Advocate Akhilesh Kumar Sah

TIME FOR FULL/GOOD KNOWLEDGE OF LAWS FOR TAX PRACTITIONERS, CHARTERED ACCOUNTANTS IN ORDER TO SAVE THEMSELVES AND DOING WORK OF CLIENTS AS PER LEGAL PROVISIONS

In the complex world of taxation, accounting need has emerged for tax practitioners, chartered accountants to work carefully and honestly, well-understanding the laws.

Hon’ble Prime Minister PM Narendra Modi speaking on the foundation day of ICAI on July 1, 2017 has advised Chartered Accountants to work carefully towards the profession.

The Income Tax Law as well as GST Law contain provisions to combat offences relating to falsification of accounts or evading of taxes.

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The GST Laws take in ambit as an offence where if a taxable person falsifies or substitutes financial records or produces fake accounts and/or documents or furnishes any false information or return with an intention to evade payment of tax due.

Section 277A of the Income Tax Act, 1961(for short ‘the Act’) deals with the offence and prosecution in respect of falsification of accounts or documents, etc. According to section 277A of the Act, if any person (hereafter in this section referred to as the first person) wilfully and with intent to enable any other person (hereafter in this section referred to as the second person) to evade any tax or interest or penalty chargeable and imposable under the Act, makes or causes to be made any entry or statement which is false and which the first person either knows to be false or does not believe to be true, in any books of account or other document relevant to or useful in any proceedings against the first person or the second person, under the Act, the first person shall be punishable with rigorous imprisonment for a term which shall not be less than 3 months but which may extend to 2 years and with fine.

As per Explanation appended to section 277A of the Act, for the purposes of establishing the charge under this section, it shall not be necessary to prove that the second person has actually evaded any tax, penalty or interest chargeable or imposable under the Act.

According to section 278 of the Act, if a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any income or any fringe benefits chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under section 276C(1) of the Act, he shall be punishable,—

(i) in a case where the amount of tax, penalty or interest which would have been evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds Rs. 25,000, with rigorous imprisonment for a term which shall not be less than 6 months but which may extend to 7 years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than 3 months but which may extend to 2 years and with fine.

According to section 277 of the Act, if a person makes a statement in any verification under the Act or under any rule made thereunder, 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, he shall be punishable,—

(i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds Rs. 25,000, with rigorous imprisonment for a term which shall not be less than 6 months but which may extend to 7 years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than 3 months but which may extend to 2 years and with fine.

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