The FAQs provide a comprehensive overview of the prosecution provisions under the Income-tax Act, explaining the circumstances in which criminal proceedings may be initiated, the applicable punishments, and important exceptions. Prosecution may be launched for offences such as non-compliance with search and seizure directions, failure to permit inspection of books, fraudulent transfer of property to defeat tax recovery, non-payment of TDS/TCS, wilful tax evasion, failure to furnish income tax returns, false statements or verification, abetment of tax evasion, false entries in books, and non-compliance with special audit directions. Punishments generally range from fines to simple imprisonment of up to two years, depending on the nature of the offence and the amount of tax involved, while certain offences prescribe rigorous imprisonment. The FAQs also clarify the meaning of a wilful attempt to evade tax, the monetary thresholds affecting punishment, and situations where prosecution will not be initiated, including specified relief for delayed TDS/TCS payments and certain cases of delayed return filing. Notably, proceedings under Section 276A cannot be initiated on or after 1 April 2023, reflecting amendments to the prosecution framework.
FAQs on Prosecution provision under IT Act
Q.1 When prosecution under Section 275A may be launched?
Ans. Prosecution under Section 275A may be launched if a person fails to comply with the order of the authorities to not deal with the goods that are impracticable to be seized.
Q.2 What is the punishment and fine for the offence under section 275A?
Ans. Such offence shall be punishable with simple imprisonment which may extend to 2 years and shall also be liable to fine.
Q.3 When prosecution under Section 275B shall be launched?
Ans. Prosecution under Section 275B shall be launched on failure to afford facility for inspection of books of account during search
Q.4 When prosecution under Section 276 shall be launched?
Ans. Prosecution under Section 276 shall be launched if a person fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, to prevent the recovery of tax.
Q.5 What is the punishment and fine for the offence under section 275B?
Ans. Such offence shall be punishable with simple imprisonment which may extend to 6 months, or with fine or with both.
Q.6 What is the punishment and fine for the offence under section 276?
Ans. Such offence shall be punishable with simple imprisonment for a term up to 2 years and with fine.
Q.7 What is the punishment and fine for the offence under section 276A?
Ans. Such offence shall be punishable with rigorous imprisonment which may extend to 2 years. In the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be less than 6 months.
No proceedings shall be initiated under this provision on or after 01-04-2023.
Q.8 When penalty under Section 276B shall be imposed?
Ans. Prosecution under Section 276B shall be launched if a person fails to:
(i) Pay to the credit of the Central Government, the tax deducted by him (i.e., TDS); or
(ii) Pay tax or ensure payment of tax to the credit of the Central Government, as required by or under:
a. The proviso to Section 194S(1) in relation to consideration for transfer of VDA, excluding such consideration which is wholly in kind; or
b. Section 194BA(2) in relation to winning, excluding such winnings which are wholly in kind.
Note 1: No prosecution shall be launched if the payment of tax deducted in respect of a quarter has been made to the credit of the Central Government at any time on or before the time prescribed for filing the TDS statement of such quarter (w.e.f 01-10-2024). Note 2: No prosecution shall be launched if the payment of tax collected in respect of a quarter has been made to the credit of the Central Government at any time on or before the time prescribed for filing the TCS statement of such quarter (w.e.f 01-04-2025).
Q.9 When prosecution under Section 276A can be launched?
Ans. Prosecution under Section 276A can be launched where any person, appointed as liquidator of a company, has committed any of the following defaults:
a. He fails to give notice of his appointment within 30 days to the Assessing Officer having jurisdiction over such company;
b. He fails to set aside the amount, notified to him by the Assessing Officer, to meet the tax demand;
c. He parts with any of the assets of the company or properties in hand, until the amount to be set aside, is notified by the Assessing officer, without the prior approval of the prescribed tax authority; or
d. He parts with any of the assets of the company or properties in hand until the amount of tax demand notified by the Assessing Officer is set aside.
No proceedings shall be initiated under this provision on or after 01-04-2023.
Q.10 What is the punishment and fine for the offence under section 276B?
Ans. Such person shall be punishable:
(a) With simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount of such tax exceeds Rs. 50 lakh; or
(b) With simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount of such tax exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
(c) With fine, in any other case.
Q.11 When prosecution under Section 276C(1) shall be launched?
Ans. Prosecution under Section 276C(1) shall be launched where a person wilfully attempts to evade any tax, penalty or interest chargeable or imposable under this Act or under-reports his income.
Q.12 What is the punishment and fine for the offence under section 276BB?
Ans. Such person shall be punishable
(a) With simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount of such tax exceeds Rs. 50 lakh; or
(b) With simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount of such tax exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
(c) With fine, in any other case.
Q.13 When prosecution under Section 276BB shall be launched?
Ans. Prosecution under Section 276BB shall be launched on a person who after collecting tax at source under section 206C, fails to pay the same (either whole or any part of it) to the credit of the Central Government. However, this section doesn’t apply if the tax collected at source is paid to the Central Government on or before the due date for filing the TCS statement related such tax collected.
Q.14 What is the meaning of a wilful attempt to evade tax?
Ans. Wilful attempt to evade tax, penalty or interest chargeable or imposable or payment thereof shall include the following:
a. Where any person has in his possession or controls any books of account or other documents (relevant to any proceedings under this Act) containing any false entry or statement;
b. Where any person makes or causes to be made any false entry or statement in such books of account or other documents;
c. Where any person wilfully omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or
d. Where any person causes any other circumstances to exist which have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.
Q.15 What is the punishment and fine for the offence under section 276C(2)?
