Prosecution for failure to furnish return of income [Section 276CC]
- Nature of Default
Prosecution may be initiated if a person fails to furnish return of income:
Under section 139(1);
In response to a notice under section 142(1)(i);
In response to a notice under section 148 for reassessment;
In response to a notice under section 153A in case of search.
- Such offence is non-cognizable undersection 279A, i.e., police cannot act without court’s prior permission.
Exception
No prosecution shall be launched for failure to furnish return under section 139(1) if:
The return is filed before the end of the assessment year, or an updated return is filed within 48 months from the end of the relevant assessment year.
The tax payable (excluding company cases), after adjusting advance tax, self-assessment tax, and TDS/TCS, does not exceed Rs. 10,000.
As per CBDT Circular No. 24/2019, dated 09.09.2019, if the amount of tax sought to be evaded is Rs. 25 lakh or less, prosecution requires prior approval of a collegium of two CCIT/DGIT rank officers.
- Period of Imprisonment
o Where the tax sought to be evaded exceeds Rs. 25 lakh: rigorous imprisonment of 6 months to 7 years and with fine;
o In other cases: rigorous imprisonment of 3 months to 2 years and with fine.
- Prosecution for Subsequent Offences
For second and subsequent offences, punishment is rigorous imprisonment of 6 months 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Immunity from prosecution may be granted by the Principal Commissioner/Commissioner, but it will be withdrawn if the assessee fails to meet the required conditions and according to CBDT guidelines, the offence under this provision is compoundable.