Prosecution for abetment to make a false return, etc. [Section 278]
- Nature of Default
Prosecution under this section arises when a person:
Abets or induces another to make and deliver a false account, statement, or declaration relating to taxable income, knowing it to be false or not believing it to be true; or
Abets or induces another to evade tax, penalty, or interest or to under-report income, as referred in Section 276C(1).
Prosecution under this provision is contingent upon the establishment of tax evasion by the other person.
- Period of Imprisonment
If the amount of tax, penalty, or interest that would have been evaded exceeds Rs. 25 lakh: Rigorous imprisonment of 6 months to 7 years and fine.
In other cases: Rigorous imprisonment of 3 months to 2 years and fine.
- Non-Cognizable Offence
As per Section 279A, the offence under Section 278 is non-cognizable, meaning police cannot initiate investigation or arrest without prior permission of the court.
- Subsequent Offences
On second and subsequent convictions under this section, the person shall be punishable with rigorous imprisonment of not less than 6 months, extendable up to 7 years, and with fine.
- Relaxation from Prosecution
Immunity from prosecution may be granted by the Principal Commissioner/Commissioner, but it will be withdrawn if the assessee fails to meet the required conditions and according to CBDT guidelines, the offence under this provision is compoundable.