Background
In line with the recent assurances from the Finance Minister of
India regarding ending the tax harassment, the Central Board of
Direct Taxes (CBDT) which is the apex body for administration of
direct tax in India, has issued 2 circulars. These circulars are
reflective of the recent statements that 'penalty rather than
prosecution is the priority of the Government'.
Circular No. 24 of 2019, dated 9 September 2019 lays down the
criteria for selecting cases for initiating prosecution and No. 25
of 2019, dated 9 September 2019, CBDT has relaxed one pre-condition
of filing compounding.
New criteria for launching prosecution
With a view to ensure that minor default cases don't get
selected for prosecution, CBDT under Circular No. 24 of 2019 has
provided the following criteria for selection of cases of
initiating prosecution:
