Taxsutra Pro Issue 2 : Prosecution under the Income Tax Act, 1961 (understanding the nature of relevant offences)

This 76 pager issue of Taxsutra Pro is on the prosecution of tax offences under the Income Tax Act, 1961 (the “Act”). 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. Special focus is given to the relationship between the criminal proceedings and the income tax assessment / appellate / penalty proceedings, in order to understand the scope of defending prosecution through the means of civil proceedings. The focus of the paper is to bring out the nature of the offences discussed, and certain important principles in relation to each of them. It does not deal with the procedural or evidentiary aspects of prosecution under the Act. The offences discussed are:

• Failure to deposit tax with the Central Government – section 276B of the Act;
• Wilful attempt to evade tax or under-reporting of income – section 276C of the Act;
• Knowingly making a false statement in any verification required under the Act or rules thereunder, or for delivering a false account or statement – section 277 of the Act; and
• Wilful failure to furnish returns in due time – section 276CC of the Act.