Curated commentaries and expert insights on selected statutory provisions,
case laws, and legal developments, offering practical interpretation and context.
Aimed at helping users understand the “why” behind the law, these notes add value beyond the bare text.
Act Rules
Bills
Income Tax Bill 2025 Clause 485 imposes six months to seven years imprisonment for repeat tax offenders
The Income Tax Bill 2025's Clause 485 introduces enhanced penalties for repeat tax offenders, mirroring Section 278A of the Income-tax Act 1961. The provision mandates rigorous imprisonment of six months to seven years plus mandatory fines for individuals convicted of second or subsequent offenses under specified sections (476, 477, 478(1), 479, 480, 482, 484). Key similarities include the trigger mechanism requiring prior conviction, identical punishment ranges, and mandatory minimum sentences. Primary differences involve the covered offense sections, with the new clause consolidating and potentially modernizing the approach. The provision reflects legislative intent to deter recidivism through stringent penalties while maintaining policy continuity from the existing framework.
Act Rules
Bills
Taxpayer challenges constitutional validity of abetment provisions criminalizing assistance in filing false tax returns
A taxpayer challenged the constitutional validity of abetment provisions in tax legislation. The Income Tax Bill 2025's Clause 484 criminalizes abetting or inducing false tax returns, maintaining similar structure to existing Section 278 of the Income-tax Act 1961. Both provisions prescribe rigorous imprisonment of six months to seven years for amounts exceeding twenty-five lakh rupees, and three months to two years for lesser amounts, plus mandatory fines. The offence requires knowledge of falsity or disbelief in truth. The new provision excludes fringe benefits references, reflecting policy shifts while maintaining quantum thresholds and sentencing structures for deterring tax evasion facilitators.
Act Rules
Bills
Income Tax Bill 2025 Clause 483 criminalizes falsifying documents to help others evade tax with imprisonment up to two years
The Income Tax Bill 2025's Clause 483 criminalizes falsification of books of account or documents with intent to enable another person to evade tax, interest, or penalty. The provision prescribes rigorous imprisonment for three months to two years plus fine. It requires proving willful conduct and intent to facilitate evasion but eliminates the need to prove actual evasion occurred. This clause substantially mirrors Section 277A of the Income-tax Act 1961, maintaining identical punishment and scope while targeting both direct offenders and facilitators of tax evasion schemes.
Act Rules
Bills
Taxpayer faces criminal prosecution for false tax statements under Section 277 and proposed Clause 482 with graded punishment
A taxpayer faces criminal prosecution for making false statements in tax verifications or submitting false accounts under both the existing Income Tax Act, 1961 (Section 277) and the proposed Income Tax Bill, 2025 (Clause 482). The provisions require proof that the person knew or believed the statement was false. Punishment is graded based on potential tax evasion: where evaded tax exceeds twenty-five lakh rupees, rigorous imprisonment ranges from six months to seven years plus fine; in other cases, three months to two years plus fine. The 2025 Bill maintains nearly identical language and structure as the 1961 Act, ensuring continuity in enforcement and judicial interpretation while deterring deliberate tax evasion.
Act Rules
Bills
Income Tax Bill 2025 Clause 481 criminalizes willful failure to produce tax documents with one year imprisonment and mandatory fine
The Income Tax Bill 2025's Clause 481 criminalizes willful failure to produce accounts and documents as required by tax authorities, prescribing rigorous imprisonment up to one year and mandatory fine. This provision largely mirrors Section 276D of the Income-tax Act 1961, maintaining similar penal consequences for non-compliance with statutory notices. The key difference lies in updated procedural references and slightly modified language regarding fine imposition. Both provisions require proof of willful default rather than mere negligence, serving as enforcement tools to compel taxpayer compliance and deter obstruction of assessment processes. The provision emphasizes maintaining proper documentation and timely response to official requisitions.
Act Rules
Bills
Income Tax Bill 2025 Clause 480 sets criminal penalties for willful failure to file returns after search operations
The Income Tax Bill 2025's Clause 480 addresses criminal penalties for willful failure to file income tax returns following search operations. The provision prescribes imprisonment of three months to three years plus fines for deliberate non-compliance with notices issued under section 294(1)(a). This replaces Section 276CCC of the 1961 Act with similar penalties but removes transitional exemptions and aligns with the new legislative framework. The offense requires proving willful intent, providing safeguards against inadvertent lapses while maintaining strong deterrent measures against tax evasion in search cases.
Act Rules
Bills
Income Tax Bill 2025 Clause 479 extends compliance window for filing returns to avoid criminal prosecution
The Income Tax Bill 2025's Clause 479 replaces Section 276CC of the Income-tax Act 1961, criminalizing willful failure to file income tax returns. Both provisions impose graded punishments based on tax evasion amounts: rigorous imprisonment of 6 months to 7 years plus fine if tax evaded exceeds Rs. 25 lakh, otherwise 3 months to 2 years imprisonment plus fine. Key change: Clause 479 extends the compliance window from "assessment year" to "one year from tax year end" for avoiding prosecution. Both exempt prosecution if returns are filed within specified timeframes or if tax payable by individuals doesn't exceed Rs. 10,000. The updated provision modernizes terminology while maintaining deterrent effect against deliberate non-compliance.
