Income Tax Act

Official PDF pages 556–560

SOURCE PDF PAGE 556
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[Failure to furnish return of income setting forth undisclosed income.
480.   If a person wilfully fails to furnish in due time the return of income, setting forth
his undisclosed income for the block period, which is required to be furnished
by notice given under section 294(1)( a ), he shall be punishable—
( a )   with simple imprisonment for a term up to two years, or with fine, or with
both, where the amount of tax exceeds fifty lakh rupees; or
( b )   with simple imprisonment up to six months, or with fine, or with both,
where the amount of tax exceeds ten lakh rupees but does not exceed fifty
lakh rupees; or
( c )   with fine, in any other case.
Failure to comply with a direction of special audit or valuation.
481.   If a person wilfully fails to comply with a direction issued to him under sec-
tion 268(5), he shall be punishable with simple imprisonment for a term up to
six months, or with fine, or with both. ]
False statement in verification, etc.
482.   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,—
27
[ ( a )   with simple imprisonment for a term up to two years, or with fine, or
with both, where the amount of tax, which would have been evaded if the
statement or account had been accepted as true, exceeds fifty lakh rupees;
or
( b )   with simple imprisonment for a term up to six months, or with fine, or
with both, where the amount of tax, which would have been evaded if the
26.   Sections 480 and 481 substituted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to their
substitution, sections 480 and 481 read as under :
“480.   Failure to furnish return of income in search cases.— If a person wilfully fails to furnish
in due time the return of total income which is required to be furnished by notice given under
section 294(1)( a ), he shall be punishable with imprisonment for a term which shall not be
less than three months but which may extend to three years and with fine.
481.   Failure to produce accounts and documents.— If a person wilfully fails to produce, or
cause to be produced, the accounts and documents as are referred to in the notice served
on him under section 268(1) on or before the date specified in such notice, or wilfully fails
to comply with a direction issued to him under section 268(5), he shall be punishable with
rigorous imprisonment for a term which may extend to one year and with fine.”
27.   Clauses ( a ), ( b ) and ( c ) substituted for clauses ( a ) and ( b ) by the Finance Act, 2026, w.e.f.
1-4-2026 . Prior to their substitution, clauses ( a ) and ( b ) read as under :
“( a )   in a case, where the amount of tax, which would have been evaded if the statement
or account had been accepted as true, exceeds twenty-five lakh rupees, with rigorous
imprisonment for a term which shall not be less than six months but which may
extend to seven years, and with fine;
( b )   in any other case, with rigorous imprisonment for a term which shall not be less
than three months but which may extend to two years, and with fine.”

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SOURCE PDF PAGE 557
statement or account had been accepted as true, exceeds ten lakh rupees
but does not exceed fifty lakh rupees; or
( c )   with fine, in any other case. ]
Falsification of books of account or document, etc.
483.   (1) If any person (herein referred to as the first person) wilfully and with intent
to enable any other person (herein referred to as the second person) to evade
any tax or interest or penalty chargeable and imposable under this Act, makes or
causes to be made any entry or statement which is false and which the first person
either knows to be false or does not believe to be true, in any books of account or
other document relevant to or useful in any proceedings against the first person or
the second person, under this Act, the first person shall be punishable with   [ simple
imprisonment for a term up to two years and with fine ] .
(2) For the purposes of establishing the charge under this section, it shall not be
necessary to prove that the second person has actually evaded any tax, penalty or
interest chargeable or imposable under this Act.
Abetment of false return, etc.
484.   If a person abets or induces in any manner another person––
( a )   to make and deliver an account or a 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; or
( b )   to commit an offence under section 478(1),
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[ he shall be punishable—
( i )   with simple imprisonment for a term up to two years, or with fine, or with
both, where the amount of tax, penalty or interest which would have been
evaded, if the declaration, account or statement had been accepted as true,
or which is wilfully attempted to be evaded, exceeds fifty lakh rupees; or
( ii )   with simple imprisonment for a term up to six months, or with fine, or
with both, where the amount of tax, penalty or interest which would have
been evaded, if the declaration, account or statement had been accepted as
true, or which is wilfully attempted to be evaded, exceeds ten lakh rupees
but does not exceed fifty lakh rupees; or
( iii )   with fine, in any other case. ]
28.   Substituted for “rigorous imprisonment for a term which shall not be less than three months
but which may extend to two years and with fine” by the Finance Act, 2026, w.e.f.   1-4-2026 .
29.   Substituted for the following by the Finance Act, 2026, w.e.f.   1-4-2026 :
“he shall be punishable,—
( i )   in a case, where the amount of tax, penalty or interest which would have been evad -
ed, if the declaration, account or statement had been accepted as true, or which
is wilfully attempted to be evaded, exceeds twenty-five lakh rupees, with rigorous
imprisonment for a term which shall not be less than six months but which may
extend to seven years, and with fine;
( ii )   in any other case, with rigorous imprisonment for a term which shall not be less
than three months but which may extend to two years, and with fine.”

