a. Whether an offence under Section 276CC of the Income Tax Act, 1961 could be said to have been committed on the actual date of filing of return of income or on the day immediately after the due date for filing of returns as per Section 139(1) of the Act?

b. What is the meaning of the expression “first offence” appearing in Clause 8 of the 2014 guidelines?

c. What amounts to voluntary disclosure for the purpose of Clause 8 of the 2014 guidelines?

d. Whether the 2014 guidelines are mandatory or directory in nature?

HELD:

(i) Voluntary disclosure for the purpose of Paragraph 8 of the 2014 guidelines has to be construed in a manner which ensures that such disclosure on part of the assessee saves the Department from the trials and tribulations of having to detect the commission of offence by the assessee by setting into motion its own machinery of detection of offences. Neither the filing of belated return of income by the assessee nor the making of an application for compounding of offence after a show cause notice has already been issued to the assessee fulfills this underlying idea of saving the Department from the inconvenience of detecting the offence. Even after a belated return of income is filed, the Department is still required to process the return, identify the cases wherein offences have been committed, issue show cause notices to the defaulting assessees and thereafter prosecute the offenders to recover the dues and punish the offenders. A voluntary disclosure by the assessee before the stage of detection by the Department besides being economically viable also saves time and efforts on part of the Department and also ensures that the dues are recovered promptly.

(ii) The primary purpose of the prosecution provisions enshrined in Chapter XXII of the Act is to ensure the penalization of offenders adjudged guilty of tax evasion and other tax-related offenses, while simultaneously instilling a deterring effect in the minds of those who might contemplate circumventing the payment of lawful taxes. When an assessee voluntarily discloses the commission of an offence, he cannot be said to have the intention of evading payment of taxes.