Summary of Offences and Prosecution :
The punishable offences as well as the prosecution for such offences under the Income-tax Act, 1961 are discussed under Chapter XXII. Prosecution provisions under the Income-tax Act, 1961 are used as a tool for effective enforcement of tax laws and deterring tax avoidance and tax evasion.
While penalties may be imposed by the income-tax authorities, the imposition of a fine or the launching of prosecution for any offence under the Act can be made only by the Magistrate of a Court under sections 275A to 280. In respect of the same default of an assessee, penalty may be imposed and a prosecution also may be launched against him.
| Section | Nature of default | Rigorous imprisonment | Quantum of Fine |
| 275A | Contravention of order made under the second proviso to sub-section (1) or subsection (3) of section 132 regarding search and seizure | Upto 2 Years (+) fine | No limit specified |
| 275B | Failure to afford the authorized officer the necessary facility to inspect the books of account or other documents as required under section 132(1)(iib) | Upto 2 years (+) fine | No limit specified |
| 276 | Removal, concealment, transfer or delivery of property to thwart tax recovery | Upto 2 years (+) fine | No limit specified |
| 276A | Failure to comply with the provisions of section 178(1) and (3) regarding company in liquidation or parting with any of the assets of the company or the properties in his hands in contravention of the provision of sections 178(1) and (3). | 6 months to 2 years | – |
| 276AB | Failure to comply with the provisions of section 269UC or 269UE or 269UL relating surrendering of property to Central Government | 6 months to 2 years | – |
| 276B | Failure to pay to the Central Government, tax deducted under the provisions of Chapter XVII-B or the tax payable by him, as required by (i) section 115-O(2); or (ii) Second proviso to section 194B | 3 months to 7 years (+) fine | No limit specified |
| 276BB | Failure to pay to the Central Government tax collected under section 206C | 3 months to 7 years (+) fine | No limit specified |
| 276C(1) | Wilful attempt to evade tax, penalty or interest. | Evaded tax exceeding 25 lakh: 6 months to 7 years (+) fine
Other cases : 3 months to 2 years (+) fine |
No limit specified |
| 276C(2) | Wilful attempt to evade payment of tax, penalty or interest. | 3 months to 2 years (+) fine, at the discretion of the court. | No limit specified |
| 276CC | Wilful failure to furnish in due time a return of income u/s 139(1) or u/s 142(1)(i) or u/s 148 or u/s 153A.
Note: If return of income under section 139(1) is furnished before expiry of the assessment year or the tax payable by him on the total income determined on regular assessment reduced by advance tax and TDS does not exceed Rs 3000 – No prosecution. |
Evaded tax exceeding 25 lakh : 6 months to 7 years (+) fine
Other cases: 3 months to 2 years (+) fine |
No limit specified |
| 276D | Willful failure to produce accounts and documents under section 142(1)/ 142(2A) | Up to one year (+) fine | No limit specified |
| 277 | False statements in verification. | Evaded tax exceeding 25 lakh: 6 months to 7 years (+) fine
In other cases: 3 months to 2 years (+) fine |
No limit specified |
| 277A | Falsification of books or documents, etc. to induce or abet any person to evade any tax, penalty or interest chargeable or imposable under the Act. It is not necessary to prove that the other person has actually evaded any tax, penalty or interest chargeable or imposable under the Act for the purpose of establishing the charge under this section. | Imprisonment of 3 months to 2 years (+) fine | No limit specified |
| 278 | Abetment of false return etc. (relating to any income chargeable to tax) | Evaded tax exceeding 25 lakh: 6 months to 7 years(+) fine
In other cases: 3 months to 2 years (+) fine |
No limit specified |
| 278A | Second and subsequent offences under section 276B, 276C(1), 276CC, 276DD, 276E, 277, 278. | 6 months to 7 years for every subsequent offence(+) fine | No limit specified |
| 280(1) | Disclosure of particulars by public servants in contravention of Section 138(2). Prosecution after previous sanction of Central Government under section 280(2). | Up to 6 months(+) fine | No limit specified |
Section 278AA provides that where a reasonable cause for the failure is proved, punishment shall not be imposed for offences specified in sections 276A, 276AB and 276B.
For the purposes of offences and prosecutions, the following individuals will be deemed to be guilty of the offence committed by the respective person
| Person | Section | Individual |
| Company | 278B | Every person in charge of affairs; Director, Manager, Secretary and every officer who is guilty of offence |
| Firm | 278B | Partner |
| AOP/BOI | 278B | Members controlling the affairs |
| HUF | 278C | Karta or member either by acquiescence or negligence. |
Section 278B(3) provides that if an offence under the Act has been committed by a person being a company, it shall be punished with fine. Every other person who was in charge of and was responsible for the conduct of business of the company, or any director, manager, secretary or other officer of the company (with whose consent or connivance or due to whose neglect the offence was committed) would be liable for punishment of imprisonment and fine wherever so provided.