Provisions of section 287 of Income tax Act. - Income Tax - 382/CBDT

INSTRUCTION NO. 382/CBDT Dated: February 15, 1972 Section(s) Referred: 287 Statute: Income - Tax Act, 1961 The Government has viewed with concern the lenient punishments very frequently awarded by the Courts for economic offences and in particular for offences under the Income-tax Act. The Board has examined the reasons for lenient punishments awarded by Courts. These are as under : (i) The Department has failed to lead evidence before the Courts in respect of penalties imposed in the past for concealment of income or other contumacious conduct of the accused. (ii) The attitude of the prosecution Counsels of the Department in being satisfied with a conviction and not impressing on the Court the need for a deterrent punishment with convincing arguments. (iii) The plea of the defence Counsels is accepted that the punishment on conviction should be lenient in view of the fact that monetary penalties under the Income-tax Act have already been imposed for the same offence. (iv) The view taken by some Courts that discretion to award rigorous imprisonment upto 6 months is wide enough to impose the punishment of imprisonment till the rising of the Court. Such punishment from its very nature dose not involved hard labour and therefore, cannot amount to rigorous imprisonment. (v) In some cases deterrent fines were not imposed because such fines exceeded the monetary limits of the Magistrate's power to impose fine. (vi) Offences under the Income-tax Act are not generally viewed as serious offences. The Board had, in Instruction nos. 271 and 302, referred to some of the above aspects with a view of ensuring that tax evaders do not get away with lenient punishments. 2. The matter has been further considered by the Board. It is felt that offences under the Income-tax Act are not temporary aberrations arising out of economic distress as in the case of offences against property or arising out of emotions getting the better of one's reason as in the case of offences against persons but ordinarily such Income-tax offences are pre-mediated, well-planned and against the society as a whole. Therefore such offences deserve to be severely dealt with. The Board, therefore, desired that wherever a lenient punishment is given by a court the opinion of the prosecution Counsel should be obtained with a view to going up in appeal or revision and a report sent to the Board along with the opinion. The Board also desires that it should be impressed upon the prosecution Counsels that the very purpose of prosecuting a tax evader would be defeated if the accused is convicted but given a lenient punishment and, therefore, they should impress upon the Court the seriousness of the offence the past record in the matter of tax evasion, the fact that imprisonment till the rising of the Court does not constitute rigorous imprisonment as it does not involve any hard labour as also the point that penalties imposed under the income-tax Act should not be taken into consideration in determining the quantum of punishment as the Legislature has clearly specified the punishment in addition to the penalties imposable under the Income-tax Act. In case the fine imposable or the punishment to be imposed exceeds the powers of the Magistrate in this matter, the Court should be requested to commit the case to the Sessions for a trial.