TMI BlogRevised guidelines for compounding of offences.X X X X Extracts X X X X X X X X Extracts X X X X ..... ited purpose of compounding of the offences. 2.2 Offences punishable under the following sections showed be treated as technical offences:- Sections (i) 275 (prior to 1.4.75 - failure to make payment or deliver returns or statements or allow inspection) (ii) 276B (prior to 1.4.89 - failure to deduct or pay tax) (iii) 276B (w.e.f. 1.4.89 - failure to pay tax deducted at source) (iv) 276BB (failure to pay the tax collected at source) (v) 276DD (failure to comply with the provisions of section 269SS) (vi) 276E (failure to comply with the provisions of section 269-I) 2.3 Offences punishable under the following sections shall be treated as non-technical or substantive offences:- Sections i) 275A (contravention of order made u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as interest and penalties relating to the default. 4.3 The assessee should state that he is willing to pay the compounding fee prescribed in para 9 below, and the prosecution establishment expenses prescribed in para 10 below. The order compounding an offence should be passed only when the compounding charges comprising of the composition fee and establishment expenses are paid by the assessee/defaulter. 4.4 Technical offences may be compounded by CCIT or DGIT (as the case may be) if the following conditions are satisfied cumulatively:- (i) it is the first offence by an assessee. (ii) the compounding charges do not exceed Rs. 10 lakhs. (iii) the offence is compounded only before the filing of complaint. In the case of offenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dependent upon the income or tax etc. determined in the assessment order or any other order which is subject matter of appeal, revision, reference etc., the compounding charges shall be calculated on the basis of the assessment order or such other order. It may be clarified that compounding charges payable--------------- 5. Compounding of substantive/non-technical offences:- ------------------------------------------------- Following conditions must be cumulatively satisfied before compounding a substantive offence. (i) the conditions prescribed in para 4.1, 4.2, 4.3, are satisfied, (ii) it is first substantive offence. (iii) the prior approval of the Board is obtained. If the amount involved in the offence exceed Rs. 1 lakh, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction. The composition fee would be an amount of Rs. 2/- for every day during which the default continues. 9.2 Section 276B:- Failure to deduct or pay tax (prior to 1.4.89). 10% per month or part of a month of the amount in default where the said amount exceeds one lac and 5% per month or part of a month of the amount in default in other cases. Section 276B:- Failure to pay the tax deducted at source (w.e.f. 1.4.89) 5% per month or part of a month of the amount of tax in default. Section 276DD. Failure to pay the tax collected at source. The same guidelines as in respect of Section 276B in Para 9.3 above shall be applicable for an offence under this section also. 9.5 Section 276D(1):- Wilful attempt to evade tax etc. (a) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x is paid by the assessee u/s 143A or otherwise: (i) Compounding fee shall be calculated in the manner prescribed in para 9.7.1 above, upto the date on which the tax is so paid and (ii) thereafter the fee shall be calculated at the aforesaid rate on the amount of tax determined on regular assessment as reduced by the TDS, advance tax and tax paid u/s 140A or otherwise before filing the return of income or where no return was furnished, the date of completion of assessment. 9.8 Section 276DD:- Failure to comply with the provisions of section 269SS) (prior to 02-04-89) A sum equal to 50% of the amount of any loan or deposit accepted in contravention of the provisions of section 269SS. 9.9 Section 276E:- Failure to comply with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to future as well as pending cases. However the offences already compounded under the old guidelines shall not be reconsidered. 12. In a case where prosecution has not been filed, no order for compounding of offence need be passed, if as per guidelines issued vide F.No. 285/160/90-IT(Inv.) dated 7.2.1991, the smallness of the default does not call for launching of prosecution. However in such cases levy of interest and penalties prescribed under the Direct Taxes Acts must be considered on merits. 13. These guidelines shall apply mutatis mutandis to offences under the other Direct tax Laws also. These guidelines may be brought to the notice of all concerned. F.No. 285/161/90-IT(INV.) - Circular - Trade Notice - Public Notice - I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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