Report of Receipt Audit and Board's Inspection Team. - Income Tax - 1100/CBDT

INSTRUCTION NO. 1100/CBDT Dated : September 23, 1977 Section(s) Referred: 142(2A) ,276C(1) ,276C(2) ,276D , 35A(1) and 35A(2) of WT Act Statute: Income - Tax Act, 1961 The Taxation Laws (Amendment) Act, 1975, provides for prosecution in a case of (1) Wilful attempt to evade any tax, penalty or interest chargeable or impossable under I.T. Act (section 276C(1) inserted by section 68 of the amendment Act w.e.f. 1.10.75. (2) Wilful attempt to evade the payment of any tax, penalty or interest under I.T.Act (section 276C(2) inserted by section 68 of the amending Act w.e.f.1.10.75.) (3) Wilful failure to comply with the direction issued under section 142(2A) for getting the accounts audited (inserted in Section 276D by Section 69 of the amending Act w.e.f.1.4.76. Instruction No.1083,* circulated under Board's letter F.No.285/362/77-IT(INV) dated the 6th August, 1977, emphasises the need for initiating prosecution under section 276C(2) of the Income-tax Act, 1961 in all suitable cases. The Board desire that similar action should be taken under section 276 C(1) and 276D also, wherever necessary. 2. It will be noticed in this connection that the ambit of section 276C(1) is wider than that of section 277. Section 277 is attracted only where any verification made is false or where a false account or statement is delivered, whereas section 276C(1) extends to all cases of wilful attempts, in any; manner whatsoever, to evade any tax, penalty or interest chargeable or impossable under the Income-tax Act. For the purposes of Section 276C, wilful attempt to evade any tax etc. will include a case in which any person:- (i) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement; or (ii) makes or causes to be made any false entry or statement in such books of account or other documents; or (iii) wilfully omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or (iv) causes any other circumstance to exit which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or impossable under this Act or the payment thereof. 3. Provision similar to those contained in section 276C(1) and 276C(2) of the Income-tax Act have also been made in section 35A(1) and 35A(2) of the Wealth-tax Act, inserted by section 100 of the Taxation Laws (Amendment) Act, 1975. The instruction relating to the initiating of prosecution under the Income-tax Act shall apply mutatis mutandis to proceedings under the Wealth-tax Act also.