New Delhi: The revised guidelines issued by the Central Board of Direct Taxes (CBDT) on ‘Compounding of Offences under Direct Tax Laws, 2019’ have come into effect from today to tighten the screw on tax evaders.

The guidelines have made serious offences under black money and benami laws ‘generally’ non-compoundable.

According to these guidelines, any person or entity would not be able to settle a case of tax evasion just by paying the tax demand, penalty and interest.

The Board said that compounding is not a matter of right but it can be compounded only by a competent authority on the satisfaction of the eligibility conditions prescribed in these Guidelines.

Various factors will be considered for compounding offences such as the conduct of the person, the nature and magnitude of the offence in the context of the facts and circumstances of each case.

The offences have been divided into two categories namely Category ‘A’ and Category ‘B’.

Category ‘A’:

Offences under this category include failure to make the payment or deliver returns or statements or allow inspection,  failure to pay the tax deducted at source under Chapter XVII-B or tax payable under section 115 -0, failure to furnish Return of Income.

S.No.SectionDescription/Heading of section
i.276(Prior to 01/04/1976) – Failure to make payment or deliver returns or statements or allow inspection
ii.276B(Prior to 01/04/1989) – Failure to deduct or pay tax
iii276B(w.e.f. 01/04/1989 and up-to 30/5/1997)- Failure to pay tax deducted at source under Chapter XVII-B
iv276BFailure to pay tax deducted at source under chapter XVII-B or tax payable under section 115 -0 or 21d proviso the section 194B to the credit of the Central Government (w.e.f. 01/06/1997)
v.276BBFailure to pay the tax collected at source
vi.276CCFailure to furnish Return of Income
vii276CCCFailure to furnish returns of income in search cases in block assessment scheme
viii.276DD(Prior to 1.04.1989) – Failure to comply with the provisions of section 269SS
ix.276E(Prior to 1.04.1989) – Failure to comply with the provisions of section 269 T
x.277False statement in verification etc. with reference to
Category ‘A’ offences
xi.278Abetment of false return etc. with reference to Category ‘A’ offences

Category ‘B’:

This category includes willful attempt to evade tax, failure to produce accounts and documents, and false statement in verification, abetment of a false return with reference to category ‘B’ offences.

S.No.SectionDescription/Heading of section
i.276AFailure to comply with the provisions of section 178(1) and 178(3)
ii.276AA(prior to 01/10/1986)- Failure to comply with the provisions of section 269AB or section 269I.
iii.276ABFailure to comply with the provisions of sections 269UC, 269UE and 269UL
iv.276C(1)Willful attempt to evade tax, etc
v.276C(2)Willful attempt to evade payment of taxes, etc
vi.276DFailure to produce accounts and documents
vii277False statement in verification etc. with reference to
Category B’ offences
viii277AFalsification of books of account or documents, etc.
ix.278Abetment of false return, etc. with reference to Category ‘B’ offences

Any offence which has bearing on any offence under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and Benami Transactions (Prohibition) Act, 1988 would not be generally compounded, the revised guidelines said.