Sec 270aa of incometax act provide immunity from prosecution and penalty by making application to assessing officer subject to condition of making payment of tax as assess byA.O I Want to just know that that the immunity provided from prosecution is when there is case of scrutiny of a particular year or it is also applicable when there is search initiated under sec 132... Also there is any rule related to immunity form prosecution when assesse is ready to pay all tax and fine?
No this immunity is only against penalty of a particular assessment year because penalty in case of search is initiated under 271AAB and which is not covered by section 270AA.
This section provides immunity from penalty as well as prosecution if the appeal is made before initiation of prosecution procedure.
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Is there any provision in the act for the immunity from prosecution or penalty in case of search and seizure if one pays the whole fine ?
Yes you can make application under section 273A(4) of the income tax act to save penalty under search.
Sec 273A(4) gives only penatly releif upto a some extend i was just asking is there any provision to free from prosecution when search is initiated? As 270AA provides immunity frim penalty and prosecution likewise there is any provision for immunity against prosecution when search is initiated?
No I don't think there is any provision for immunity from prosecution seperately currently.
So in search and seizure operation if undisclosed income is discoverd that the prosecution is initiated or it is in the discretion of A.O to initiate the prosecution? I have seen many search operations in news but none of them is being prosecuted all r set free by paying off the fine.. so in search nd seizure prosecution is necessary or not? Also the maximum punishment for each offence where the tax evaded exceeds 25 lakh is 7 years means the person commiting offence under three different sections could go jail for 21 years ... it doesn't sounds correct?
I have seen many search and seizure cases but prosecution was initiated in none of them so it's a very rare phenomenon and not a regular thing.
Prosecution is not necessary it is only initiated if the amount is very huge and the assets of assessee also can't cover it or if the assessee is not co operating in the procedure.
I don't think that's correct.
U r saying that prosecution is only initiated when amount is very huge and the assets of the assesse can't cover it .. but this is nowhere written in the act . Then how could u be so sure about this? And also the tax department officials don't have to answer to anyone why they haven't initiated prosecution after search although they have discovered the undisclosed income? So they r not answeable?
I am just saying this on the basis of experience nothing else.
They are answerable to their seniors but there are various guidelines issued by CBDT which they needs to follow if they start putting everyone behind bars there are lot of search conducted every year they can't put everyone behind bars.
Is any of your case in survey?
Settlement commission can provide immunity against prosecution u/s 245H.
Tell me something about settlememt commission who can have the settlement under commission..? Can have Settlement after search and seizure ? Who one can have immunity against prosecution under this? Also tell me about the limitations of the course of settlement? Yes my client case is under survey... what to follow now?
Anyone can make application before settlement commission and they can get immunity from prosecution under any section and from penalty only if the assessee has paid full amount of income tax and interest and has disclosed each and every income. The only condition is the additional tax required to be paid should be more than 3 lakh.
Once the appeal has been made before settlement commission you can't appeal against the order of settlement commission.
Appeal before settlement commission should be made before the prosecution proceedings start.
https://dor.gov.in/settlementcommissions/settlement-commisssion-it-wt
You can visit above link to find details.
In Settlement application is to be filed only in the prescribed Form No.34-B notified under the Income Tax Rules, 1962, which is to be signed by the applicant himself. The application can be made personally or by post. The applicant or his authorized representative can make application in person. Application can also be sent by registered post addressed to the Secretary of the concerned Bench of the income tax Settlement Commission.
The application should be accompanied by the proof of payment of additional Tax and interest under section 234B and 234C on it. The interest on the additional tax is chargeable till the date of admission of the application.
The application has to be accompanied by a copy of Challans of payment of tax which have to be attested by the applicant.
The application is also to be accompanied by the evidence of payment of the prescribed fee.At present the Amount of the fee is Fixed at Rs. 500/-.
In case of survey they will open only 1 years scrutiny as it's not search so is it so big that they are planning of prosecution?
Q.1
Hi,
-The immunity provided from prosecution is when there is case of scrutiny of a particular year.
-245H-Power of Settlement Commission to grant immunity from prosecution and penalty.
Q.2
245H-Power of Settlement Commission to grant immunity from prosecution and penalty.
Q.3
Please refer the section:
Power of Settlement Commission to grant immunity from prosecution and penalty.
245H. (1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has co-oper-ated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also 24[(either wholly or in part)] from the imposition of any penalty under this Act, with respect to the case covered by the settlement :
25[Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 245C :]
26[Provided further that the Settlement Commission shall not grant immunity from prosecution for any offence under the Indian Penal Code (45 of 1860) or under any Central Act other than this Act and the Wealth-tax Act, 1957 (27 of 1957) to a person who makes an application under section 245C on or after the 1st day of June, 2007.]
26a[(1A) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of settlement passed under sub-section (4) of section 245D within the time specified in such order or within such further time as may be allowed by the Settlement Commission, or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.]
(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person 27[* * *] had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.
Q.4
It is not a regular practice.
In search and seizure prosecution is not necessary untill the amount is very huge and assessee is not willing to corporate with the IT department.