Act Rules
Bills
Income Tax Bill 2025 Clause 478 maintains criminal penalties for tax evasion with imprisonment up to seven years
The Income Tax Bill 2025's Clause 478 largely replicates Section 276C of the Income-tax Act 1961, criminalizing wilful attempts to evade tax, penalty, or interest. Both provisions impose rigorous imprisonment of six months to seven years for evasion exceeding Rs. 25 lakh, and three months to two years for lesser amounts, plus fines. The provisions include identical Rs. 25 lakh thresholds, quantum-based punishment structures, and inclusive definitions of wilful attempt covering false entries, statements, and omissions. Minor modifications in Clause 478 include modernized language and clearer penalty provisions, while maintaining the core framework for prosecuting tax evasion with requirements for proving deliberate intent.
Act Rules
Bills
Income Tax Bill 2025 Clause 477 mirrors existing criminal penalties for non-deposit of collected taxes
The Income Tax Bill 2025's Clause 477 maintains substantially identical provisions to Section 276BB of the Income Tax Act 1961 regarding criminal liability for failure to deposit tax collected at source. Both provisions prescribe rigorous imprisonment of three months to seven years plus fine for non-payment of collected taxes. The key exemption remains unchanged - no prosecution if payment is made before the deadline for filing the prescribed statement. The primary differences are structural, involving renumbering of cross-referenced sections rather than substantive changes. This continuity ensures smooth transition while maintaining deterrent effect against misappropriation of collected taxes, though interpretational issues regarding multiple offences and vicarious liability may require judicial clarification.
Act Rules
Bills
Income Tax Bill 2025 Clause 476 criminalizes TDS/TCS deposit failures with 3 months to 7 years imprisonment plus fine
The Income Tax Bill 2025's Clause 476 criminalizes failure to deposit taxes deducted or collected at source to the Central Government, prescribing rigorous imprisonment of 3 months to 7 years plus fine. The provision covers defaults under Chapter XIX-B and specific transactions referenced in Section 393 notes. An exception exists if payment is made before the prescribed statement filing deadline. This mirrors Section 276B of the Income-tax Act 1961 but uses cross-references to notes and tables rather than direct statutory references. The "ensure payment" language potentially expands liability to supervisory personnel beyond direct deductors, requiring robust compliance systems and clear responsibility allocation.
Act Rules
Bills
Income Tax Bill 2025 Clause 475 criminalizes fraudulent property removal to prevent tax recovery with two-year imprisonment
The Income Tax Bill 2025's Clause 475 criminalizes fraudulent removal, concealment, transfer, or delivery of property to prevent tax recovery, mirroring Section 276 of the Income Tax Act 1961. The provision requires fraudulent intent and prescribes rigorous imprisonment up to two years plus fine. Key change involves replacing specific "Second Schedule" reference with "as prescribed," potentially broadening scope while maintaining core elements. Both provisions target deliberate asset dissipation to defeat recovery proceedings, requiring proof of mens rea and nexus with execution of recovery certificates. The modification reflects legislative modernization while preserving deterrent effect against tax evasion tactics.
Act Rules
Bills
Income Tax Bill 2025 Clause 474 criminalizes obstruction during tax inspections with two-year imprisonment plus fine
The Income Tax Bill 2025's Clause 474 mirrors Section 275B of the Income-tax Act 1961, both criminalizing failure to provide necessary facilities to authorized officers during tax inspections. The provision prescribes rigorous imprisonment up to two years plus fine for non-compliance with document inspection requirements. While Clause 474 references section 247(1)(b)(ii) and Section 275B references section 132(1)(iib), the substantive obligations remain unchanged. The provision aims to deter obstruction during tax investigations and ensure compliance with statutory requirements. Key interpretational challenges include defining "necessary facility" and determining mens rea requirements, though judicial precedents provide guidance on reasonable cooperation expectations.
Act Rules
Bills
Income Tax Bill 2025 Clause 473 criminalizes breach of tax authority orders with two-year imprisonment and fine
Clause 473 of the Income Tax Bill, 2025 criminalizes contravention of orders issued under section 247(1)(viii) or (4), prescribing rigorous imprisonment up to two years and fine. This provision mirrors Section 275A of the Income Tax Act, 1961, which penalizes breach of search and seizure orders under section 132. Both provisions carry identical punishment structures and aim to deter non-compliance with tax authority orders during investigations. The new clause represents continuity in enforcement policy while operating within an updated procedural framework, potentially expanding the scope of criminalized contraventions beyond traditional search operations.