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Punishment for second and subsequent offences.
485.   If any person convicted of an offence under section 476, 477, 478(1),
479, 480, 482 or 484 is again convicted of an offence under any of the said
sections, he shall be punishable for the second and for every subsequent offence
with  
30
[ simple imprisonment for a term which shall not be less than six months but
which may extend to three years and with fine ] .
Punishment not to be imposed in certain cases.
486.   No person shall be punishable for any failure referred to in section 476
or 477, irrespective of anything contained in that section, if he proves that
there was reasonable cause for such failure.
Offences by companies.
487 .   (1) If an offence under this Act has been committed by a company, 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 as
well as the company shall be deemed to be guilty of the offence and shall be liable
to be proceeded against and punished accordingly.
(2) The provisions of sub-section (1) shall not apply if the person referred therein
proves that the offence was committed without his knowledge or that he had exer -
cised all due diligence to prevent the commission of such offence.
(3) Irrespective of anything contained in sub-sections (1) and (2), where an offence
under this Act has been committed by a company and it is proved that the offence
has been committed with the consent or connivance of, or is attributable to any ne -
glect on the part of, any director, manager, secretary or other officer of the company,
such director, manager, secretary or other officer shall also be deemed to be guilty
of that offence and shall be liable to be proceeded against and punished accordingly.
(4) If an offence under this Act has been committed by a company and the
punishment for such offence is imprisonment and fine, then, without prejudice to
the provisions contained in sub-section (1) or (3), such company shall be punished
with fine and every person referred to in sub-section (1), or the director, manager,
secretary or other officer of the company referred to in sub-section (3), shall be liable
to be proceeded against and punished as per the provisions of this Act.
(5) For the purposes of this section,—
( a )   “company” means a body corporate and includes—
( i )   a firm; and
( ii )   an association of persons or a body of individuals, whether incor -
porated or not; and
( b )   “director”, in relation to—
( i )   a firm, means a partner in the firm;
( ii )   any association of persons or a body of individuals, means any
member controlling the affairs thereof.
30.   Substituted for “rigorous imprisonment for a term which shall not be less than six months
but which may extend to seven years, and with fine” by the Finance Act, 2026, w.e.f.   1-4-2026 .

