Sec. 276B & 279 of Income Tax Act, 1961— Prosecution—Compounding of offences is not a matter of right. However, offences may be compounded by the Competent Authority on his satisfaction of the eligibility conditions prescribed in these guidelines keeping in view factors such as conduct of the person; nature and magnitude of the offence and facts and circumstances of the each case. The statutory provision of law makes it very clear that the compounding fees payable is 5 per cent in case its a second application and the Principal Chief CIT has furnished all minute details for imposition of compounding fees for the financial years 2013-14 and 2014-15 @ 5 per cent. Further, assessee also failed to pay the outstanding demand prior to the filing of aforesaid application, hence, did not fulfill the other eligibility condition also, therefore, due to these reasons the application claimed to have been filed by assessee is not found to be a valid one — Peb Steel Lioyd (india) ltd. vs. PR. CHIEF CIT [2020] 313 CTR 207 (MP)