Offences and Prosecutions

Under Chapter XXII of the (Indian) Income-Tax

Act, 1961

By
Vijay Pal Dalmia, Advocate
Partner
Vaish Associates Advocates, New Delhi
Mobile: +91 9810081079
Email: vpdalmia@vaishlaw.com
www.vaishlaw.com

Chapter XII of the Income Tax Act, 1961 (I.T. Act), which
deals with the OFFENCES & PROSECUTIONS, is always a
matter of concern for anyone concerned and related with the I.T.
Act. It is quite perplexing to understand the defenses available to
anyone prosecuted under the provisions of this chapter of the I.T.
Act.

For understanding the nuances and implications of the Chapter XII of the I.T. Act, it is necessary
to first of all to take note of abbreviations used hereinafter, and understand some legal terms.

Cr.P.C. = The Code of Criminal Procedure, 1973.

I.T. Act = Income Tax Act, 1961.
RI = Rigorous Imprisonment.
Mens rea1 shall mean and include intention, motive, knowledge of a fact,
belief, and reason to believe a fact.
o The onus of proof that there was no Mens rea, shall be on the accused.
Company2 shall mean and include,
o A Body Corporate;
o A Firm;
o An Association of Persons (whether incorporated or not);
o A Body of individuals (whether incorporated or not).
Director shall mean and include3,
o A Partner in the Firm;
Any member controlling the affairs of
any Association of Persons,
a Body of individuals.

1
Sec.278E of the I.T.Act
2
Sec.278B explanation (a) of the I.T.Act
3
Sec.278B explanation (b) of the I.T.Act
 Bailable Offence shall mean an offence which is made Bailable, and in case of
such offence, bail can be claimed as a matter of right, which is subject to fulfilment
of certain conditions like furnishing a bail bond, and surety, etc. to the satisfaction
of the officer concerned.
Non-Bailable Offence shall mean an offence which is not a Bailable offence (all
offences which are not made Bailable by any Statute), and in which bail cannot be
claimed as a matter of right.
Cognizable Offence means an offence in which, a Police officer may arrest
without any warrants or orders of the court.
Non-cognizable Offence means an offence in which a Police Officer has no
authority to arrest without warrants.
Summons-Case means a case relating to an offence, or a case which is declared
to be a Summons-Case, by any Statute.
Warrant-Case means a case relating to an offence, punishable with death,
imprisonment for life, or imprisonment for a term exceeding 2 years.
It is important to note that since some of the above terms have not been defined under the I.T.
Act, the meaning of the terms used above have to be taken from the Code of Criminal Procedure,
1973, as mandated under Sec. 280C of the I.T. Act.

JUDICIAL PRESUMPTION OF MENS REA IN CASE OF PROSECUTION UNDER

CHAPTER XXII OF THE I.T. ACT

It is utmost important to note that with respect to all the offences under
Chapter XXII of the I.T. Act, a judicial presumption, under Sec. 278E of the
I.T. Act, as to the culpable state of mind i.e. Mens rea, is raised against all
accused in relation to all offences.

The onus of proof has been put on the accused to prove that the accused had no Mens rea which
include intention, motive or knowledge of a fact or belief in, or reason to believe a fact, to
commit any offences under the said Chapter.

Absence of Mens rea can be taken as a defense and this is one of the strongest defense available
for any prosecutions under this Chapter. Going by Sec.278E(2) of the I.T. Act, the presumption
against the accused has to be judiciously raised only when the court believes that there are facts
on record to establish guilt of the accused beyond reasonable doubt, and mere existence of a
possibility of commission of an offence cannot be a ground for conviction.

While dealing with the aspect of Mens rea in relation to Sec.276C of the I.T. Act,
the Supreme Court in the case of Gujarat Travancore Agency v. CIT4, held that:

"There can be no dispute that having regard to the provisions of Sec. 276C, which speaks
of wilful failure on the part of the defaulter and taking into consideration the nature of the
4
[1989]177ITR455(SC)
 penalty, which is punitive, no sentence can be imposed under that provision unless the
element of mens rea is established."