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Offences by Hindu undivided family.
488 .   (1) Where an offence under this Act has been committed by a Hindu undivided
family, the   karta   thereof shall be deemed to be guilty of the offence and shall
be liable to be proceeded against and punished accordingly.
(2) Nothing contained in sub-section (1) shall render the   karta   liable to any pun -
ishment, if he proves that the offence was committed without his knowledge or
that he had exercised all due diligence to prevent the commission of such offence.
(3) Irrespective of anything contained in sub-sections (1) and (2), where an offence
under this Act, has been committed by a Hindu undivided family and it is proved
that the offence has been committed with the consent or connivance of, or is attrib -
utable to any neglect on the part of, any member of the Hindu undivided family,
such member shall also be deemed to be guilty of that offence and shall be liable
to be proceeded against and punished accordingly.
Presumption as to assets, books of account, etc., in certain cases.
489 .   (1) Where during the course of any search made under section 247, any money,
bullion, jewellery, virtual digit asset or other valuable article or thing (herein -
after referred to as the assets) or any books of account or other documents or any
information in electronic form as defined in section 261( g ) or on a computer system
as defined in section 261( e ) or any computer system containing the said information,
has or have been found in the possession or control of any person and such assets
or books of account or other documents or such information are tendered by the
prosecution in evidence against such person, or against such person and the person
referred to in section 484, for an offence under this Act, the provisions of section
247(7) shall, so far as may be, apply in relation to such assets or books of account
or other documents or such information.
(2) Where any assets or books of account or other documents any information
in electronic form or on a computer system or any computer system containing
the said information taken into custody from the possession or control of any
person, by the officer or authority referred to in section 248(1)( a ) or ( b ) or ( c )   are
delivered to the requisitioning officer under sub-section (2) of that section and such
assets, books of account or other documents or such information are tendered by
the prosecution in evidence against such person, or against such person and the
person referred to in section 484, for an offence under this Act, the provisions of
section 247(7) shall, so far as may be, apply in relation to such assets or books of
account or other documents or such information.
Presumption as to culpable mental state.
490 .   (1) In any prosecution for any offence under this Act, which requires a
culpable mental state on the part of the accused, the court shall presume the
existence of such mental state but it shall be a defence for the accused to prove the
fact that he had no such mental state with respect to the Act charged as an offence
in that prosecution.
(2) For the purposes of this section, the expression “culpable mental state” includes
intention, motive or knowledge of a fact or belief in, or reason to believe, a fact.

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(3) For the purposes of this section, a fact is said to be proved only when the court
believes it to exist beyond reasonable doubt and not merely when its existence is
established by a preponderance of probability.
Prosecution to be at instance of Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner.
491.   (1) A person shall not be proceeded against for an offence under section 473,
474, 475, 476, 477, 478, 479, 480, 481, 482, 483 or 484 except with the pre -
vious sanction of the Principal Commissioner or Commissioner or Commissioner
(Appeals) or Joint Commissioner (Appeals).
(2) The Principal Chief Commissioner or Chief Commissioner or Principal Director
General or Director General may issue such instructions or directions to the in -
come-tax authorities mentioned in sub-section (1) as he may deem fit for institution
of proceedings under that sub-section.
(3) A person shall not be proceeded against for an offence under section 478 or 482
in relation to the assessment for a tax year in respect of which the penalty imposed
or imposable on him under section 439 has been reduced or waived by an order
under section 469.
(4) Any offence under this Chapter may be compounded, either before or after
the institution of proceedings, by the Principal Chief Commissioner or Chief
Commissioner or a Principal Director General or Director General.
(5) Where any proceeding has been taken against any person under sub-section (1),
any statement made or account or other document produced by such person before
any income-tax authority specified in section 236( a ) to ( k ) shall not be inadmissible
as evidence for the purpose of such proceedings merely on the ground that—
( a )   such statement was made or such account or document was produced in
the belief that the penalty imposable would be reduced or waived, under
section 469; or
( b )   the offence for which such proceeding was taken would be compounded.
(6) The power of the Board to issue orders, instructions or directions under this Act
shall include the power to issue instructions or directions (including instructions
or directions to obtain the previous approval of the Board) to other income-tax
authorities for the proper composition of offences under this section.
Certain offences to be non-cognizable.
492 .   Irrespective of anything contained in the Bharatiya Nagarik Suraksha
Sanhita, 2023 (46 of 2023), an offence punishable under section 476, 478, 479,
480, 482 or 484 shall be deemed to be non-cognizable within the meaning of that
Sanhita.
Proof of entries in records or documents.
493 .   Entries in the records or other documents in the custody of an income-tax
authority shall be admitted in evidence in any proceedings for the prosecution
of any person for an offence under this Chapter, and all such entries may be proved
either by—
( a )   the production of the records or other documents in the custody of the
income-tax authority containing such entries; or