Is the income tax department in India lax on filing for prosecution and disposal of compounding applications? Sushil Chandra, chairman, Central Board of Direct Taxes (CBDT) has shot off a letter to all the senior tax commissioners across the country stating that the work relating to filing of prosecution complaints and disposal of compounding applications “is not upto the mark”.

Compoundable offences are those offences that can be conciliated by the parties between themselves.

According to Chandra, the prosecution proceedings can be successfully initiated in several cases of entry operators including those concerning bogus long term capital gains tax (LTCG) claims mainly related to stock and property market, cases rejected by Settlement Commission etc. The CBDT chairman has directed officers to put in their best and expedite filing of prosecution complaints and disposal of compounding applications.

“Prosecution and compounding are important areas against tax evaders and non-compliant assesses and cannot be allowed to be as we are in the last month of the current financial year,” the letter said. “I also note that the figures of prosecution are not being compiled from all the charges within your region and reported to the Board. Complete & correct reports in this regard should be submitted to the Board after taking into account data from all charges including Investigation Directorate, Central, TDS, LTU, International Taxation, etc,” Chandra said in the letter.