Central Board of Direct Taxes (CBDT) has issued Circular No. 24/2019 to relax criteria for launching prosecution in respect of certain offences and to ensure that only deserving cases get prosecuted under Income Tax Act, 1961.
Procedure for identification and processing of cases for prosecution under Income Tax Act, 1961 are as below:
- For cases of Offences u/s 276B (i.e Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B )
In Cases where non-payment of tax deducted at source(TDS) is Rs. 25 Lakhs or below, and the delay in deposit is less than 60 days from the due date, shall not be processed for prosecution in normal circumstances. For exceptional cases like, habitual defaulters, based on particular facts and circumstances of each case, prosecution may be initiated only with the previous administrative approval of the collegium of two CCIT/DGIT rank officers.
- For cases of Offences u/s 276BB( i.e Failure to pay the tax collected at source )
Same approach as stated in Point 1 above.
- For cases of Offences u/s 276C(1)(i.e. Wilful attempt to evade tax, etc.)
Cases where the amount sought to be evaded or tax on under-reported income is Rs. 25 Lakhs or below, shall not be processed for prosecution except with the previous administrative approval of the Collegium of two CCIT/DGIT rank officers. Further, prosecution under this section shall be launched only after the confirmation of the order imposing penalty by the Income Tax Appellate Tribunal.
- For cases of Offences u/s 276CC (i.e. Failure to furnish returns of income)
Cases where the amount of tax, which would have been evaded if the failure had not been discovered, is Rs. 25 Lakhs or below, shall not be processed for prosecution except with the previous administrative approval of the Collegium of two CCIT/DGIT rank officers.
This Circular has come into force from 9th September, 2019 and shall apply to all the pending cases where complaint is yet to be filed.
For further details please refer the attached document.
Source: Central Board of Direct Taxes
