Comparison of section 487 "Abetment of false return, etc." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Bill: notably, an expanded non-reliance clause in sub-section (3) and slightly different framing in sub-section (2). Affected parties include companies and persons in managerial or controlling positions (directors, managers, secretaries, other officers, partners, controlling members). Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: the title indicates this provision falls under "Offences and Prosecution" of the Income-tax statute of 2025. Both texts define the circumstances in which a company and specified persons are deemed guilty of an offence under the Act and prescribe liability when offences are committed by companies. Definitions provided in sub-section (5) (Bill) / (5) (Act) define "....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rectors/officers where consent/connivance/neglect is established (sub-section (3)). The enacted text's phrasing in sub-section (3) - prefacing the paragraph with "Irrespective of anything contained in sub-section (1) and (2)" - signals a legislative intention to make sub-section (3) operate notwithstanding the defences or deeming in (1) and (2). The Bill's version limits the non-reliance to sub-section (1) only. That drafting distinction affects how sub-section (2)'s due diligence defence interacts with personal liability under sub-section (3). Exceptions/Provisos Sub-section (2) provides a statutory defence for persons deemed guilty under sub-section (1): the person must prove either (a) the offence was committed without his ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....cal Impact * Scope of non-reliance in sub-section (3): The Bill (old version) states sub-section (3) applies "irrespective of the provisions of sub-section (1)" (i.e., it carves out directors/etc. from the deeming rule in (1)). The enacted Act expands that to "Irrespective of anything contained in sub-section (1) and (2)". * Practical impact: Under the Act text, sub-section (3) operates notwithstanding both the deeming in (1) and the due diligence defence in (2). This means that where consent/connivance/neglect is proved, the officer cannot rely on the due diligence defence in (2) to avoid being "deemed to be guilty", thereby narrowing the scope of the due diligence escape for officers in those circumstances. * Wording of sub-section ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tes "For the purposes of this section". Substantively the same. * Practical impact: None substantive. Practical Implications * Compliance and risk: Under the enacted text, officers and persons in charge face increased exposure where an offence is proved to have been committed with their consent, connivance or attributable to neglect - they will be deemed guilty irrespective of a previously available due diligence defence. Companies and those in charge should be aware that proving "due diligence" may not be an operative shield where allegations of consent/connivance/neglect are made. The Bill's earlier formulation potentially left more room for invoking sub-section (2) against allegations in (3); that protection is narrowed in the A....