I filed my return late. When is the 276CC offence committed, and is it still a first offence?
The offence is committed on the day immediately following the s.139(1) due date, not on the day you eventually file. Both defaults here therefore preceded the first show-cause notice, both qualified as a 'first offence' under the 2014 compounding guidelines, and compounding could not be refused on that ground.
Decided by the Supreme Court (Supreme Court of India (J.B. Pardiwala and Sanjay Karol, JJ.)) on 2025-02-07, reported as [2025] 171 taxmann.com 268 (SC)/[2025] 303 Taxman 415 (SC)/[2025] 473 ITR 394 (SC); 2025 INSC 155; Civil Appeal No. 1977 of 2025. It bears on section 276CC, section 279(2), section 139(1), section 139(4) of the Income Tax Act 1961, in Prosecution matters.
It cuts both ways. Because the offence crystallises the day after the due date, filing a belated return under s.139(4) does not prevent it — the Court read 'in due time' as referring only to the s.139(1) period. But the same reasoning means a later year whose due date passed before the first show-cause notice is not a 'second offence' for compounding. The Court also read the guidelines as preserving discretion to compound in deserving cases despite the general restrictions.
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The appellant, an individual with salary and partnership income, filed belated returns for AY 2011-12 and AY 2013-14 on 04.03.2013 and 29.11.2014, both after the section 139(1) due dates. Show-cause notices under section 276CC were issued for the two years on 27.10.2014 and 12.03.2015. His compounding application for AY 2011-12 was accepted, but the Chief Commissioner rejected the application for AY 2013-14 on the footing that an offence committed after the first show-cause notice was a second offence and therefore outside the 'first offence' limb of the 2014 compounding guidelines. The Gujarat High Court upheld that rejection on 21.03.2017. The appeal to the Supreme Court raised when the s.276CC offence is committed and whether the AY 2013-14 default qualified as a first offence.
The offence under section 276CC is committed on the day immediately following the due date prescribed under section 139(1), and the date on which the belated return is actually filed does not affect that. Both defaults - 1 October 2011 for assessment year 2011-12 and 1 November 2013 for assessment year 2013-14 - therefore preceded the first show cause notice of 27 October 2014, so the assessment year 2013-14 offence was a 'first offence' under Paragraph 8 of the 2014 compounding guidelines and the application could not be rejected on that ground alone. But the Court did not order compounding. It set aside the High Court's order and the Chief Commissioner's rejection of 14 February 2017, and directed the appellant to file a fresh compounding application within two weeks, to be decided by the competent authority within four weeks having regard to his conduct, the nature of the offence and the circumstances. The trial was stayed meanwhile; if the fresh application is allowed the prosecution abates, and if it is rejected the trial continues to its conclusion.
On when the offence is committed, the Court applied Prakash Nath Khanna v. CIT, which confines 'in due time' in section 276CC to the period in section 139(1) and not the extended window in section 139(4) (paras 34, 44). It read section 139(8) as pointing the same way: interest runs from the day immediately following the specified date whether or not a return is later filed (paras 37-38). Accepting the Revenue's construction would make the offence contingent on the assessee's own belated filing, which could not have been the legislative intention (para 39). On compounding, Paragraph 8 of the 2014 guidelines defines 'first offence' in two ways - an offence committed before formal intimation of liability to prosecution, or an offence not detected by the Department but voluntarily disclosed before the compounding application - and the Court read the two limbs as alternatives (paras 67, 72). It rejected the argument that merely filing a belated return is itself the voluntary disclosure contemplated by the second limb (paras 71-72). It then read Paragraph 8 with Paragraph 4, under which compounding is never a matter of right and discretion is guided by the conduct of the applicant and the nature and magnitude of the offence, and with Paragraph 9, which lets the restrictions be relaxed in a deserving case; so Paragraph 8 states restrictions generally to be followed, not an absolute bar (paras 78-79). It noted, without resting on it, that the 2019 and 2022 guidelines reclassified section 276CC as a Category A offence compoundable up to three times, showing a shift towards a more flexible regime (para 80). It also noted the settled position that section 279(2) is enabling and gives no right to demand compounding (Banwari Lal Agarwal, para 51) and that the Board's instructions bind the Commissioner's discretion under it (Y.P. Chawla, para 52).
