9911796707
TMI BlogGUIDELINES FOR COMPOUNDING OF OFFENCES UNDER DIRECT TAX LAWS, 2014X X X X Extracts X X X X X X X X Extracts X X X X ..... GIT. 4. Compounding is not a matter of right: 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 each case. 5. Applicability of these guidelines to prosecutions under IPC: Prosecution instituted under Indian Penal Code, if any, cannot be compounded as per these guidelines. However, section 321 of Criminal Procedure Code, 1973 provides for withdrawal of such prosecutions. 6. Classification of Offences: The offences under Chapter-XXII of the Act are classified into two parts (Category 'A' and Category 'B') for the limited purpose of compounding of the offences. 6.1 Category 'A' Offences punishable under the following sections are included in Category 'A': Sl. No. Section Description/Heading or section i. 276 (Prior to 01/04/1976) - Failure to make payment or deliver returns or statements or allow inspection. ii. 276B (Prior to 01/04/1989) - Failure to deduct or pay tax iii. 276B (w.e.f. 01/04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion establishment expenses and the litigation expenses including counsel's fee, if any, determined and communicated by the CCIT/DGIT concerned. iv. The person undertakes to withdraw appeal filed by him, if any, in case the same has a bearing on the offence sought to be compounded. In case such appeal has mixed grounds, some of which may not be related to the offence under consideration, the undertaking may be taken for appropriate modification in grounds of such appeal. 8. Offences generally not to be compounded: i. A Category 'A' offence sought to be compounded by an applicant in whose case compounding was allowed in the past, in an offence under the same section for which the present compounding has been requested, on 3 occasions or more. ii. A Category 'B, offence other than the first offence as defined herein below: First offence means offence under any of the Direct Tax Laws committed prior to (a) the date of issue of any show-cause notice for prosecution or (b) any intimation relating to prosecution by the Department to the person concerned or (c) launching of any prosecution, whichever is earlier; OR Offence not detected by the department but voluntarily disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegory 'B' of para 6 supra, involving compounding charges (as explained in para 13 infra) in excess of ₹ 10,00,000 (Rs. ten lakhs) shall be passed by the CCIT/DGIT concerned only on the recommendation of a committee comprising of 3 officers of the region concerned, namely (i) Principal CCIT, (ii) DGIT (Inv.) and (iii) CCIT/DGIT having jurisdiction over the case. In case such officers are not available within the region, the nearest DGIT or CCIT may be co-opted as Member. 10.1 Where Principal CCIT / DGIT(Inv) is the CCIT/DGIT having jurisdiction over the case, then another officer of the rank of CCIT may be co-opted as a member of the Committee. The CCIT/DGIT having jurisdiction over the case will act as the Member Secretary who will also co-opt such other member as the case may be, and convene the meeting, as well as maintain its minutes. 11. Compounding Procedure: i. On receipt of the application for compounding, the same shall be processed by the Assessing Officer/Assistant or Deputy Director concerned and submitted promptly along-with duly filled in check-list (Annexure-2), to the authority competent to compound, through proper channel. ii. The competent authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing fee in the category shall be calculated from the date of deduction to the date of deposit of tax deducted at source as is done in respect of calculating interest under section 201(1A). 12.2 Section 276C(1)- Wilful attempt to evade tax etc. 100% of the amount sought to be evaded. 12.3 Section 276C(2) - Wilful attempt to evade payment of any tax etc. 3 % per month or part thereof of the amount of tax etc., the payment of which was sought to be evaded, for the period of default. 12.4 Section 276CC - Failure to furnish returns of income. 12.4.1 2% per month or part of a month of the tax and interest determined on assessment or reassessment, in relation to return of income that was required to be furnished under section 139(1) or section 142(1) or section 148 or section 153A / 153C as the case may be, existing on the date of conveyance of compounding charges to the applicant, determined after rectification u/s 154 of the Act, if any and as reduced by the tax deducted at source and advance tax, if any, paid during the financial year immediately preceding the assessment year, reckoned from the date immediately following the date on which the return of income was due to be furnished to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78 , normally, a compounding fee@10% of the 'compounding fee for the main offence' shall be charged from each of the person charged under sections 278B or 278C . However, the authority competent to compound, after considering the extent of involvement of any or all co-accused, may enhance or reduce or waive the amount of compounding fee to be charged from any or all the co-accused. The compounding fees chargeable from the co-accused shall be in addition to the compounding fees which may be chargeable from the main accused. 