Tax offences, failure to pay TDS up to Rs 25 lakh not be prosecuted by taxman


New Delhi: Instances of wilful attempt
to evade
to furnish return of income and not remitting
TDS in the government exchequer
to the limit of
Rs 25 lakh will not
be ordinarily filed for criminal prosecution before a court
by the
taxman, a latest CBDT circular said.

The directive is being seen as a major move
to cut down
tax litigation and will save a number of assessees from legal proceedings.

A September 9 CBDT circular accessed
by PTI said prosecution is a criminal proceeding based upon evidence gathered and the offence of
tax evasion has
be “proven beyond reasonable doubt”.


To ensure that only “deserving cases get
prosecuted“, the Central Board of Direct Taxes has laid down the new criteria, it said.

“Cases where non-payment of
tax deducted at source (
TDS) is
Rs 25 lakh 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.

“In case of exceptional instances like habitual defaulters, based on particular facts and circumstances of each case, prosecution may
be initiated only with the previous approval of the collegium of two Chief Commissioners or Directors General of Income-
tax department,” it said.

These instances are dealt under section 276B of the I-T Act.

Cases of “wilful” attempt
to evade case, where the amount sought
to evaded or
tax on under-reported income is
Rs 25 lakh or below, shall not
be processed for prosecution except with the previous administrative approval of collegium of two Chief Commissioners or Directors General of the
tax department, the CBDT said.

These instances are
prosecuted under section 276C(1) of the I-T Act.

Similarly, cases where the amount of
tax, which would have been evaded if the
failure had not been discovered, is
Rs 25 lakh or below shall not
be processed for prosecution except with the previous administrative approval of the collegium of senior officers, it said.

These instances of
to furnish returns of income are
prosecuted under section 276CC of the I-T Act.

The CBDT that frames policy for the I-T department said the circular shall “come into effect immediately and shall apply
to all the pending cases where complaint is yet
be filed”.

Prosecution in other
offences like
to afford necessary facility
to authorised officer
to inspect books of account; removal, concealment, transfer or delivery of property
to thwart
tax recovery; false statement in verification or delivery of false account or statement and abetment of false return, account, statement or declaration relating
to any income or fringe benefits chargeable
tax, will also
be conducted as per the new directive, it said.

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