Lok Sabha Question No. 3354 (UNSTARRED), answered on 2024-12-16
Subject: Decriminalization of Minor Offences in Direct Taxes
Ministry: FINANCE
Asked by: Dr. Bhola Singh

- (a) Yes, Sir.
- (b) The  Income-tax  Act,  1961  ('the  Act')  has  been  amended  to  decriminalise  Section  276A (entailing imprisonment of minimum six months extending up to two years) relating to failure of liquidator to give notice of his appointment to the Jurisdictional Assessing Officer within 30 days or failure to set aside notified amount from, or part with, any of the assets of company under  liquidation.  The  Finance  Act,  2023,  with  effect  from  01.04.2023,  has  introduced  a sunset clause in section 276A of the Act, which prescribes that no fresh proceedings shall be initiated under section 276A on or after 01.04.2023.

Under clause (a) of section 276B of the Act, a deductor was liable to be prosecuted if payment of Tax Deducted at Source (TDS) to the credit of the Central government was made beyond the prescribed due date. The provision has now been amended by Finance Act (No. 2), 2024 with effect from 01.10.2024, which prohibits prosecution proceedings against the deductor, if the TDS deducted is paid to the government's credit, on or before the due date prescribed for filing of the TDS statement for relevant quarter.

Further,  CBDT  has  issued  revised  guidelines  for  compounding  of  offences  under  section 279(2) of the Act on 17.10.2024, wherein several simplification measures have been taken which,  inter-alia,  include  making  offences  under  section  275A  and  275B  of  the  Act compoundable, removing limitations on occasions and time to file compounding applications, abolishing  interest  chargeable  on  delayed  payment  of  compounding  charges,  reducing compounding charges for various offences, removing separate compounding charge from coaccused, etc.

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA

## UNSTARRED QUESTION NO- 3354

TO BE ANSWERED ON MONDAY, DECEMBER 16, 2024/AGRAHYANA 25, 1946

## DECRIMINALIZATION OF MINOR OFFENCES IN DIRECT TAXES

## 3354. Dr. Bhola Singh:

Will the Minister of FINANCE be pleased to state:

- (a) whether the  Government  has  taken  measures  for  decriminalization  of  minor  offences  in direct tax matters to facilitate ease of doing business, particularly for medium and small businesses;
- (b) if so, the list of recent initiatives taken by the tax administration in this regard; and
- (c) the measures undertaken by the Government to improve litigation management in direct tax matters?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (c) The  Government  has  undertaken  several  measures  to  improve  litigation  management  in direct tax matters which, inter-alia, include:
- i. Creation  of  100  new  posts  of  Joint  Commissioner  (Appeals),  which  are  currently fully operational.
- ii. Notification  of  e-Dispute  Resolution  Scheme,  2022  (e-DRS)  by  CBDT,  to  enable delivery of quick and effective dispute resolution to small taxpayers.
- iii. Upward revision of monetary limits for filing appeals before the ITAT, High Court and Supreme Court to Rs. 60 lakh, Rs.2 crore and Rs.5 crore respectively.
- iv. Administrative  measures  by  CBDT such  as  identification  of  old  and  high  demand appeals  for  early  disposal,  augmentation  of  manpower  through  assignment  of additional charges, etc.
- v. Notification of Vivad se Vishwas Scheme, 2024 to reduce litigation and develop trust amongst tax payers.
- vi. Empowering Commissioner (Appeals) to set aside ex-parte assessment orders, vide Finance Act (No. 2), 2024.

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