Tax offences, failure to pay tds up to rs 25 lakh not be prosecuted. Penalties and prosecutions under the incometax act, 1961 chapter xxi of the incometax act containing sections 270 to 275 provides for levy of penalties under the incometax act in respect of various defaults committed by an assessee such as, concealment of income. Section 278ab and 278b of income tax act 1961 power of principal commissioner or commissioner to grant immunity from prosecution and offences by companies are defined under section 278ab and 278b of income tax act 1961. Residential status as per the income tax act gst made easy. The mechanism for enforcing tax compliances under the incometax act, 1961 the act is provided by way of three pillars visavis imposition of interests, imposition of penalties, and prosecutions. Chapter xxii of the act contains provisions relating to prosecutions. Imposition of interests 234 a,b,c 2011a, 2202 imposition of penalties 270a 275 prosecutions 275a 280d the idea of undergoing imprisonment if convicted of offences can be a strong deterrent from brazen tax evasion and non compliance. Further addition in the assessments under section 153a of income tax act, 1961 is overruled if it does not contain incriminating materials. Prosecution us 276b of the incometax act, 1961 need of. The incometax act seeks to enforce tax compliance in a three fold manner. Income tax act rules list 2019 has been provided for tax payers which includes revised and newly added tax rules. As per section 153a of income tax act, if the assessment has been made under section 1431 only, then further addition are not permitted until and unless they are not backed by incriminating material if assessment under section 1431 has not. These provisions deal with the procedure in prosecution proceedings under the income tax act, 1961. Penalties and prosecutions under income tax act, 1961.
Procedure in prosecution proceedings under income tax act. Continuation of prosecution proceedings us 276cc not. Latest income tax act sections list has been provided for finance people. As per section 278a, a person shall be punishable with imprisonment for a period which shall not be less than 6 months but which may extend to 7 years and with fine. Under the incometax act, 1961 there are various provisions for compliance with taxing provisions and the collection of taxes. Section 285ba 287 of income tax act obligation to furnish. Default in complying with such provisions or conditions as prescribed under the income tax act would attract certain penalty and also in some cases prosecutions as well.
As per section 275a, whoever contravenes of any of the above provisions shall be punishable with rigorous imprisonment of upto a period of 2 years and shall also be liable for fine. Assessment under section 153a of income tax act, 1961. Prosecution under section 276c of incometax act, 1961 an. Scprosecution 276cc failure to file income tax return roi. Prosecution us 276c for late deposit of self assessment tax. Section 276b of the income tax act, 1961, providing for the prosecution provision in case of default in payment of tds under chapter xviib and chapter xiid, was inserted by the finance act, 1968, for the first time by the legislature. Section 276cc, read with section 9 of the income tax act, 1961 offences and prosecution failure to furnish return of income assessment year 198283 whether where books of account of assessee were lying seized with income tax authorities and permission to take extracts of same were given by authorities after expiry of due. Deposit of tds with interest beyond stipulated period is. The other relevant sections are 276b, 278b, and 235 of the income tax act, 1961 which deal with criminal prosecution for failure on the part of company in deducting tax at source and paying to the account of central government.
In addition to this, recently notified central action plan for the period april 2018 to june 2018 mandates that each range should identify and process atleast 10 prosecution cases for defaults liable for prosecution under section 276cc of the income tax act, 1961 it act as well as initiate prosecution in all cases wherein additions that are. As per section 276 a taxpayer shall be punished with rigorous imprisonment for a term which may extend to two years and shall also be liable for fine. Sanction for prosecution of offences under chapter xii of. Section 277a falsification of books of account or document, etc. Section 154 of the income tax act, 1961 deals with the rectification of mistake. The sections dealing with offences and prosecution proceedings are included in chapter xxii of the incometax act, 1961 i. Penalty under clause c of sub section 1 of section 271 of the incometax act, 1961, if the assessing officer or the commissioner of income tax appeals during the course of the assessment proceedings under the act is satisfied that any person has concealed or furnished inaccurate particulars of income. This 76 pager issue of taxsutra pro is on the prosecution of tax offences under the income tax act, 1961 the act. Apart from penalty for various defaults, the incometax act also contains provisions for launching prosecution proceedings against the taxpayers for various offences. This paper deals with a very important aspect of the income tax act, 1961 i. Prosecution under section 276c of incometax act, 1961. Income tax department has come out with a new set of guidelines for identifying and processing cases for prosecution under direct tax laws. Penalties and prosecutions under the income tax act, 1961. Penalties and prosecutions under income tax act, 1961 taxguru.
The other relevant sections are 276 b, section 278 b and section 235 of the income tax act, 1961 which deals with criminal prosecution for failure on the part of company in deducting tax at source and paying to the account of central government. List of sections of income tax act 1961 download pdf. Amongst other provisions, section 276c of the act contains provisions relating to prosecution against wilful attempt to evade any tax, penalty or. Income received or assumed to be received in india is taxable in the hands of residents, nonresidents, and residents but nonordinarily residents. Default in complying with provisions of or with conditions prescribed under the incometax act would attract certain penalty and in critical cases prosecutions as well. Section 9 of income tax act, 1961 income deemed to. By upholding the trial magistrates order of framing prosecution charges under section 276cc of the act, the hc rejected taxpayers reference of the proviso to section 276cc of the act,2 and the contention that there was no tax payable but rather the taxpayer was entitled to. Prosecution and penalties under income tax act, 1961. Section 275a provides for prosecution in the case of contravention of any of the above discussed provisions by the taxpayers. Whether assessment is necessary for prosecution under section 276c1.