Ans. Person shall be punishable
(a) With simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount sought to be evaded exceeds Rs. 50 lakh; or
(b) With simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount sought to be evaded exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
(c) With fine, in any other case.
Q.16 When prosecution under Section 276C(2) shall be launched?
Ans. Prosecution under Section 276C(2) shall be launched where a person wilfully attempts to evade payment of tax, penalty or interest chargeable or imposable under this Act.
Q.17 What is the punishment and fine for the offence under section 276C(1)?
Ans. Person shall be punishable
(a) With simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount sought to be evaded or tax on under-reported income exceeds Rs. 50 lakh; or
(b) With simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount sought to be evaded or tax on under-reported income exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
(c) With fine, in any other case.
Q.18 When prosecution under Section 276CC shall be launched?
Ans. Prosecution under Section 276CC shall be launched if a person fails to furnish the return of income under the following provisions:
a. In accordance with Section 139(1);
b. In response to a notice issued under Section 142(1)(i);
c. In response to a notice issued under Section 148for re-assessment; or
d. In response to a notice issued under Section 153Afor assessment in case of search.
Q.19 When prosecution under section 276CC shall not be launched?
Ans. No prosecution under this provision shall be launched for failure to furnish return of income under section 139(1), if:
a. The return is furnished by the assessee before the expiry of the assessment year or an updated return is furnished within 48 months from the end of the relevant assessment year; or
b. The tax payable by such person (not being a company) on the total income determined on regular assessment, as reduced by advance tax or self-assessment tax paid before the expiry of the assessment year or tax deducted or tax collected at source, does not exceed Rs. 10,000.
Q.20 When prosecution under Section 276CCC shall be launched?
Ans. Prosecution under Section 276CCC shall be launched where a person wilfully fails to furnish in due time the return of income setting forth his undisclosed income for the block period, which he is required to furnish by notice give uner Section 158BC(1)(a)
Q.21 What is the punishment and fine for the offence under section 276CC?
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Person shall be punishable
- With simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount of tax which would have been evaded if the failure had not been discovered exceeds Rs. 50 lakh; or
- With simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount of tax which would have been evaded if the failure had not been discovered exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
- With fine, in any other case.
Q.22 What is the punishment and fine for the offence under section 276CCC?
Ans. Such person shall be punishable
- With simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount of tax which would have been evaded if the failure had not been discovered exceeds Rs. 50 lakh; or
- With simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount of tax which would have been evaded if the failure had not been discovered exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
- With fine, in any other case.
Q.23 What is the punishment and fine for the offence under section 276D?
Ans. Such person shall be punishable with simple imprisonment for a term upto 6 months, or with fine or with both
Q.24 When prosecution under Section 276D shall be launched?
Prosecution under Section 276D shall be launched if a person wilfull fails to comply with a direction issued to him under Section 142(2A) .
Q.25 When prosecution under Section 277 shall be launched?
Ans. Prosecution under Section 277 shall be launched if a person makes a statement in any verification under this Act, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true.
Q.26 What is the punishment and fine for the offence under section 277?
Ans
- Simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount of tax which would have been evaded if the statement or account had been accepted as true, exceeds Rs. 50 lakh; or
- Simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount of tax which would have been evaded if the statement or account had been accepted as true, exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
- Fine, in any other case.
Q.27 When prosecution under Section 278 shall be launched?
Ans. Prosecution under Section 278 shall be launched if a person commits any of the following defaults:
a. Abets or induces another person to make and deliver an account or a statement or declaration, relating to any income which is chargeable to tax, which is false and which he either knows to be false or does not believe to be true; or
b. Abets or induces another person to evade any tax, penalty or interest chargeable or imposable or to under-report his income under this Act as referred under Section 276C(1).
Q.28 What is the punishment and fine for the offence under section 277A?
Ans. Such person shall be punishable with simple imprisonment for a term upto 2 years and with fine.
Q.29 When prosecution under Section 277A shall be launched?
Ans. Prosecution under Section 277A shall be launched if the following conditions are satisfied:
a. A person makes or causes to make any entry or statement;
b. Such entry or statement is false or he either knew it to be false or does not believe it to be true;
c. Such entry or statement is found in any books of account or document relevant to or useful in any proceeding under the Act against him or any other person;
d. The entry or statement is made wilfully and with intent; and
e. Such entry or statement enables any other person (‘the other person’) to evade any tax or interest or penalty chargeable or imposable under the Act.
Q.30 What is the punishment and fine for the offence under section 278?
Ans.
- Simple imprisonment for a term up to 2 years, or with fine, or with both, where the amount of tax, penalty or interest which would have been evaded if declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds Rs. 50 lakh; or
- Simple imprisonment for a term of up to 6 months, or with a fine, or with both, where the amount of tax, penalty or interest which would have been evaded if declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds Rs. 10 lakh but does not exceed Rs. 50 lakh; or
- Fine, in any other case.
Q.31 What is the punishment and fine for the offence under section 280?
Ans. Such person shall be punishable with simple imprisonment up to one month, or with fine, or with both.
Q.32 When prosecution under Section 280 shall be launched?
Ans. Section 138(2) provides that the Central Government may direct that certain information or document may be furnished or produced by a public servant to the specified authorities.
Prosecution under Section 280 shall be launched where a public servant furnishes or produces (before any person or authority) any such document or record or any information or computerised data or part thereof as comes into his possession during the discharge of official duties in contravention of the provisions of Section 138(2). To initiate prosecution under this provision, the prior approval of the Central Government shall be required.
(Republished with Amendments – Source: Income Tax India Website)
