CBDT relaxes time for applying compounding offences

The Central Board of Direct Taxes through its circular dated 9th September 2019 has relaxed time for applying for compounding of income tax offences.

As per the Guidelines dated 14th June 2019, a compounding application is required to be filed within 12 months from the filing of complaint in the court. This circular has relaxed the time limit for filing such application beyond 12 months.

Taxpayers can file the compounding application before the competent authority i.e. Principal Chief Commissioner or Chief Commissioner or Director General of Income Tax on or before 31st December, 2019.

Compounding application can be filed in cases where:

  1. Prosecution proceedings are pending before any court of law for more than 12 months, or
  2. any compounding application for an offence filed previously was withdrawn by the applicant solely for the reason that such application was filed beyond 12 months, or 
  3. Any compounding application for an offence had been rejected previously solely for technical reasons.

The relaxation has been provided as a one-time measure. This relaxation shall not be available for an offence which is generally or normally not compoundable such as instances of serious tax evasion, financial crime, terror financing, money laundering, possession of illegal foreign assets, benami properties or where taxpayer has been convicted by a court in the past.

Click here to read the Circular.

Click here to read previous post on Compounding.