Offences under Income Tax Act
Authored by Harsh Raj
The tax collection in India is done by the Income tax department which derives its authority from Income tax Act, 1961. The Income tax has a duty for timely collection of taxes and provides it to the government. The tax collection is done by the people but people don't want to give their hard earned money to the government. For this purpose the offences section has been instituted in the legislation to empower the department to institute offences against the people in case of Tax arrears. This work deals with the offences under Income Tax Act,1961.
The tax collection is very important for the government to function and achieve the desired aims and objectives. So, it is important to timely collect the taxes and for this cause, a robust mechanism of tax collection has been put forward in the form of Income Tax Act,1961. Thus, the Act prescribes a series of offences under the Act in case of default of tax payment and could attract a certain amount of penalty and In some cases prosecution as well.
The Act provides three means for compliance of the rules:
Charging of interest
Imposition of penalty
Launching of a prosecution against tax defaulters.
Interests charging are mostly for minor issues and are compensatory in nature like in case of late payment. Penalties and prosecution are punitive in nature and are imposed in critical cases of willful neglect. The offences which attract prosecution are far more serious than the predetermined penalties.
Offences under this Act
There are various offences in the said Act both cognizable and non- cognizable offences which is required as a strong deterrent against tax delinquent. The offences and prosecution are dealt in the 22nd chapter of the Act. All the cases for the offences in the Act are tried by either a special court or judicial magistrate of first class. The offences are as follow:
● Section 275A talks about the seized assets in context of the order under section 132(3). Punishment for this offence is upto 2 years and fine.
● Section 275B provides that if the assessee fails to afford the authorised officer the necessary facility to inspect the books of account or other documents under section 132(1)(iib)shall be punished with rigorous imprisonment for a term upto two years and fine.
● Section 276 says that anyone who removes, conceals, transfers or delivers their property or anything having monetary value to any other person to avoid the taxes, will be punished with rigorous imprisonment upto 2 years and fine.
● Section 276A provides that if a person fails to give notice in accordance with section 178(1) or fails to provide money which is decided under section 178(3) or using some assets of the company which is now under the authorization of liquidator will be punished by rigorous imprisonment upto 2 year but not less than 6 months.
● Section 276AB provides that whoever fails to contravene with the provision of 269-UC, 269-UL(2) and 269-UE will be punishable by rigorous imprisonment upto 2 year but not less than 6 month.
● Section 276B says that Failure to pay tax to the credit of the Central Government under Chapter XII-D or XVII-B will be punished by rigorous imprisonment upto 7 year but not less than 3 months and with fine.
● Section 276BB provides that if the person fails to pay the tax at the source under section 206 shall be punished with rigorous imprisonment upto 7 year but not less than 3 month and fine.
● Section 276C says that if the person evades taxes wilfully in whatsoever manner will be punished with rigorous imprisonment upto 3 year and fine but not less than 3 months and if the tax evasion is above 100000 rupees he will be punished with rigorous imprisonment upto 7 years but not less than 6 months and fine.
● Section 276CC provides that if the person wilfully fails to pay the tax and if the amount payable is not discovered is more than 100000, then the person will be punished with rigorous imprisonment upto 7 years but not less than 6 months and fine and in cases where amount is less than 100000 will be punished by imprisonment upto 3 years but not less than 3 months and fine.
● Section 276CCC provides that if the person wilfully fails to pay the tax under section 158-BC(a), then the person will be punished with rigorous imprisonment upto 3 years but not less than 3months and fine and In cases where search is initiated under section 132 will not be punished under this provision.
● Section 276D provides that if the person wilfully doesn't provide the document on the date prescribed to him in the notice served under section 142(1) will be punished up to one year or with fine which shall not be less than four rupees or more than ten rupees for every day until the day which the default continues, or both.
● Section 277 provides that if the person makes any statement and provide accounts which is false will be punished upto 3 years but not less than 3 months along with fine and if the amount of 100000 or more has been evade, then he will be punished upto 7 months but not less than 6 months along with fine.
● Section 277A provides that if the first person enables the second person to evade the tax, then in this case the first person will be punished upto 3 years of rigorous imprisonment but not less than 3 month.
● Section 278 provides that if a person abets the person to evade tax and the amount evaded is more than 100000 will be punished with imprisonment upto 7 year but not less than 6 month with fine.
● Section 278A provides that if ang person convicted of section 276B, 276, 276CC, 276DD, 276E, 277, 288 will be punishable for the second and for every subsequent offence with rigorous imprisonment up to 7 year but not less than 6 months and with fine.
● 278B provides that if the offences are committed by the company then, in such cases the person in charge will be held responsible and will pay fine and also to be proceeded accordingly.
● 278C says that if the offence is done by HUL, then karta or whosoever will be guilty will be held responsible and proceeded accordingly.
Can penalties be waived and reduced?
Yes, it can be reduced and waived. According to the section 273 commissioner of Income tax has a power to reduce the penalty or even waiver it. The commissioner can subject to such conditions as he may think fit to impose, grant to the person immunity from the imposition of any penalty under this Act, if he is satisfied that the person has, after the abatement, co-operated with the income-tax authority in the proceedings before him and has made a full and true disclosure of his income and the manner in which such income has been derived.
The Act provides the important aspect for the implementation of the Act. Without the punishment or fear of sanction there could not be an effective implementation. According to Austin 'Law is the command of sovereign and backed by sanctions'. Austin also supported the view that law will not be accepted by the people until unless there is some force making them accept it. The offences and punishment under the said Act is a legal tool used by the government to make it efficient. The main aim of the provision of offences under this legislation is to serve the function of being deterrents against tax delinquents.
Income Tax Act, 1961.