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CASES REFERRED TO M.P. Tewari v. Y.P. Chawla, ITO [1991] 187 ITR 506 (Delhi). JUDGMENT M.K. Chawla, J. - In this writ petition under article 226 of the Constitution of India, read with section 482 of the Code of Criminal Procedure, the petitioner is seeking the quashing of the prosecutions lodged against him in the court of the Chief Metropolitan Magistrate, Delhi, entitled:ITO v. Dr. M.L. Passi, for non-deposit of tax deducted at source, for the years 1969-70 and 1970-71, and the quashing of instruction No. 1317 dated March 11, 1980 issued by respondent No. 1/Central Board of Direct Taxes in taking away the powers of the Commissioner of Income-tax in the matter of compounding of the offences as being ultra vires the powers given to respondent No. 1 under section 119 of the Income-tax Act. To appreciate the submissions in support of the relief claimed, we have first to state a few relevant facts. The petitioner, Dr. M.L. Passi, is a physician and surgeon by profession. After practising for some time, he joined the service of the Delhi Municipal Committee in the year 1944 and retired as Deputy Health Officer in the year 1965. Immediately after his retirement, he joined Inspi Auto Industries (P.) Ltd., which was virtually controlled by his father-in-law, Shri I.S. Vedi, as its managing director. The company was engaged in the manufacture of carburettors and fuel pumps and their parts from its very inception. The company had set up a factory at 14/6, Mathura Road, Faridabad (Haryana), for the manufacture of its products. In the year 1966, the sales of the company stood at Rs. 18.95 lakhs but, unfortunately, in the next year, due to recession, the manufacturers to whom bulk supplies were being made by the company suffered a setback. The company got into further serious financial difficulties in the year 1973 due to worldwide abnormal rise in prices of vehicles on account of which the demand for vehicles was seriously affected. In fact, as on June 30, 1973, the net loss that the company has suffered stood at Rs. 6 lakhs and odd and the share capital of the company of Rs. 5 lakhs got completely wiped out. In the face of the financial difficulties, one of the…

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