the point in time when the offence under Section 276CC could be said to be committed is the day immediately following the due date prescribed for filing of return of income under Section 139(1) of the Act, and the actual date of filing of the return of income at a belated stage would not affect in any manner the determination of the date on which the offence under Section 276CC of the Act was committed
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Handle my notice → Ask a CA on WhatsAppThe offence is committed on the day immediately following the s.139(1) due date, not on the day you eventually file. Both defaults here therefore preceded the first show-cause notice, both qualified as a 'first offence' under the 2014 compounding guidelines, and compounding could not be refused on that ground. This was decided by the Supreme Court (Supreme Court of India (J.B. Pardiwala and Sanjay Karol, JJ.)) and bears on section 276CC, section 279(2), section 139(1), section 139(4) of the Income Tax Act 1961. It is reported as [2025] 171 taxmann.com 268 (SC)/[2025] 303 Taxman 415 (SC)/[2025] 473 ITR 394 (SC); 2025 INSC 155; Civil Appeal No. 1977 of 2025. It cuts both ways. Because the offence crystallises the day after the due date, filing a belated return under s.139(4) does not prevent it — the Court read 'in due time' as referring only to the s.139(1) period. But the same reasoning means a later year whose due date passed before the first show-cause notice is not a 'second offence' for compounding. The Court also read the guidelines as preserving discretion to compound in deserving cases despite the general restrictions. If it applies to you, the first step is this: Date the offence for each year from the day after the s.139(1) due date and check whether that date falls before or after the first show-cause notice.
The appellant, an individual with salary and partnership income, filed belated returns for AY 2011-12 and AY 2013-14 on 04.03.2013 and 29.11.2014, both after the section 139(1) due dates. Show-cause notices under section 276CC were issued for the two years on 27.10.2014 and 12.03.2015. His compounding application for AY 2011-12 was accepted, but the Chief Commissioner rejected the application for AY 2013-14 on the footing that an offence committed after the first show-cause notice was a second offence and therefore outside the 'first offence' limb of the 2014 compounding guidelines. The Gujarat High Court upheld that rejection on 21.03.2017. The appeal to the Supreme Court raised when the s.276CC offence is committed and whether the AY 2013-14 default qualified as a first offence. The matter was decided on 2025-02-07 by the Supreme Court (Supreme Court of India (J.B. Pardiwala and Sanjay Karol, JJ.)). On those facts the Supreme Court held as follows. The offence under section 276CC is committed on the day immediately following the due date prescribed under section 139(1), and the date on which the belated return is actually filed does not affect that. Both defaults - 1 October 2011 for assessment year 2011-12 and 1 November 2013 for assessment year 2013-14 - therefore preceded the first show cause notice of 27 October 2014, so the assessment year 2013-14 offence was a 'first offence' under Paragraph 8 of the 2014 compounding guidelines and the application could not be rejected on that ground alone. But the Court did not order compounding. It set aside the High Court's order and the Chief Commissioner's rejection of 14 February 2017, and directed the appellant to file a fresh compounding application within two weeks, to be decided by the competent authority within four weeks having regard to his conduct, the nature of the offence and the circumstances. The trial was stayed meanwhile; if the fresh application is allowed the prosecution abates, and if it is rejected the trial continues to its conclusion.
On when the offence is committed, the Court applied Prakash Nath Khanna v. CIT, which confines 'in due time' in section 276CC to the period in section 139(1) and not the extended window in section 139(4) (paras 34, 44). It read section 139(8) as pointing the same way: interest runs from the day immediately following the specified date whether or not a return is later filed (paras 37-38). Accepting the Revenue's construction would make the offence contingent on the assessee's own belated filing, which could not have been the legislative intention (para 39). On compounding, Paragraph 8 of the 2014 guidelines defines 'first offence' in two ways - an offence committed before formal intimation of liability to prosecution, or an offence not detected by the Department but voluntarily disclosed before the compounding application - and the Court read the two limbs as alternatives (paras 67, 72). It rejected the argument that merely filing a belated return is itself the voluntary disclosure contemplated by the second limb (paras 71-72). It then read Paragraph 8 with Paragraph 4, under which compounding is never a matter of right and discretion is guided by the conduct of the applicant and the nature and magnitude of the offence, and with Paragraph 9, which lets the restrictions be relaxed in a deserving case; so Paragraph 8 states restrictions generally to be followed, not an absolute bar (paras 78-79). It noted, without resting on it, that the 2019 and 2022 guidelines reclassified section 276CC as a Category A offence compoundable up to three times, showing a shift towards a more flexible regime (para 80). It also noted the settled position that section 279(2) is enabling and gives no right to demand compounding (Banwari Lal Agarwal, para 51) and that the Board's instructions bind the Commissioner's discretion under it (Y.P. Chawla, para 52). In the words reproduced by the source cited on this page: "the point in time when the offence under Section 276CC could be said to be committed is the day immediately following the due date prescribed for filing of return of income under Section 139(1) of the Act, and the actual date of filing of the return of income at a belated stage would not affect in any manner the determination of the date on which the offence under Section 276CC of the Act was committed" The decision followed or applied Prakash Nath Khanna v. CIT [2004] 135 Taxman 327/266 ITR 1 (SC) - 'in due time' in s.276CC means the s.139(1) period, not s.139(4); followed at para 44; Union of India v. Banwari Lal Agarwal (1998) 7 SCC 652 - s.279(2) is enabling and confers no right to compounding; Y.P. Chawla v. M.P. Tiwari [1992] 63 Taxman 538/195 ITR 607 (SC) - Board instructions bind the exercise of discretion under s.279(2).
