Skip to main content

CBDT Issues Rules for Compounding Offences

Assessees who have admitted to holding foreign accounts, paid taxes and cooperated with I-T dept to be considered for compounding
The Central Board of Direct Taxes (CBDT) has issued guidelines for compounding of offences under Income Tax Act, 1961Wealth Tax Act, 1957, in cases of persons holding undisclosed foreign bank accountsassets. The CBDT on Friday issued directions to all field formations, including principal chief commissioners, chief commissioners and principal DGs Income-Tax, to compound cases, where an assessee has cooperated fully or partially and paid taxes.
The CBDT clarified that the matter was examined in consultation with the Special Investigation Team (SIT) on black money .
The ET, on Aug 12, reported that SIT had approved compounding of offences under the Income-Tax Act, for Indians holding accounts in foreign banks, many of whom are facing prosecution for tax evasion and concealment of income.
According to the compounding guidelines, “The cases in which the assessee has admitted accountsassets either fully (all accounts with which he is associated) or partially (only a few accounts out of all accounts with which he is associated), paid taxes and penalty and cooperated with the department may be considered for compounding as per the guidelines the guidelines dated 23.12.2014, only after filing the complaints.“
In the guidelines issued on December 23, 2014, the CBDT had clarified that offences may be compounded by the authority on its satisfaction of the eligibility conditions and keeping in view factors such as conduct of the person, nature and magnitude of the offence and facts and circumstances of each case.
It said, 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.
And the eligibility conditions for compounding included that, the person has paid outstanding tax, interest, penalty and any other sum due, relating to the offence for which compounding has been sought, the person undertakes to pay the compounding charges including the compounding fee, 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.
Meanwhile, compounding guidelines issued on September 4 clarified that “such cases can be compounded only after filing the prosecution complaint(s) and shall not be compounded at the stage of show cause notice and or without filing the complaint in the court.“ However, the CBDT has decided not to compound cases, where assessee has failed to cooperate.
The guideline said, “The cases in which the assessee has not admitted the foreign bank account (s)assets andor has not cooperated with the department in the assessment, penalty & recovery proceedings shall not be compounded.“ Earlier, field formation had sought clarifications from CBDT, “whether offences relating to undisclosed foreign bank accountsassets could be compounded as per the extant guidelines of the Board dated 23.12.2014.“ The CBDT, had then presented this proposal to SIT probing black money, which in August approved the proposal.
In the meantime, the CBDT has also clarified that “there is no provision for compounding of offences under the newly enacted Black Money (Undisclosed For eign Income and Assets) and Imposition of Tax Act, 2015. Consequently, the above clarifications will not apply to cases coming under the purview of this Act.“
Compounding of offences is a discretionary power (under Section 279 of the I-T Act) vested with the tax authorities, who have so far refrained from entertaining such applications in the case of account holders of HSBC and Liechtenstein Bank. In case of compounding, the matter is resolved between I-T authorities and account holders, without any intervention by courts.
A panel set up by I-T authorities, which will include chief commissioner (central), director-general (investigation) and the commissioner of the zone where the case is being processed, will clear applications for compounding.
The compounding exercise will cover cases of Indians, who have bank accounts in HSBC Geneva, Liechtenstein-based LGT Bank and banks based in the British Virgin Islands.
The Economic Times, New Delhi, 8th Sept. 2015

Comments

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6

Jaitley plans to cut MSME tax rate to 25%

Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem

Don't forget to verify your income tax return in August: Here's the process

  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s