Contravention of order made under sub section 3 of section 2. Guide to offenses and prosecutions under the incometax. Section 2792 of income tax act empowers a chief commissioner of director general of income tax to compound an offence either before or after the institution of prosecution proceeding. Section 154 of income tax act, 1961 rectification of mistake. Income tax return itr can be either filed voluntarily under section 9 or on demand by the income tax department itd under section 1421. Income tax act 1961 section 277 false statement in. Whenever income tax department feels that a particular person has committed a particular offence, a wrongful act or he is guilty of a crime, the department will initiate the proceedings before a magistrate. Offences and prosecutions under the incometax act, 1961. It was contended that the orders was liable to be set aside as the prosecution under section 276c can be launched only after a valid and legal section granted by the commissioner of income tax under 279 of the act after completion of the assessment under section 1433 of the income tax act.
In light of the above discussion, it is apparent that sub section 1 of section 279 of the income tax act, 1961 only authorizes principal commissioner or commissioner or commissioner appeals or the appropriate authority, as authorities competent to grant section for institution of prosecution. Prosecutions and punishment under the income tax law apart from penalty for various defaults, the income tax act also contains provisions for launching prosecution proceedings against the taxpayers for various offences. Cbdt instruction on section 279 of the income tax act. The assessee can be charged with interest and also punished by prosecution. It is required to know what happens after the taxpayer has filed the return of income. Penalties and prosecutions under the income tax act, 1961 penalties and prosecutions default in complying with provisions of or with conditions prescribed under the incometax act would attract certain penalty and in critical cases prosecutions as well. Offences and prosecutions under income tax act, 1961 the sections dealing with offences and prosecution proceedings are included in chapter xxii of the income tax act, 1961 i. Section 278a of the income tax act 1961 provides for prosecution in the case of a second or subsequent offense under those sections. In this part you can gain knowledge about the various provisions relating to prosecution which can. Section 276b talks about offences related to failure to pay tax to the credit of central government. As per section 275a, whoever contravenes of any of the above provisions shall be punishable with rigorous imprisonment of upto. Itd brings out a preliminary assessment of all the income tax returns filed for its own record and intimate taxpayers the result of that preliminary assessment.
Section 285ba and 287 of income tax act 1961 obligation to furnish statement of financial transaction or reportable account and publication of information respecting assessees in certain cases are defined under section 285ba and 287 of income tax act 1961. Section 276c2 of the indian income tax act reads as under. In the instant case, the petitioners filed a petition for quashing of the prosecution, that has been launched against the petitioners by the income tax department for the alleged offences punishable under sections 276b read with section 278b of the income tax act, 1961 hereinafter referred to as it act. Income tax act 1961 section 276cc judgments legalcrystal. Guide to offenses and prosecutions under the incometax act. The incometax act, 1961 the act seeks to enforce tax compliance in a three fold.
In fact, section 279 of income tax act 1961 clearly states that only the principal commissioner or commissioner appeals or the appropriate authority is the authorized person to grant sanction in cases of prosecution against defaulters by the income tax officials followed by principal chief commissioner, chief commissioner, principal director general or director general as per subsection 1 of section 279 of the income tax act, 1961. The relevant section of incometax act prescribe the minimum and maximum penalties which can be levied. The income tax act, 1922 provided for the prosecution of taxpayers who were guilty of the offences mentioned in section 51 andsection 52 of the act. Amongst other provisions, section 276c of the act contains provisions relating to prosecution against wilful attempt to evade any tax, penalty or interest. In some situations, there may be a mistake in any order passed by the assessing officer. Failure to comply with the provisions of clause iib of sub section 1 of section 2. Section 278ab 278b of income tax act power of principal. If a person fails to pay to the credit of the central government, the tax collected by him as authorize under the provisions of section 206 c, he shall be punishable. The supreme court sc, has held that prosecution proceedings under section 276cc of the incometax act, 1961 the act for the failure to file return of income roi could be initiated where return had been filed subsequent to the notice us 142 or 148. Section 115bac of the income tax act, 1961 provides a concessional rate, but it is subject to the condition that the total income shall be computed without specified exemption or deduction, set. Sections 280a, 280b, 280c and 280d have been introduced by the finance act, 2012 w.
Prosecutions and punishment under income tax act, 1961. Section 276b failure to pay tax to the credit of central. Download the list of sections of income tax act, 1961 in pdf and excel format. Amongst other provisions, section 276c of the act contains provisions relating to prosecution against wilful attempt to evade any tax, penalty or interest chargeable or imposable or underreporting of income or, to. In any prosecution for any offence under the income tax act which requires culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.
These provisions, inter alia, deal with the constitution of special courts for conducting prosecution proceedings under the income tax act. The incometax act, 1961 the act seeks to enforce tax compliance in a three fold manner. Public servant furnishes any information in contravention of the provisions of section 82, prosecution may be instituted against him with the previous. First we shall understand the provisions before amendment made as per the finance act, 2020 as per section 61, an individual is said to be resident if he fulfills either of below criteria. Section 80c is a popular choice if you want an answer to the question. Government issues clarification regarding section 115bac. Intimation under section 1431 of income tax act 1961.
There are some lapses on the part of the assessee which are punishable through the courts. Section 245 h of the income tax act grants the power to settlement. Criminal prosecution under income tax act legal news. Prosecution and punishment under income tax enterslice. The paper aims to equip readers with an understanding of each offence, its ingredients and its defences, by relying on past case law on the subject.
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