The above decision, in a way, is an explanation to Sec.278E of the I.T. Act, wherein it has been
held that for offences under Sec. 276C(1), the prosecution has to establish the element of Mens
rea. This is contrary to the plain language of Sec.278E of the I.T. Act.

Applying unequivocally Sec. 278E of the I.T. Act, which deals with the presumption as to
culpable mental state in a prosecution of offence, for offenses committed under Sec.276CC of
the I.T. Act, the Supreme Court in Sasi Enterprises Vs. Assistant Commissioner of Income
Tax5, held that in case of a prosecution of an offence, the Court has to presume the existence
of mens rea and it is for the accused to prove the contrary and that too beyond reasonable doubt.
Resultantly, the accused in a prosecution case has to prove the circumstances which prevented
them from filing the returns as per Sec. 139(1) of the I.T. Act or in response to notices under
Sec.s 142 and 148 of the I.T. Act.

DEFENSES IN CASE OF PROSECUTION UNDER CHAPTER XXII OF THE I.T. ACT

In case, a prosecution has been launched, the accused may defend the case:

By compounding6, 7;
By pleading not guilty and facing trial;
By discharging the onus of proof of absence of Mens rea for commission of the crime
alleged;
In a Warrant-case, by demonstrating at the state of framing of the charge by the court,
that no case can be made out on the basis of the facts and documents available on record;
or
By filing a petition under Sec. 482 of the Cr.P.C. for quashing of the prosecution,
provided merits of the case support such petition.

QUASHING PETITION UNDER SEC. 482 OF THE CR.P.C.

One of the most resorted to and sought after remedy in prosecutions under
Chapter XXII of the I.T. Act, is filing of a quashing petition under Sec. 482
of the Cr.P.C. However, one has to understand that for each and every case,
quashing petition under Sec.482 of the Cr.C.P.C., may not be an effective
remedy.

5
[2014]222TAXMAN78(SC)
6
F.NO.285/35/2013 IT (INV.V)/108 dated 23-12-2014
7
GUIDELINES FOR COMPOUNDING OF OFFENCES UNDER DIRECT TAX LAWS, 2014 Circular Dated
23-12-2014 Income Tax
 The general and consistent law is that the inherent power of the High Court under Sec.
482 of Cr.P.C. for quashing has to be exercised sparingly with circumspection and in the
rarest of rare cases.

The Supreme Court in Som Mittal vs Govt. Of Karnataka 8, has held that the power under
Sec. 482 Cr.P.C. must be exercised sparingly, with circumspection and in rarest of rare cases.
Exercise of inherent power under Sec. 482 of the Code of Criminal Procedure is not the rule
but it is an exception. The exception is applied only when it is brought to the notice of the Court
that grave miscarriage of justice would be committed if the trial is allowed to proceed where
the accused would be harassed unnecessarily if the trial is allowed to linger when prima facie
it appears to Court that the trial would likely to be ended in acquittal.

In the case of Central Bureau of Investigation v. Ravi Shankar Srivastava9, the Supreme
Court was of the opinion that, the High Court in exercise of its jurisdiction under Sec. 482 of
the Code does not function either as a court of appeal or revision, and held and envisaged that
three circumstances under which the inherent jurisdiction may be exercised, namely,

(i) to give effect to an order under the Code,

(ii) to prevent abuse of the process of the Court, and
(iii) to otherwise secure the ends of justice.

The Supreme Court further held that while exercising powers under
Sec. 482 of the Cr.P.C., the court does not function as a court of appeal
or revision. Inherent jurisdiction under Sec. 482 of the Cr.P.C., though
wide, has to be exercised sparingly, carefully and with caution and only
when such exercise is justified by the tests specifically laid down in
Sec. 482 of the Cr.P.C., itself. It would be an abuse of the process of the court to allow any
action which would result in injustice and prevent promotion of justice. In exercise of powers
the court would be justified to quash any proceeding if it finds that initiation/continuance of it
amounts to abuse of the process of the court or quashing of these proceedings would otherwise
serve the ends of justice. When no offence is disclosed by the complaint, the court may examine
the question of fact. When a complaint is sought to be quashed, it is permissible to look into the
materials to assess what the complainant has alleged and whether any offence is made out even
if the allegations are accepted in toto.