Act Rules
Bills
Income Tax Bill 2025 Clause 472 sets six-month penalty limitation periods from quarter-end replacing current monthly computation
The Income Tax Bill 2025's Clause 472 replaces Section 275 of the Income-tax Act 1961, establishing limitation periods for imposing tax penalties. The new provision requires penalty orders to be passed within six months from the end of the relevant quarter, depending on circumstances like completion of proceedings, appeals, or revisions. Key changes include shifting from "end of month" to "end of quarter" computation, updated section references reflecting the new appellate structure, and maintaining procedural safeguards requiring taxpayers be heard before adverse orders. The clause excludes certain periods from limitation calculations, including time for rehearings and judicial stays, while ensuring penalty orders align with revised assessments following appellate or revisional orders.
Act Rules
Bills
Income Tax Bill 2025 Clause 471 requires taxpayer hearings before penalties and Joint Commissioner approval for higher amounts
The Income Tax Bill 2025's Clause 471 establishes procedural safeguards for penalty imposition, requiring taxpayers be heard before penalties are imposed and mandating Joint Commissioner approval for penalties exceeding specified thresholds. While maintaining core protections from the 1961 Act's Section 274, Clause 471 notably omits provisions for faceless penalty schemes and technology-driven proceedings. The provision preserves natural justice principles through hearing requirements and hierarchical oversight, but the absence of digital transformation measures may impact administrative efficiency and transparency in penalty proceedings.
Act Rules
Bills
Clause 470 and Section 273B provide statutory relief from tax penalties when taxpayers prove reasonable cause for non-compliance
The Income Tax Bill 2025's Clause 470 and the Income-tax Act 1961's Section 273B both provide statutory relief from penalties when taxpayers demonstrate "reasonable cause" for non-compliance. Both provisions operate as non obstante clauses, overriding specified penalty sections where genuine, non-culpable defaults occur. The taxpayer bears the burden of proving reasonable cause, which courts interpret as circumstances preventing ordinary prudent persons from complying. Clause 470 applies to new penalty sections under the proposed Bill, while Section 273B covers existing provisions. Both aim to prevent mechanical penalty imposition and encourage voluntary compliance, ensuring fairness in tax administration by distinguishing between deliberate violations and bona fide errors.
Act Rules
Bills
Income Tax Bill 2025 Clause 469 replaces Section 273A streamlining penalty reduction powers for voluntary disclosure cases
The Income Tax Bill 2025's Clause 469 replaces Section 273A of the Income-tax Act 1961, governing penalty reduction or waiver powers. Both provisions allow tax authorities to reduce penalties for voluntary disclosure cases, requiring pre-detection disclosure, taxpayer cooperation, and tax payment arrangements. Key features include prior approval requirements for cases exceeding five lakh rupees, bars on multiple reliefs, genuine hardship provisions, twelve-month disposal timelines, and final non-appealable orders. Clause 469 streamlines the framework by removing obsolete transitional provisions while maintaining core eligibility criteria, procedural safeguards, and oversight mechanisms to balance voluntary compliance incentives with administrative accountability.
Act Rules
Bills
Income Tax Bill 2025 Clause 468 sets Rs 10,000 penalty for TAN violations under Section 397
The Income Tax Bill 2025's Clause 468 imposes a penalty of Rs. 10,000 for non-compliance with Tax Deduction and Collection Account Number requirements under Section 397. The provision has two components: failure to comply with TDCAN/TAN requirements, and knowingly quoting false account numbers in documents like challans and certificates. This replaces Section 272BB of the Income-tax Act 1961, maintaining the same penalty amount but with subtle changes in language regarding mental element requirements. The Assessing Officer retains discretionary power to impose penalties, though the new provision omits explicit procedural safeguards for opportunity of being heard that existed in the previous section.
Act Rules
Bills
Income Tax Bill 2025 Clause 467 imposes Rs 10,000 penalties for PAN/Aadhaar non-compliance but removes hearing safeguards
The Income Tax Bill 2025's Clause 467 introduces penalties for non-compliance with PAN/Aadhaar requirements in financial transactions, succeeding Section 272B of the Income-tax Act 1961. The provision imposes Rs. 10,000 penalties per default for: general non-compliance with section 262, knowingly providing false PAN/Aadhaar numbers, failing to quote or authenticate identification numbers, and institutional failures to ensure proper compliance. While maintaining similar penalty structures and amounts as the existing law, the new clause notably omits explicit procedural safeguards requiring opportunity for hearing before penalty imposition, unlike its predecessor which mandated such protections under natural justice principles.
Act Rules
Bills
Income Tax Bill 2025 Clause 466 introduces thousand rupee penalties but omits mandatory hearing requirements unlike existing Section 272AA
The Income Tax Bill 2025's Clause 466 introduces a penalty mechanism for non-compliance with section 254 provisions, allowing designated tax authorities to impose penalties up to one thousand rupees. This mirrors Section 272AA of the Income-tax Act 1961, which addresses non-compliance with section 133B survey provisions. Both provisions share similar penalty amounts, authorized officers, and deterrent objectives. However, Clause 466 notably omits the express procedural safeguard requiring an opportunity to be heard before penalty imposition, unlike Section 272AA which mandates this protection. This absence raises concerns about natural justice and procedural fairness in the new provision.
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