The Central Board of Direct Taxes ( CBDT ) has clarified that, application for compounding of offences filed before the competent authority on or before 31-12-2019 shall be deemed to be filed in time.
In a Circular issued by CBDT said that, With a view to mitigate unintended hardship to taxpayers in deserving cases, and to reduce the pendency of existing prosecution cases before the courts, the CBDT in exercise of powers u/s 119 of the Income Tax Act, 1961 read with explanation below sub-section (3) of section 279 of the Act, As a one-time measure, the condition that compounding application shall be filed within 12 months, is hereby relaxed, under the following conditions:
i) Such application shall be filed before the Competent Authority i.e. the Pr. CCIT/CCIT/Pr. DGIT/DGIT concerned, on or before 31.12.2019.
ii) Relaxation shall not be available in respect of an offence which is generally/normally not compoundable, in view of Para 8.1 of the Guidelines dated 14.06.2019.
The Circular also said that Applications filed before the Competent Authority, on or before 31.12.2019 shall be deemed to be in time in terms of para 7(ii) of the Guidelines dated 14.06.2019.
The Circular also clarified that Para 9.2 of the Guidelines dated 14.06.2019, shall not apply to all such applications made under this one-time measure. The other prescriptions of the Guidelines dated 14.06.2019 including the compounding procedure, compounding charges etc. shall apply to such applications.
For the purposes of this Circular, the application can be filed in all such cases where-
a) prosecution proceedings are pending before any court of law for more than 12 months, or
b) any compounding application for an offence filed previously was withdrawn by the applicant solely for the reason that such application was filed beyond 12 months, or
c) any compounding application for an offence had been rejected previously solely for technical reasons.
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