In another case, State of Haryana and others v. Ch. BhajanLal &Ors.10, the Supreme Court
laid down the categories of cases in which the High Court may, in exercise of powers under
Sec. 226 of the Constitution of India or under Sec. 482 Cr.P.C., interfere in proceedings to
prevent abuse of process of the Court or otherwise to secure the ends of justice.

8
AIR 2008 SC 1528
9
2006 Cri LJ 4050
10
AIR 1992 SC 604
 a. Where the allegations made in the First Information Report or the
complaint, even if they are taken at their face value and accepted in their
entirety do not prima-facie constitute any offence or make out a case
against the accused.
b. Where the allegations in the First Information Report and other materials,
if any, accompanying the F.I.R. do not disclose a cognizable offence,
justifying an investigation by police officers Under Sec. 156(1) of the
Code except under an order of a Magistrate within the purview of
Sec. 155(2) of the Code.
c. Where the uncontroverted allegations made in the FIR or complaint and
the evidence collected in support of the same do not disclose the
commission of any offence and make out a case against the accused.
d. Where, the allegations in the F.I.R. do not constitute a cognizable offence
but constitute only a non-cognizable offence, no investigation is
permitted by a police officer without an order of a Magistrate as
contemplated Under Sec. 155(2) of the Code.
e. Where the allegations made in the FIR or complaint are so absurd and
inherently improbable on the basis of which no prudent person can ever
reach a just conclusion that there is sufficient ground for proceeding
against the accused.
f. Where there is an express legal bar engrafted in any of the provisions of
the Code or the concerned Act (under which a criminal proceeding is
instituted) to the institution and continuance of the proceedings and/or
where there is a specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the aggrieved party.
g. Where a criminal proceeding is manifestly attended with mala fide and/or
where the proceeding is maliciously instituted with an ulterior motive for
wreaking vengeance on the accused and with a view to spite him due to
private and personal grudge.

It has been held by the Apex Court that when the allegations made in the complaint even if
taken on their face value and accepted in their entirety do not prima facie constitute any offence
or make out a case against the accused or where allegations made in the complaint and the
evidence produced in support of the same do not disclose the commission of any offence and
make out a case against the accused, it is open to the High Court in the exercise of extra ordinary
inherent powers to quash the complaint or the FIR.

In the case of Pepsi Foods Ltd. v. Special Judicial Magistrate11, wherein it has been
specifically held that though the Magistrate trying a case has jurisdiction to discharge the
accused at any stage of the trial if he considers the charge to be groundless but that does not
mean that the accused cannot approach the High Court under Sec. 482 of the Code or Article
227 of the Constitution to have the proceeding quashed against them when no offence has been
made out against them and still why must they undergo the agony of a criminal trial.

11
1998 Cri LJ 1
DIFFERENCE BETWEEN SUB-SEC. (1) AND SUB-SEC. (2) OF SEC. 276C OF THE I.T.
ACT

The wording and language in both sub-Sec. (1) and sub-Sec. (2) of Sec.
276C of the I.T. Act appear to be identical except for two important
differences.

The sub-Sec. (1) of Sec. 276C of the I.T. Act deals with evasion of any tax, penalty or interest
'chargeable or imposable' under the Act.

The sub-Sec. (2) of Sec. 276C of the I.T. Act deals with the evasion of the 'payment' of any tax,
penalty or interest under the Act.

Therefore, it would appear that the provisions of sub-Sec.(1) of Sec. 276C operate when any
tax, penalty or interest is chargeable or imposable and the same is alleged to have been evaded.
On the other hand, the provisions of Sec. 276C(2) would operate when the payment of tax,
penalty, or interest is due and an attempt is made to evade the payment thereof 12 13.

