NEW INCOME TAX GUIDELINES: Tax rules made stricter from June 17; paying penalty alone will not do, say tax officials

NEWS INCOME TAX

NEW DELHI:  Revised guidelines for payment of Income Tax came into force from Monday. The guidelines issued by the Income Tax Department made serious offences under black money and benami laws as “generally” non-compoundable. In other words, an individual or organisation would no more will be able to settle a case of tax evasion by only paying the tax, penalty and interest, as is done so far.
Listing 13 cases, where the offences are not to be generally compounded, and also grouping the offences in two parts, the Central Board of Direct Taxes (CBDT) has directed its senior officers to circulate the revised guidelines for compliance by concerned authorities. Offences forming category ‘A’ include failure to pay tax deducted at source under Chapter XVII-B or tax payable under Section 115-0. Failure to pay the tax collected at source also falls under this category.
The category ‘B’ offences include wilful attempt to evade tax, failure to produce accounts and documents, and false statement in verification.

While the first category offences are open to compounding, offences such as willful evasion of tax and removal or concealment or transfer or delivery of property to thwart tax recovery in a search operation are not to be compounded. “Offences under Sections 275A, 275B and 276 of the Act will not be compounded,” state the new guidelines that supersedes the one issued in 2014.
The guidelines state that a category ‘A’ offence on more than three occasions would not be generally compounded. Any offence which has a bearing on any offence under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 would not be generally compounded. Any offence which has bearing on any offence under the Benami Transactions (Prohibition) Act, 1988 would not merit compounding by tax authorities.
The CBDT guidelines said that offences committed by a person which, as per the information available with the Principal Chief Commissioner of Income Tax and other officials concerned, have a bearing on a case under investigation (at any stage including enquiry, filing of FIR/complaint) by the Enforcement Directorate, CBI, Lokpal, Lokayukta or any other Central or state agency are also not to be normally compounded. “Notwithstanding anything contained in these guidelines, the Finance Minister may relax restrictions in Para 8.1 for compounding of an offence in a deserving case, on consideration of a report from the Board on the petition of an applicant,” said the tax body. –Agencies, IHN-NN
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