the petitioner has been suspended by the Appellate Court and the appeal is still pending. Therefore, it has to be seen as to whether that conviction by the Criminal Court should be the only reason for rejecting the petitioner’s application for compounding the offence. Clause 4.4 of the guidelines states that cases not to be compounded. It commences with a non obstante clause stating that notwithstanding anything contained in the guidelines, the category of cases mentioned in clauses (a) to (g) should normally not be compounded. Thus, the guidelines does not specifically place an embargo on the competent authority to consider the application for compounding merely on the ground when the assessee has been convicted by a court of law