For being charged, under Sec. 276C(2) following three conditions are required to be fulfilled:

(i) Wilful attempts in any manner,

(ii) To evade the payment of any tax, penalty or interest under this Act, and
(iii) The tax, penalty or interest that is assessed, imposed or charged as the case
may be and not otherwise.
The Kerala High Court has held that Sub-Sec. (1) and (2) of Sec. 276C of the I.T. Act, deal
with two different situations. Sub-Sec. (1) deals with evasion of tax, penalty or interest
CHARGEABLE OR IMPOSABLE under the Act. Therefore, evidently, WHAT IS
CONTEMPLATED IS EVASION BEFORE CHARGING OR IMPOSING tax, penalty or
interest. That may include wilful suppression in the returns before assessment and completion.
But Sub-Sec. (2) DEALS WITH EVADING THE PAYMENT OF TAX, PENALTY OR
INTEREST under the Act. The words CHARGEABLE OR IMPOSABLE ARE NOT THERE.
What sub-Sec. (2) says is without prejudice to any penalty that may be imposable on him under
any other provision of this Act, be punishable...... Therefore, evidently, Sub-Sec. (2) TAKES
IN CASES OF TAX EVASION AFTER CHARGING OR IMPOSITION. Evasion after
completion of assessment also comes within the operation of the sub-Sec.214.

12
[2001]118TAXMAN526(Guj)
13
[1995]213ITR307(Guj)
14
[1987]35TAXMAN66(Ker)
FILING OF RETURN UNDER SEC. 276CC: WITHIN TIME PROSECTION WRONG

In a revision petition against the proceedings under Sec. 276C(1) of the

I.T. Act before the Andhra Pradesh High Court, it was held that where the
respondents have yet to file a return, the prosecution is premature and the
dismissal of the complaint is right. Thus, even before the act of attempt to
evade is started, on a mere anticipation or contemplation that there may be
a possibility of accruing liability after finalization of regular assessment
proceedings, it cannot be said that the accused is liable for conviction
under Sec. 276C(1) of the I.T. Act15.

For the interpretation of Sec.276CC of the I.T. Act, in a criminal appeal titled Sasi Enterprises
Vs. Assistant Commissioner of Income Tax16, the Honble Supreme Court Of India
formulated the following questions as under:

(1) Whether an Assessee has the liability/duty to file a return under

Sec. 139(1) of the Act within the due date prescribed therein?

(2) What is the effect of best judgment assessment under Sec. 144 of the Act
and will it nullify the liability of the Assessee to file its return under
Sec. 139(1) of the Act?

(3) Whether non-filing of return under Sec. 139(1) of the Act, as well as non-
compliance of the time prescribed under Sec.s 142 and 148 of the Act are
grounds for invocation of the provisions of Sec. 276CC of the Act?

(4) Whether the pendency of the appellate proceedings relating to assessment

or non-attaining finality of the assessment proceedings is a bar in
initiating prosecution proceedings under Sec. 276CC due to non-filing of
returns?

(5) What is the scope of Sec. 278E of the Act, and at what stage the
presumption can be drawn by the Court?

While answering the above questions framed by it, the Supreme Court has held as under:

Sec. 276CC applies to situations where an Assessee has failed to file a return of
income as required under Sec. 139 of the Act or in response to notices issued to the
Assessee under Sec. 142 or Sec. 148 of the Act.

15
MANU/AP/0052/1989
16
[2014]222TAXMAN78(SC)
 The proviso to Sec. 276CC gives some relief to genuine assesses. The proviso to
Sec. 276CC gives further time till the end of the assessment year to furnish return to avoid
prosecution. In other words, even though the due date would be 31st August of the assessment
year as per Sec. 139(1) of the Act, an Assessee gets further seven months' time to complete and
file the return and such a return though belated, may not attract prosecution of the Assessee.
Similarly, the proviso in clause ii(b) to Sec. 276CC also provides that if the tax payable
determined by regular assessment has reduced by advance tax paid and tax deducted at source
does not exceed Rs. 3,000/-, such an Assessee shall not be prosecuted for not furnishing the
return under Sec. 139(1) of the Act. Resultantly, the proviso under Sec. 276CC takes care of
genuine assesses who either file the returns belatedly but within the end of the assessment year
or those who have paid substantial amounts of their tax dues by pre-paid taxes, from the rigor
of the prosecution under Sec. 276CC of the Act.

