Immunity from Prosecution under Income Tax Law : Clause 519 of the Income Tax Bill, 2025 Vs. Section 291 of the Income-tax Act, 1961

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....tion, unearthing concealed income, and encouraging cooperation from persons involved in or privy to tax offences. This commentary provides an exhaustive analysis of Clause 519, its objectives, operational mechanics, and practical implications, followed by a detailed comparison with the existing regime u/s 291. The analysis also explores legislative intent, policy considerations, and the shifting legal landscape, especially in light of the replacement of the Indian Penal Code, 1860, with the Bharatiya Nyaya Sanhita, 2023. Objective and Purpose The underlying objective of both Clause 519 and Section 291 is to empower the Central Government with a discretionary tool to secure evidence against tax offenders by offering immunity from prosecuti....

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...." This broad language encompasses not only principal actors but also accomplices, facilitators, and those with knowledge of the offence. * Extent of Immunity: Immunity may be granted from prosecution for any offence under the Income Tax Act, the Bharatiya Nyaya Sanhita, 2023 (the new criminal code replacing the Indian Penal Code), or any other Central Act in force. Additionally, immunity from the imposition of penalty under the Income Tax Act may be granted, but only on the condition that the person makes "a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of payment of tax on income." * Conditional Nature: The grant of immunity is expressly conditional, hinging on the recipient's ....

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....23, reflects legislative adaptation to the new criminal law framework, replacing references to the Indian Penal Code. * Conditionality and Withdrawal: The provision's effectiveness hinges on the government's ability to withdraw immunity in instances of non-compliance, falsehood, or concealment, preserving the integrity of the process. * Administrative Discretion: The Central Government's discretion is broad but not unfettered, subject to statutory conditions and judicial scrutiny. Practical Implications The practical operation of Clause 519 has significant implications for various stakeholders: * For Taxpayers and Potential Offenders: The provision offers a route to immunity for individuals facing potential prosecution o....

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.... withdrawal. The language, sequence, and operative mechanics are largely unchanged. 2. Key Differences * Reference to Criminal Statute: * Section 291: Refers to the "Indian Penal Code (45 of 1860)" as the principal criminal statute. * Clause 519: Updates the reference to the "Bharatiya Nyaya Sanhita, 2023 (45 of 2023)," reflecting the legislative overhaul of the Indian criminal law framework. * Drafting Clarity and Modernization: * Clause 519 uses more contemporary legislative language and structure, improving clarity and consistency with other provisions in the new Bill. * The phraseology "under any other Central Act in force" is retained, but the reference to the updated criminal code is significant, as it ensures the contin....

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....thdrawal of immunity is not defined in detail, leaving scope for interpretation. 4. Policy and Legislative Continuity The near-verbatim reproduction of Section 291 in Clause 519 (save for the update to criminal law references) signals the legislature's satisfaction with the existing framework and its continued relevance. The provision's retention indicates that the government views the immunity mechanism as an effective and necessary tool in combating tax evasion. Comparative Perspective: Similar Provisions in Other Statutes The power to tender immunity is not unique to income tax law. Similar provisions exist in: * The Code of Criminal Procedure, 1973 (Section 306 and 307): Empowering courts and magistrates to grant immunity ....