Prosecution for Offences
The income-tax authorities can initiate prosecution for offences specified under various sections. Imprisonment and fines vary depending on the nature of the offence.
Key Offences and Punishments
|
Section |
Description |
Period of Imprisonment |
|
275A |
Contravention of the order restricting the handling of seized assets |
Up to 2 years (and fine) |
|
275B |
Non-compliance with search and seizure provisions |
Up to 2 years (and fine) |
|
276 |
Concealment or transfer of property to prevent tax recovery |
Up to 2 years (and fine) |
|
276B |
Failure to pay TDS, dividend distribution tax, or ensure tax payment on income in kind under Sections 194B, 194BA, 194R, and 194S |
3 months to 7 years (and fine) |
|
276BB |
Failure to pay TCS |
3 months to 7 years (and fine) |
|
276C(1) |
Wilful attempt to evade tax or under-report income |
3 months to 7 years (and fine) |
|
276C(2) |
Wilful attempt to evade payment of tax, penalty or interest |
3 months to 2 years (and fine) |
|
276CC |
Failure to furnish return under Section 139(1) or notice |
3 months to 7 years (and fine) |
|
276CCC |
Non-filing of return post-search/requisition on or after 01-09-2024 |
3 months to 3 years (and fine) |
|
276D |
Failure to produce accounts or comply with Section 142(2A) |
Up to 1 year (and fine) |
|
277 |
False statements in verification or accounts |
3 months to 7 years (and fine) |
|
277A |
False entries or statements in accounts |
3 months to 2 years (and fine) |
|
278 |
Abetment of tax evasion |
3 months to 7 years (and fine) |
|
278A |
Enhanced punishment for repeat offences |
6 months to 7 years (and fine) |
|
280 |
Unauthorized disclosure by a public servant |
Up to 6 months (and fine) |
Offences by Companies [Section 278B]
Where a company has committed an offence, both the company and the responsible persons are liable for prosecution. Companies face fines, while individuals will also face punishment under applicable provisions. A person won’t be punished if they prove that the offence happened without their knowledge or despite all due diligence on their part. The expression ‘company’ includes a firm and an association of persons (AOP) or body of individuals (BOI), whether incorporated or not.
Immunity from prosecution may be granted by the Principal Commissioner/Commissioner, but it will be withdrawn if the assessee fails to meet the required conditions and according to CBDT guidelines, the offence under this provision is compoundable.
Offence by Hindu Undivided Family [Section 278C]
The Karta of an HUF is deemed guilty of offences committed by the HUF. However, the Karta shall not be punished if he proves that the offence was committed without his knowledge or despite exercising all due diligence to prevent it.
If it is proved that the offence was committed with the consent, connivance, or due to neglect of any member of the HUF, such member shall also be deemed to be guilty and shall be liable for prosecution and punishment.
Immunity from prosecution may be granted by the Principal Commissioner/Commissioner, but it will be withdrawn if the assessee fails to meet the required conditions and according to CBDT guidelines, the offence under this provision is compoundable.
Disclosure by Public Servants
Public servants are restricted from disclosing specified information as per section 138(2) except under legal obligation. Violations attract prosecution under Section 280.
Immunity from prosecution may be granted by the Principal Commissioner/Commissioner, but it will be withdrawn if the assessee fails to meet the required conditions.
Relaxation from Prosecution
No punishment shall be imposed for failure under Sections 276A, 276AB, 276B, or 276BB if reasonable cause is proven.
Presumptions in Prosecution
- Section 278D:Where money, bullion, jewellery or other valuable articles or any books of account or documents are found during a search, the following presumptions may be made by the income-tax authorities:
Such assets or documents belong to the person from whose possession or control they are found;
The contents of the books of account or documents are true;
The signatures and handwriting in the documents are presumed to be of the person they appear to belong to;
Stamped, executed, or attested documents are presumed to have been duly completed by the person who appears to have done so.
- Section 278E:Presumption of culpable mental state applies by the Court unless proven otherwise by the accused.
Approval for Prosecution [Section 279]
Prosecution cannot be initiated without prior approval of the Principal Commissioner/Commissioner, Joint Commissioner (Appeals), or Commissioner (Appeals), as applicable. Directions or instructions may also be issued by the Principal Chief Commissioner, Chief Commissioner, Principal Director General, or Director General.
Compounding of Offence
An offence may be compounded by the Principal CC/CC or Principal DG/DG, either before or after proceedings are initiated.