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CBDT Guidelines For Compounding Of Offences Under Direct Tax Laws

The CBDT has issued a letter dated 23.12.2014 setting out the guidelines for compounding of offences under Direct Tax Laws. The guidelines shall come into effect from 01.01.2015 and shall be applicable to all applications for compounding received on or after the aforesaid date. The Guidelines classify offences into two parts and set out the criteria for compounding of offences under each category. The procedure to be adopted for making the compounding application and the manner in which they should be dealt with is also explained in detail.


2 comments on “CBDT Guidelines For Compounding Of Offences Under Direct Tax Laws
  1. M L GUPTA says:

    Even before issue of this circular, IN Faridabad Large number of Tax Deductors have received notice for Penalty u/s 221(1) and 276 B for Financial years 2008-09 onward for nominal late payment of TDS for which interest u/s 201(1A) was paid before filing of TDS returns.

    God alone how this brain wave of penalising TAX Deductors has come and where it will end

  2. there are a lot of lacunae in the circular. it would promote a lot of corruption. if that is the idea government promotes such great ideas of compounding, then every aspect is questionable under constitution Art 265 and the very compounding can be questionable under constitutional law.

    if government wants moneys it can do by requesting tax payers those who can afford to some fixed deposits with income tax department in its bank account at RBI by paying normal bank rate of interest.why should tax payer lock up his funds without interest, as tax payer is a sovereign citizen of india while Art 12 institution is a defacto entity,and the Art 12 departments/bodies cannot get a level of parliament as parliament is an elected representatives, but executive are just some public servants to the people as their relation is like master and servant, we need nt be simply carried away big designations conferred on these public servants.

    So the executive is subject to Wednesbury principles of unreasonableness as they behave arbitrary.

    All Art 12 institutions can never be equal to the other under any principle of equity, some Art 12 institutions unless it is some elected by people, authorities..like parliament and legislatures though elected representatives are accountable to citizens while executives do not account anything to citizen in any way , unless by a prescribed code or a statute, and several times executive just behave very authoritatively while in fact their authority on several occasions are just unreasonable,while MLA/MP in his relevant constituency is questioned by citizens.

    so in short, i do not think even genuine problems are compounded by governance failures of the very government, as government is no real boss of citizens, if permitted then it will create worst dictators over the people-electors!

    so better the government rethink on the said circular and it would be better to reassess he facts that could emerge;people always need to question every circular of any executive department, like parliament does on the government ministers, else conducive conditions of life could be possible… as all citizens are equal there is nothing called rich and poor or powerless and powerful that is the basic principle of democracy of by people to people and for people.

    this is only corrective perception on the great circulars under subordinate legislation the executive issues such ind of circulars..people shd ensure that they are not meaninglessly over powered is the principle part of this thought .

5 Pings/Trackbacks for "CBDT Guidelines For Compounding Of Offences Under Direct Tax Laws"
  1. […] has been primarily raised to the legality of the quantum of compounding fee, as prescribed by guidelines issued by the Central Board of Direct Taxes (for short, ‘CBDT’) dated 23rd December, … and seeks quashing of the same as being arbitrary and unfair. The petitioner further seeks setting […]

  2. […] S. 279(2) empowers the Chief Commissioner or Director General to compound an offence under the Act, either before or after the initiation of proceedings. The Department has issued new set of guidelines for compounding of offences under direct taxes vide notification F.No. 185/35/2013 IT (Inv.V)/108 dated December 23, 2014 (2015) 371 ITR 7 (St) (www.itatonline.org). […]

  3. […] The circular dated 23rd December, 2014 does not stipulate a limitation period for filing the application for compounding. What the said […]

  4. […] directors can be saved from attending to the Court proceedings for decades. CBDT has prescribed the guidelines for compounding of offences under Direct Tax Laws {Guidelines dated 23-12-2014 [2015] 371…}. However, the compounding fee fixed by the CBDT is very exorbitant. It may be desirable to fix a […]

  5. […] Download Standard Operating Procedure For Prosecution In Cases Of TDS/ TCS Default Note: This has to be read with the CBDT Guidelines For Compounding Of Offences Under Direct Tax Laws […]

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