FAQs on Guidelines for Compounding of Offences
Frequently Asked Questions (FAQs) on Guidelines for Compounding of Offences under the Income-Tax Act, 1961 dated 17.10.2024
CBDT issued revised guidelines for Compounding of offences (‘guidelines’) under the Income-tax Act, 1961 (the ‘Act’) on 17.10.2024. The revised guidelines superseded all existing guidelines on the subject and are applicable to pending as well as new applications, from the date of their issuance.
- The revised guidelines have been simplified from previous guidelines, inter-alia, by eliminating categorization of offences, removing the limit on number of occasions for filing applications, allowing fresh application upon curing of defects, which was not permissible under earlier guidelines, allowing compounding of offences under section 275A and 276B of the Act, removing the existing time limit for filing application viz 36 months from the date of filing of complaint, etc.
- For better awareness and understanding among the stakeholders with respect to the revised guidelines dated 17.10.2024, clarifications are provided by issue of a Circular in the form of answers to the frequently asked questions (FAQs) as follows:
A. Compounding of offence
Q.1 What is compounding of offence?
Ans: Compounding of an offence is a mechanism whereby the defaulter is reprieved of major legal consequences by affording him an opportunity to pay certain sum of money to escape prosecution. The specified offences can be compounded by the competent authority either before or after the initiation of proceedings.
Q.2 Whether compounding of an offence constitute as an admission of an offence by the applicant?
Ans: No, compounding is intended to resolve the offence(s) and it is not to be construed as an admission of such offence(s) by the applicant. (Ref: para 9.11 of the guidelines)
Q.3 Are there any offence(s) under Income Tax Act which are not compoundable?
Ans: No, all offence under Income Tax Act have been made compoundable in revised guidelines dated 17.10.2024.
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