Sec. 276CC contemplates that an offence is committed on the non-filing of the return and it is
totally unrelated to the pendency of assessment proceedings. The department may resort to
best judgment assessment or otherwise to past years to determine the extent of the breach. The
language of Sec. 276CC, is clear so also the legislative intention. It is trite law that as already
held by the Supreme Court in B. Permanand v. Mohan Koikal that "the language employed
in a statute is the determinative factor of the legislative intent. It is well settled principle of law
that a court cannot read anything into a statutory provision which is plain and unambiguous".
If it was the intention of the legislature to hold up the prosecution proceedings till the
assessment proceedings are completed by way of appeal or otherwise the same would have
been provided in Sec. 276CC itself. Therefore, it would be wrong to hold that no prosecution
could be initiated till the culmination of assessment proceedings, especially in a case where
the Appellant had not filed the return as per Sec. 139(1) of the Act or following the notices
issued under Sec. 142 or Sec. 148 does not arise.

PENDENCY OF THE REASSESSMENT PROCEEDINGS: NO BAR TO THE THE

CRIMINAL PROSECUTION ACT
17
In a case, before the Supreme Court the question was, whether
prosecutions under Sec. 276 and 277 of the I.T. Act and under Sec.s
193 and 196, Indian Penal Code, instituted by the Department while
THE REASSESSMENT PROCEEDINGS under the Act are pending,
are liable to be quashed on the ground that they were not
maintainable. The Supreme Court, in the circumstances of that case
held that:

"On a careful consideration of the relevant provisions of the Act, we are of the view that
the PENDENCY OF THE REASSESSMENT PROCEEDINGS CANNOT ACT AS A BAR
TO THE INSTITUTION OF THE CRIMINAL PROSECUTION for offences punishable

17
MANU/SC/0100/1984
 under Sec. 276C or Sec. 277 of the Act. The institution of the criminal proceedings cannot
in the circumstances also amount to an abuse of the process of the court."

WHEN TO FILE APPLICATION FOR COMPOUNDING OF OFFENCE

Where application for compounding of offence was not moved by the petitioner-firm before the
conviction order was passed by the criminal court. In such circumstances, there is no hesitation
in holding that the application for compounding of offence was moved after the conviction
order was passed by the Criminal court and, therefore, the question of compounding of offence,
particularly when conviction and sentence against the present petitioners had already been
passed by the Chief Judicial Magistrate, does not arise18.

DISTINCTION BETWEEN SUMMONS-CASE AND A WARRANT-CASE

The first Schedule of the Cr.P.C. Part II, provides that if any offense is punishable with
imprisonment for 3 years and upwards, but not more than 7 years, such offense shall be
classified as a cognizable and a Non-Bailable offense. In case an offense is punishable with
imprisonment for less than 3 years or with fine only, such offense shall be non-cognizable and
Bailable. While classifying the offenses below, wherever there is no provision for any offense
under the I.T. Act, the above Schedule has been referred,.

It is also necessary to understand the difference between the Summons-Case and a Warrant-
Case and process of criminal trial relating to the same.

IN A SUMMONS-CASE,

When an accused appears or brought before the Magistrate,

The particulars of the offence are stated to him, and
The accused is asked whether he wish to plead guilty or has any defense to make19.
o On pleading guilty, the Magistrate may record the plea and convict the
accused20.
The court may or may not frame a formal charge.
If the accused does not plead guilty and claims trial, or if the Magistrate does not
convict the accused,
o The Magistrate proceed to hear the prosecution and take all such evidences
as may be produced,
o And also hear the accused and take evidence as the accused may produce in
his defense21.

