Prior sanction requirement bars prosecution without senior revenue approval; compounding of tax offences permitted by authorised revenue authorities.

The amendment requires prior sanction of the Chief Commissioner, Director General, or Commissioner before proceeding with prosecution under the Gift-tax Act, except where prosecution is at the instance of the Commissioner (Appeals). It also permits compounding: for offences where prosecution would lie at the instance of the Commissioner (Appeals), compounding may be done by the Board or a Chief Commissioner or Director General authorised by the Board; in other cases compounding may be done by the Chief Commissioner, Director General, or Commissioner.

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