CBDT has issued following instructions to its officers for compounding of Offences under Income Tax Act, 1961/Wealth tax Act, 1957 in cases of persons holding undisclosed foreign bank accounts/assets:
(i) Such cases can be compounded only after filing the Prosecution complaint(s) and shall not be compounded at the stage of show cause notice and/or without filing the complaint in the court.
(ii) The cases in which the assessee has not admitted the foreign bank account(s)/assets and/or has not cooperated with the Department in the assessment, penalty & recovery proceedings shall not be compounded.
(iii) The cases in which the assessee has admitted accounts/assets either fully (all accounts with which he is associated) or partially (only a few accounts out of all accounts with which he is associated), paid taxes and penalty and cooperated with the Department may be considered for compounding as per the guidelines dated 23.12.2014, only after filing the complaints.