18
[2009]183TAXMAN1(Punj & Har)
19
Sec. 251 of Cr.P.C.
20
Sec. 253 of Cr.P.C.
21
Sec. 254 of Cr.P.C.
 o After completion of the evidence on the part of both the parties, the
Magistrate may acquit the accused or punish in accordance with the law, as
the case may be.22

IN A WARRANT-CASE,

When an accused appears or not before the Magistrate,

The Magistrate proceed to hear the prosecution and take all such evidences as may
be produced23.
If upon taking evidence, the Magistrate considers that no case against the accused
has been made out, the Magistrate shall discharge the accused. The Magistrate can
also discharge the accused provided the Magistrate considers that the charge is
groundless24.
If upon taking evidence or at any earlier stage, the Magistrate is of the opinion that
the accused has committed an offence triable as a Warrant Case, the Magistrate
will frame the charge against the accused. After framing of the charge, if the
accused pleads guilty, the Magistrate will convict him, else the Magistrate will give
an opportunity to the accused to cross-examine the witnesses, if any of the
prosecution. At this stage, the entire evidence of the prosecution will be recorded
by the Magistrate25.

o After completion of the evidence, the accused will be allowed to enter

defense and produce his evidence26.
o On the conclusion of the trial, the Magistrate will pass the judgment and
acquit or convict the accused27.
From the above, it can be observed that the trial in a summons case, is carried out in a summary
manner, whereas trial in a warrant case is elaborately done. The differentiation in these 2 type
of cases is based on the nature of the gravity of the offence.

COGNIZABLE/NON-COGNIZABLE AND BAILABLE / NON-BAILABLE, WHICH

SHALL BE SUBJECT TO THE SPECIAL PROVISIONS OF THE I.T. ACT

Since the provisions of Cr.P.C., 1973 have been made applicable for conduct
of trial for commission of offenses under Chapter XXII, it may be necessary
to understand the methodology for classification of offenses as
cognizable/non-cognizable and Bailable / Non-Bailable, which shall be
subject to the special provisions of the I.T. Act.

22
Sec. 255 of Cr.P.C.
23
Sec. 244 of Cr.P.C.
24
Sec. 245 of Cr.P.C.
25
Sec. 246 of Cr.P.C.
26
Sec. 247 of Cr.P.C.
27
Sec. 248 of Cr.P.C.
 In the Table below, the offences under Chapter XII of the I.T. Act, an attempt has been made
to dissect various offences under the said Chapter, for easy understanding of the offences and
the consequences.

TABLE OF OFFENCES
UNDER CHAPTER XXII OF THE I.T. ACT
Sec. Offence Punishment Cognizable Bailable/ Summons Triable by
of the / Non- Non- case/Warrant
I.T. Act cognizable Bailable case
275A Disobedience of the orders of the RI up to 2 Non- Bailable Summons-case Special court or
authorized officer for not years and fine cognizable the Magistrate of
removing, parting with or the First Class
otherwise deal with any books of
accounts, other documents,
money, bullion, jewellery, or
other valuable articles or things
(Sec.132(1) second proviso,
Sec.132(3))
275B Refusal to allow and facilitate the RI up to 2 Non- Bailable Summons-case Special court or
inspection of accounts and books years and fine cognizable the Magistrate of
kept in electronic form the First Class
Sec.132(1)(iib)
276 Fraudulent removal, RI up to 2 Non- Bailable Summons-case Special court or
concealment, transfer or delivery years and fine cognizable the Magistrate of
to any person of any property or the First Class
any interest therein, to prevent
that property or interest therein
being taken in execution
276A Failure to give notice of RI up to 2 Non- Bailable Summons-case Special court or
appointment as years cognizable the Magistrate of
the First Class
Liquidator;
Receiver;
Or
Failure to set aside sufficient
amount to provide for any
existing or likely tax liability,
payable by the company;
Or
Parting with the assets of the
company or the properties in
contravention of the Assessing
Officer (Sec. 178)
276(AB) Failure to comply with RI up to 2 Non- Bailable Summons-case Special court or
Sec.269UC (Transfer of Property years and fine cognizable the Magistrate of
), the First Class
Failure to deliver the possession
of the property under Sec.269UE
(2)(Delivery of possession of the
property), or
Contravene Sec.269UL(2)(Doing
any act prejudicing Transfer of
Property)
 276 B Failure to pay to the credit of the RI of not less Non- Bailable Warrant-case Special court or
Central Government of than 3 months cognizable the Magistrate of
the First Class
TDS, but which may
Tax on distributed profits of extend to 7
domestic companies, years and fine
Failure to ensure payment of
tax in respect of the winnings
from lottery, or cross-word
puzzles

