Indulgence in serious criminal cases of money laundering, terror
financing, corruption, possession of benami properties and undisclosed
foreign assets will virtually shut a person's chances of getting relief
in an income tax evasion offence beginning Monday, a latest directive
issued by the CBDT
said. The policy-making body for the tax department
has issued a revised 32-page guideline for 'compounding of offences
under direct tax laws, 2019' which will be executed under the I-T Act,
1961.
The new directives make it clear that compounding of
offences is "not a matter of right" and the department can extend such a
relief only in certain cases keeping in view factors like "conduct of
the person, the nature and magnitude of the offence on the context of
the facts and circumstances of each case".
Compounding in I-T
parlance means that the taxman does not file a prosecution case against
the offender or tax evader in the court in lieu of payment of due taxes
and surcharges and it is dealt under section 279(2).
The fresh
guidelines state certain offences will "generally not be compounded" if
the person has been found involved "in any manner, in an anti-national
or terrorist activity" or is being investigated by the Enforcement
Directorate (for offences under the Prevention of Money Laundering Act,
CBI (IPC and Prevention of Corruption Act), Lokpal, Lokayukta or any
other central or state agency like the local police.
Offences
committed by a person for which he/she was convicted by a court of law
under direct taxes laws, cases of a person as main accused where it was
proved that he has enabled others in tax evasion through entities used
to launder money or generate bogus invoices of sale/purchase without
actual business or by providing accommodation entries in any other
manner will largely be not compounded, the new guidelines said.
Similarly,
any offence which has bearing on an offence relating to un-dislcosed
foreign bank account or assets in any manner, any offence under the
anti-black money law of 2015, the anti-Benami Act of 1988 will also fall
under the no compounding category, it said.
A senior department
official said the new guidelines are aimed to streamline the action
against serious cases of black money and criminal tax evasion.
Also,
offences booked under sections 275A and 275B of the I-T Act (deals with
failure to comply with search and seizure action) and 276 (removal,
concealment, transfer or delivery of property to thwart tax recovery)
"will not be compounded" including under sections 276C (wilful attempt
to evade tax), 277A (falsification of books of account or documents
among others).
Any other offence, which the competent authority
considers not fit for compounding "in view of factors such as conduct of
the person, nature and magnitude of the offence" will also not be
compounded, it said.
Also, cases in which the person seeking
compounding of an offence under the I-T Act was convicted by a court for
two years or more will fall under the no compounding category, it said.
It
adds that the Union Finance Minister will be sole authority to relax
these guidelines in a "deserving case" after obtaining a report from the
Central Board of Direct Taxes (CBDT).
The exhaustive guidelines
inform the I-T officials in detail about the relaxation of time,
competent authority for compounding offences, procedure and charges
among other processes for compounding.