ITR
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Compounding lets you close a prosecutable offence by paying compounding charges, with the department's approval. CBDT issued revised guidelines on 17 October 2024. They removed the old 36 month limit, so an application can be made even after a complaint is filed.
CBDT Guidelines for Compounding of Offences, 17 October 2024; Sec 279, Income-tax Act 1961; Sec 276CC (now Sec 479)
Under Sec 279 of the 1961 Act, offences can be compounded by the competent authority, and the 2024 guidelines simplified the process and the charges. Before applying, file all pending returns and pay the tax, interest and penalties due. The application goes to the competent authority named in the guidelines, with details of the offence and payments. Once compounded, the prosecution ends.
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