Income Tax Dept Initiates Criminal Prosecution without Considering Reply: Madras HC directs to dispose of Compounding Application Within 4 Weeks

The Madras High Court directed the Income Tax Department to dispose of a taxpayer's compounding application within four weeks after it was found that the department initiated criminal prosecution without considering the taxpayer's reply. The taxpayer had submitted a compounding application in response to the prosecution, but the authorities failed to take it into account. The court emphasized that initiating criminal prosecution without addressing the taxpayer's response violates principles of natural justice. By ordering the department to process the compounding application swiftly, the court reiterated the importance of due process in tax-related criminal proceedings and provided relief to the taxpayer, highlighting the need for fair consideration before prosecution.