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of <h1>Income Tax Bill 2025 Clause 486 narrows reasonable cause defense compared to current Section 278AA coverage</h1> The Income Tax Bill 2025's Clause 486 and the Income-tax Act 1961's Section 278AA both provide a 'reasonable cause' defense against criminal liability for tax-related failures. Clause 486 applies to failures under sections 476 and 477 of the new Bill, while Section 278AA covers failures under sections 276A, 276AB, 276B, and 276BB of the current Act. Both provisions require the accused to prove reasonable cause existed for non-compliance. The defense operates as a non obstante clause, overriding penal consequences when successfully invoked. While sharing similar objectives of balancing deterrence with fairness, Clause 486 has a narrower scope than Section 278AA, potentially limiting its protective coverage for taxpayers.
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