12.8.4 In case where no offence under any other sections of I.T. Act is involved except under section 277 or 278 , the compounding fee shall be decided by the authority competent to compound having regard to the amount of tax which would have been evaded as a result of such offence u/s 277 or 278. 12.9 Offences, other than those described in para 12.1 to 12.8, for which no compounding fee has been prescribed, the authority competent to compound may determine the amount of compounding fee having regard to the nature and magnitude of the offence, subject to levy of a minimum compounding fee of ₹ 25,000/- for each such offence. 12.10 The prescribed com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounded earlier. If yes, how man times 11 Whether the offence is first offence as defined in para 8 (ii) of the guidelines 12 Whether the offence has been committed by the applicant who, as a result of investigation conducted by any Central or State agency has been found involved, in any manner, in anti-national/terrorist activity 13 Whether any enquiry/ investigation being conducted by Enforcement Directorate, CBI, Lokpal, Lokayukta or any other Central or State agency is pending against the applicant? If so particulars may be given 14 Whether the applicant was convicted by a court of law for an offence under any law, other than the Direct Taxes laws, for which the prescribed punishment was imprisonment for two years or more, with or without fine. If so, particulars may be given along with a co of the court's order 15 Whether, the application for 'plea-bargaining' under Chapter XXI-A of 'Code of Criminal Procedure' is pending in a Court and the Court has recorded that a 'mutually satisfactory disposition' of such an application is not worked out? 16 Whether the applicant was convicted by a court of law for the offence sought to be compounded 17 Whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FIR/complaint) by Enforcement Directorate, CBI, Lokpal, Lokayukta or any other Central or State agency* No On Page no. .. 8. Whether the offence has been committed by the applicant who, was convicted by a court of law for an offence under any law, other than the Direct Taxes laws, for which the prescribed punishment was imprisonment for two years or more, with or without fine* No On Page no. .. 9. Whether the application for 'plea-bargaining' under Chapter XXI-A of 'Code of Criminal Procedure' is pending in a Court or a Court has recorded that a 'mutually satisfactory disposition' of such an application is not worked out* No On Page no. .. 10. Whether the offence is one committed by an applicant for which he was convicted by a court of law No On Page no. .. 11. Whether the offence(s) committed by the applicant is one for which complaint(s) was filed with the competent court 12 months prior to the receipt of application for compounding No On Page no. .. 12. Amount of compounding charges computed by AO/ADIT/DDIT as per the guidelines No On Page no. .. 13. The compounding charges are in accordance with para 7 read with paras 12 and 13 of the Guidelines Yes 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .No.-285/35/2013-IT(Inv.V) dated 23.12.2014 on Compounding of Offences Order u/s 279(2) of 1.T.Act. Name of the person :- Status :- Offences u/s :- AYs / Date/ period involved in offence :- Date of filing of complaint, if any :- Status of case (i.e. whether Contemplated/ Pending in Court/ Convicted/ Acquitted) :- Date of hearing, if any :- Date of order :- ORDER u/s 279(2) of the Income-Tax Act, 1961 I, the Chief Commissioner of Income-tax / Director General of Income-tax, in exercise of powers vested in me by virtue of the provisions of sub-section 2 of section 279 of the Income Tax Act, 1961 hereby decline the prayer to compound the offence(s), u/s of the Income Tax Act for the A.Y.(s) / Date/ period , committed by M/s / Shri /Ms. . The case was not found to be a fit case for compounding as .. (mention reasons) . The Statement of the facts of the case are enclosed as Annexure A Place: Date: Seal Signature Chief Commissioner of Income-tax / Director General of Income-tax. Copy to:- The Commissioner of Income Tax/ Director of Income Tax----- The Assessing Officer/ ADIT/DDIT---- The ADIT/DDIT(Prosecution)----- The Prosecution Counsel (if the case is pending in the Court)----- The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
