Revised guidelines for compounding of offences under Direct Tax Laws.

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.... and removal of unintended hardship to assessees in deserving cases. 3. These revised guidelines are a major departure from the guidelines dated 11-03-80 in certain vital aspects. The new guidelines have revived the concept of technical and substantive (or non-technical) offences for the purpose of compounding of offences and a more liberal treatment has been given to the compounding of technical offences. Another point of distinction is that the restriction on compounding of offences, committed by monopoly or large industrial houses or a Director belonging to such house has been removed. In order to expedite the disposal of compounding petitions, the powers to compound offences have been substantially delegated to the CCsIT/DGsIT, subje....

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....as become final, compounding charges shall be calculated on the basis of such revised order. For example, in a case where the offence is u/s 276B (prior to 1-4-89) and the assessee is in appeal regarding the quantum and period of default of TDS, for the limited purpose of making reference to the Board, compounding charges shall be calculated on the basis of the order u/s 201 or the amount and period of default mentioned in the complaint. If the quantum or period of default has been reduced in appeal / revision etc. and such appellate order is under appeal, the compounding charges shall be calculated on the basis of original order / complaint. (c) For the purpose of these guidelines "amount in default" or "the amount involved in the....

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....offer of compounding. It may however be clarified in the show cause notice that the petition for compounding shall be decided on merits and in the absolute discretion of the CCIT/DGIT. 7. The cases where the CCIT/DGIT is not inclined to accede to the assessee's request despite the conditions prescribed in paragraphs 4 & 5 of the guidelines being satisfied, may be referred to the Board before rejection of the compounding petitions. 8. Adequate publicity may be given to these guidelines so that a large number of cases covered by the guidelines is compounded, resulting in reduction in the number of cases pending in courts. All the applications for compounding of offences must be disposed of or referred to the Board, as the case may b....