276BB Failure to pay to the credit of the RI of not less Cognizable Non- Warrant-case Special court or
Central Government, the tax than 3 months Bailable the Magistrate of
collected but which may the First Class28
extend to 7
years and fine
276C(1) Wilful attempt, in any manner, to Special court or
evade any tax, penalty, or interest the Magistrate of
under the I.T. Act the First Class

For amount above RI of not less Non- Warrant-case

Rs.25,00,000/- than 6 months Bailable
but which may
extend to 7 Non-
years and fine cognizable

RI up to 2 Bailable Summons-Case
For any other amount years and fine
276C(2) Wilful attempt, in any manner, to RI of not less Non- Bailable Summons-case Special court or
evade PAYMENT of any tax, than 3 months cognizable the Magistrate of
penalty, or interest under the I.T. but which may (Sec. 279 A) the First Class
Act extend to 2
years and fine

276CC Failure to furnish the return of Special court or

income under Sec. 139(1), or Sec. the Magistrate of
148, or Sec. 153A or Sec. 115 the First Class
WD(1) or Sec. 115 WD(2) or
Sec. 115 WH in due time

For amount above Rs.25,00,000/- RI of not less Non- Non- Warrant-case

than 6 months cognizable Bailable
but which may
extend to 7
years and fine

For any other amount RI up to 2 Bailable Summons-case

years and fine

276CCC Failure to furnish in DUE TIME, Imprisonment Non- Bailable Warrant-case Special court or
RETURN of Total Income, of not less than cognizable the Magistrate of
required to be furnished under 3 months but the First Class
Sec. 158BC(a) which may
extend to 3
years and fine
276D Wilful failure to produce RI up to 1 year Non- Bailable Summons-case Special court or
accounts and documents on and fine cognizable the Magistrate of
Notice under Sec.142(1), the First Class
Or

28
Sec. 280 B of the I.T. Act
 Wilful failure to comply with the
directions issued under
Sec.142(1)
277 Making false statement in any Special court or
verification or delivering false the Magistrate of
account or statement the First Class

For amount above Rs.25,00,000/- RI of not less Non- Non-

than 6 months cognizable Bailable Warrant-case
but which may
extend to 7
years and fine

For any other amount RI of not less Bailable Summons-case

than 3 months
but which may
extend to 2
years and fine
277A Falsification of Books of RI of not less Non-cognizable Bailable Summons-case Special court or
Accounts or documents, etc. than 3 months the Magistrate of
but which may the First Class
extend to 2
years and fine
278 If a person abates, or induces Non- Special court or
another person to make and cognizable the Magistrate of
deliver an account; or a statement the First Class
or a declaration relating to any
income; or any fringe benefits
chargeable to tax which is false,
or to commit an offence under
Section 276C(1)

For amount above Rs.25,00,000/- RI of not less Non-

than 6 months Bailable Warrant-case
but which may
extend to 7 years
and fine

RI of not less
For any other amount than 3 months
but which may Bailable Summons-case
extend to 2 years
and fine

Offences by Companies Sec. 278 B : -

Where an offence has been committed by a Company,
o Every person,
Who at the time the offence was committed,
Was in-charge of, and
Was responsible to,
The Company,
For the conduct of the business of the company
o And the Company,
Shall be guilty of the offence under the Act, and proceeded and punished accordingly.
Defense /Exception under Sec. 278 B : -
The prosecution under this Sec. can be defended, If the accused person liable to punishment,
o Proves,
The offence was committed without his knowledge, or
He had exercised all due diligence to prevent the commission of the offence

Following persons (Sec. 278 B (2)) may also be held liable for offences by companies:
If it is proved that the offence has been committed,
o With the consent of,
 o With the connivance of, or
o Is attributable to any neglect of,
Any Director, Manager, Secretary, or other officer of the company.

Author

Vijay Pal Dalmia

Partner
Vaish Associates Advocates
New Delhi Mumbai Gurgaon Bengaluru
Phone: +91 11 42492532 (Direct)
Mobile: +91 9810081079
Email: vpdalmia@vaishlaw.com
www.vaishlaw.com

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