Amount is very huge ... what does it means? In the IT act even for small amount says lakhs prosecution iss given.. so what does huge amount means.. Naman maloo sir if assesee is willing to give all his penalty and fine wouldn't it be laible for prosecution? So in search and seizure if undisclosed income is unearthed than what reason should the IT DEPARTMENT Would for not prosecutiing and under what section they will show the case?? Kindly explain me the huge amount?
No sir if the assessee is honest at the time of survey and explains everything properly and pays all due tax and fines then no penalty should be initiated based on my experience rest all depends on AO.
The scrutiny in case of survey is done under normal provisions i.e. section 143(3) and in case of search under section 153A even if the amount is unearthed by the department they don't generally start prosecution if the assessee explains everything and pays due tax and penalty because income tax department just want to recover the revenue loss of government and what will they gain by putting the assessee behind the bars.
Prosecution is undertaken by any department only is assessee denies to pay the due tax and tries to evade tax so they put them behind bars so that roam freely with governments money.
I hope this helps.
Hi,
Section 291 also empower central government to provide immunity.
291. (1) The Central Government may, if it is of opinion (the reasons for such opinion being recorded in writing) that with a view to obtaining the evidence of any person appearing to have been directly or indirectly concerned in or privy to the concealment of income or to the evasion of payment of tax on income it is necessary or expedient so to do, tender to such person immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860), or under any other Central Act for the time being in force and also from the imposition of any penalty under this Act on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of payment of tax on income.
(2) A tender of immunity made to, and accepted by, the person concerned, shall, to the extent to which the immunity extends, render him immune from prosecution for any offence in respect of which the tender was made or from the imposition of any penalty under this Act.
(3) If it appears to the Central Government that any person to whom immunity has been tendered under this section has not complied with the condition on which the tender was made or is wilfully concealing anything or is giving false evidence, the Central Government may record a finding to that effect, and thereupon the immunity shall be deemed to have been withdrawn, and any such person may be tried for the offence in respect of which the tender of immunity was made or for any other offence of which he appears to have been guilty in connection with the same matter and shall also become liable to the imposition of any penalty under this Act to which he would otherwise have been liable.
Yes settlement commission, at its discretion may provide you immunity from prosecution
Also, 278AB empowers commissioner or principal commissioner to grant immunity in certain cases.
278AB. (1) A person may make an application to the Principal Commissioner or Commissioner for granting immunity from prosecution, if he has made an application for settlement undersection 245C and the proceedings for settlement have abated under section 245HA.
(2) The application to the Principal Commissioner or Commissioner under sub-section (1) shall not be made after institution of the prosecution proceedings after abatement.
(3) The Principal Commissioner or Commissioner may, subject to such conditions as he may think fit to impose, grant to the person immunity from prosecution for any offence 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 :
Provided that where the application for settlement under section 245C had been made before the 1st day of June, 2007, the Principal Commissioner or Commissioner may grant immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force.
(4) The immunity granted to a person under sub-section (3) shall stand withdrawn, if such person fails to comply with any condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.
(5) The immunity granted to a person under sub-section (3) may, at any time, be withdrawn by the Principal Commissioner or Commissioner, if he is satisfied that such person had, in the course of any proceedings, after abatement, concealed any particulars material to the assessment from the income-tax authority or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the proceedings.
Yes settlement commission, at its discretion may provide you immunity from prosecution
Yes settlement commission, at its discretion may provide you immunity from prosecution
Yes settlement commission, at its discretion may provide you immunity from prosecution
Yes settlement commission, at its discretion may provide you immunity from prosecution
Yes settlement commission, at its discretion may provide you immunity from prosecution
Last question naman maloo sir- i just want to know that if the amount is very huge unearthed during search and all the penalty and fine paid by assesse ., then would the assesse is being prosecuted and if no than what reason IT DEPARTMENT give for not prosecuting ... as sec 270c never tell that anyone who pays fine is not prosecuted
What 270C are you talking about?
In normal sense it's about natural justice, if you see normal civil procedure also in our court that if the criminal surrender and accepts his crime his punishment is reduced, that is natural justice. Therefore they don't want to discourage people from telling the truth and if people tell truth and pay all taxes and fine then by following natural justice they don't start prosecution against him. How will they benefit by putting a person in jail if he is outside he will earn and pay tax that will benefit him.
But if they find that the person evading tax has made this his normal activity and is doing it purposefully then they decide to start prosecution.
Yes, if assessee if willing to pay all his penalty and fine then he may be not liable for any prosecution.
As I have already mentioned that prosecution is weapon available to income tax department. Whether they choose it or not, it's at their discretion.
If a taxpayer is cooperating with department and ready to pay tax and penalty, income tax department generally does not prosecute. Prosecution is used when taxpayer does not cooperate with the department and trying to escape.
If a person attempts to avoid tax, penalty, interest intentionally or under-states his income, then prosecution proceedings against such person will be imprisonment for a term not less than 3 months extending to 3 years if the amount evaded accounts to 1 lakh wherein it is 7 months to 7 years in other cases under section 276C.
Further,If a person makes wilful default in furnishing of return of income under section 139(1) or in
response to notice under section 142(1)(i) or section 148 or section 153A then he shall be prosecuted under section 276CC.