Compoundable Offences under Direct Tax Laws | 15 Jun 2019

The Central Board of Direct Taxes (CBDT) has issued the guidelines for compoundable offences under Direct Tax Laws, 2019.

• Compoundable offences are those which can be conciliated by the parties under dispute, without the requirement of the permission of the court.

Guidelines

Guidelines have classified offences into three categories.

• The first category of offences open to compounding include:
  
  • Defaults under tax deducted or collected at source.
  • Failure to file return.
• The second category of offences, for which compounding will not be allowed, deal with:
  
  • Willful evasion of tax.
  • Removal or concealment or transfer or delivery of property to thwart tax recovery in a search operation.
• The third category of offences that "shall normally not be compounded" includes:
  
  • Offences committed by a person for which he was convicted by a court of law under direct tax laws.
  • Enabling others to evade taxes.
  • Money laundering (launder money by generating bogus invoices).
  • Offences relating to undisclosed foreign bank account or assets under the Black Money (Undisclosed Foreign Income and Assets).
  • Imposition of Tax Act, 2015 or under the Benami Transactions (Prohibition) Act, 1988.