Report No. 47

VI. Amendments in the Income-tax Act

Re-draft of section 276B.¹

276B. (1) If a person, without reasonable cause or excuse, fails to deduct or after deducting fails to pay the tax as required by or under the provisions of sub-section (9) of section 80E or Chapter XVIIB, he shall be punishable

(i) if the amount of tax which he has failed to deduct or pay exceeds one lakh of rupees, or if the case is one of second or subsequent conviction for an offence under this act, with imprisonment for a term which may extend to seven years,. and with fine:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment or the court, such imprisonment shall not be less than six months2.

(ii) in any other case, with imprisonment for term which may extend to three years, or with fine, or with both.3

(2) A person shall not be prosecuted under this section for failure to furnish in due time the return of the income under sub-section (1) of section 139.

1. See para. 15.60 read with para. 15.55(a) of the Report.

2. Provision for minimum fine linked up with illegal gain may not be needed in Income-Tax Act as there are penalties.

3. Present minimum as to fine removed, as suggested.

Re-draft of section 276C.¹

276C. If a person wilfully fails to furnish in due time the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148, he shall be punishable-

(i) if the amount of tax which would have been evaded if the failure had not been discovered, exceeds one lakh of rupees or if the case is one of a second or subsequent conviction for an offence under this act, with imprisonment for a term which may extend to seven years, and with fine2:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be less than six months;

(ii) in any other case, with imprisonment for a term which may extend to three years, or with fine, or with both:

Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-section (1) of section 139

(i) for any assessment year commencing prior to the first day of April, 1971, or

(ii) for any assessment year commencing on or after first day of April, 1971, if-

(a) the return is furnished by him before the expiry of the assessment year; or

(b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid and any tax, deducted at source, does not exceed three thousand rupees.

1. See para. 15.60, read with para. 15.55(c) of the Report.

2. Present minimum as to fine removed, as suggested.

New section to be inserted.¹

276E. Wilful failure to pay tax.-

If any person wilfully refuses or fails to pay the tax assessed under this Act, and a period of not less than•six months has elapsed since the assessment, he shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both.

1. See para. 15.72 of the Report.

Re-draft of section 277.¹

277. False statement in declaration.-

If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers, an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable-

(i) if the amount of tax which would have been evaded if the statement or account had been accepted as true, exceeds one lakh of rupees, or if the case is one of a second or subsequent conviction for an offence under this Act, with imprisonment for a term which may extend to seven years, and with fine:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be less than six months;

(ii) in any other case with imprisonment for a term which may extend to three years, or with fine, or with both.

1. See para. 15.60, read with para. 15.55(a) of the Report.

Re-draft of section 278.¹

278. Abetment of false returns etc.-

If a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any income chargeable to tax which is false and which he either knows to be false or does not believe to be true, he shall be punishable

(i) if the amount of tax which would have been evaded if the declaration, account or statement had been accepted, as true, exceeds one lakh of rupees or if the case is one of a second or subsequent conviction for the offence under this Act, with imprisonment for a term which may extend to seven years, and with fine:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be less than six months;

(ii) in any other case, with imprisonment for term which may extend to three years, or with fine, or with both."

Section 279(1)-Amendments consequential on the addition of new penal sections in the Act to be made.

1. See para. 15.60, read with para. 7.20 of the Report.

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