It was decided by the Supreme Court on 2025-02-07 and is reported as [2025] 171 taxmann.com 268 (SC)/[2025] 303 Taxman 415 (SC)/[2025] 473 ITR 394 (SC); 2025 INSC 155; Civil Appeal No. 1977 of 2025. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 276CC, section 279(2), section 139(1), section 139(4), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The offence under section 276CC is committed on the day immediately following the due date prescribed under section 139(1), and the date on which the belated return is actually filed does not affect that. Both defaults - 1 October 2011 for assessment year 2011-12 and 1 November 2013 for assessment year 2013-14 - therefore preceded the first show cause notice of 27 October 2014, so the assessment year 2013-14 offence was a 'first offence' under Paragraph 8 of the 2014 compounding guidelines and the application could not be rejected on that ground alone. But the Court did not order compounding. It set aside the High Court's order and the Chief Commissioner's rejection of 14 February 2017, and directed the appellant to file a fresh compounding application within two weeks, to be decided by the competent authority within four weeks having regard to his conduct, the nature of the offence and the circumstances. The trial was stayed meanwhile; if the fresh application is allowed the prosecution abates, and if it is rejected the trial continues to its conclusion. It arises in Prosecution matters, on section 276CC, section 279(2), section 139(1), section 139(4) of the Income Tax Act 1961, and was decided by Supreme Court of India (J.B. Pardiwala and Sanjay Karol, JJ.). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where compounding was refused for a later year as a 'second offence', put the due dates and the notice date on record and ask for that rejection to be revisited. Do not describe a belated return as a voluntary disclosure — the Court held that saving the department the trouble of detection is what that limb contemplates. Check which set of compounding guidelines governs your application before relying on the 'first offence' analysis.
Still good law. Decided 07.02.2025 and not reported as doubted anywhere I could fetch. Important practical caveat: the Court construed the 2014 compounding guidelines. Those, and the 2008, 2019 and 2022 guidelines, have since been superseded by the CBDT's revised guidelines dated 17.10.2024, which abolish offence categorisation and the limit on the number of applications altogether — so the 'first offence' analysis matters mainly for applications governed by the older guidelines. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read the disposal carefully before citing this. The Court held only that the compounding application could not be rejected on the 'first offence' ground alone; it set aside the rejection and sent the appellant back to file a fresh application, to be decided on his conduct, the nature of the offence and the circumstances, with the trial stayed in the meantime and continuing if compounding is refused (paras 81-85). It also affirmed that compounding is not a matter of right: s.279(2) is enabling (Banwari Lal Agarwal) and the Board's instructions bind the Commissioner's discretion (Y.P. Chawla). The Gujarat High Court decision reversed is Vinubhai Mohanlal Dobaria v. Chief CIT [2017] 81 taxmann.com 60/247 Taxman 253 (Guj.), 21 March 2017. The Court was construing the 2014 compounding guidelines; those, and the 2008, 2019 and 2022 sets, have since been superseded by the CBDT's revised guidelines of 17 October 2024, so the 'first offence' analysis matters mainly for applications governed by the older guidelines. The holding on when the s.276CC offence is committed is unaffected. The judgment does not decide whether the appellant's fresh application should be allowed - that was left to the competent authority on the merits (para 83), and the record does not show what happened next. It does not decide what counts as a 'voluntary disclosure' under the second limb of Paragraph 8 beyond ruling out the bare filing of a belated return (paras 71-72). The Gujarat High Court order under appeal is reproduced in extract within the judgment rather than in full; its citation is [2017] 81 taxmann.com 60/247 Taxman 253 (Guj.). This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The offence under section 276CC is committed on the day immediately following the due date prescribed under section 139(1), and the date on which the belated return is actually filed does not affect that. Both defaults - 1 October 2011 for assessment year 2011-12 and 1 November 2013 for assessment year 2013-14 - therefore preceded the first show cause notice of 27 October 2014, so the assessment year 2013-14 offence was a 'first offence' under Paragraph 8 of the 2014 compounding guidelines and the application could not be rejected on that ground alone. But the Court did not order compounding. It set aside the High Court's order and the Chief Commissioner's rejection of 14 February 2017, and directed the appellant to file a fresh compounding application within two weeks, to be decided by the competent authority within four weeks having regard to his conduct, the nature of the offence and the circumstances. The trial was stayed meanwhile; if the fresh application is allowed the prosecution abates, and if it is rejected the trial continues to its conclusion.
TaxSphere, “Vinubhai Mohanlal Dobaria v CCIT”, https://taxnotice.vittsphere.com/caselaw/case/vinubhai-mohanlal-dobaria-v-ccit-276cc/ (validity last checked 2026-08-25)
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