Footcandles Film Pvt. Ltd. Vs . Income Tax Officer – TDS – 1

Case snapshot

Sections / provisions: See packaged judgment

Questions before the Court / Tribunal

• TDS prosecution/assessment concerning film-production payments and procedural legality.
• What factual, statutory and procedural conditions control the relief?
• How does the operative order apply to the parties and the challenged proceeding?

Material facts and procedural background

WRIT PETITION NO.429 OF 2022 1. Footcandles Film Pvt. Ltd., ] a company incorporated under the ] Companies Act, 1956, having its ] registered office at 101, Saturn 729, ] Palimala Road, Bandra (West),Mumbai – 400 050. ] 2. Nirav Dama, of Mumbai, ] Principal Officer of Footcandles Film ] Private Ltd., presently residing at 103, ] Ashirwad CHS, Plot No.99, Sector 16, ] Koparkhairane, Navi Mumbai – 400 705. ] .. Petitioners Versus 1. Income Tax Officer – TDS – 1, ] [Successor to ITO – TDS – 1(5)], ] Room No.907, 9th Floor, ] K.G. Mittal Ayurvedic Hospital Building, ] Opp. Charni Road Station (West), ] Mumbai – 400 002. ] 2. Commissioner of Income-Tax (TDS), Mumbai, ] Room No.900-B, 9th Floor, ] K.G. Mittal Ayurvedic Hospital Building, ] Opp. Charni Road Station (West), ] Mumbai – 400 002. ] 3. Chief Commissioner of Income Tax (TDS), Mumbai ] Room No.1000A, 10th Floor, K.G. Mittal ] Ayurvedic Hospital Building, ] Opp. Charni Road Station (West), ] Mumbai – 400 002. ] 4. Union of India, ] Through Secretary, ] Ministry of Finance, North Block, ] New Delhi. ] .. Respondents 1/22 Sr.No.14-WP-429-2022-Order dt.28-11-2022.doc Dixit

Ms. Fereshte Sethna, with Ms. Mrunal Parekh, i/by DMD Advocates, for the Petitioners. Mr. Suresh Kumar for the Respondents.

filed by the petitioners for compounding of an offence committed, under

3. The case of the petitioner no.2 is that for the relevant Financial Year

2009-10, the petitioner no.1-company deducted income tax to the tune of

Appellant / assessee submissions

10. We have heard Ms. Fereshte Sethna, learned counsel for the petitioners

and Mr. Suresh Kumar, learned counsel for the respondents and perused the

11. It is the contention of learned counsel for the petitioners that the

contended that plain reading of the provisions of sub-section (2) of Section

Revenue / respondent submissions

“6. The learned counsel for the Revenue urges that the binding nature of the Board’s instructions and guidelines is apparent from explanation to Section 279(3), which clarifies that the power to grant or refuse compounding is essentially discretionary and actually administrative. Therefore, the guidelines framed for its exercise under Section 279 are binding upon all Revenue Authorities including the Chief Commissioner. Learned counsel relied upon the Supreme Court decision in Asstt. CIT v. Velliappa Textiles Ltd., (2003) 263 ITR 550 / 132 Taxman 165 (SC) to highlight that compounding application cannot be concluded to as a matter of right, but rather is subject to exercise of discretion. There is no quarrel with the proposition that power to accept a plea for compounding or refusal is essentially discretionary. The exercise, however, in each case is dependent upon the Authority, who has to apply his or her mind judiciously to the circumstances of each case. The rejection of the petitioner’s application in this case is entirely routed on the Chief Commissioner’s understanding of the conditions of ineligibility of para 8(v) apply. In this Court’s opinion, that view was based upon…

Court / Tribunal analysis and reasoning

10. We have heard Ms. Fereshte Sethna, learned counsel for the petitioners

28. In our considered view, to the extent CBDT Guidelines dated 14 th June

32. In the present case, we find that this is a classic case for consideration

Operative decision and relief

disposed of, and in which there is an order of suspension of sentence imposed

quashed and set aside. Accordingly, we pass the following order :-

for compounding of an offence, is quashed and set aside.

(ii) Consequently, we remand the application, under the

Ratio and legal principle

• The packaged judgment addresses TDS prosecution/assessment concerning film-production payments and procedural legality. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
• Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with tds prosecution/assessment concerning film-production payments and procedural legality. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

• Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
• Verify current appellate, review and SLP history and any later amendment or controlling authority.
• Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

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Section / provision impact

• See the statutory provisions identified in the packaged judgment.

Case network

Similar issue / useful comparison

• PCIT v. Valley Iron & Steel Co. Ltd. - Court / Tribunal to be verified
• Saltwater Studio LLP v. NFAC - Court / Tribunal to be verified
• Hemant Lalwani v. ITO - Court / Tribunal to be verified

Different outcome / possible distinction

• No source-reviewed contrasting case is linked yet.

Full judgment and source control

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