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Article Dated 23th February, 2023


In the present day and age filing of ITR has become almost a compulsion even if one is not legally required to do so as it is akin to a doorway to the financial world. Non filing of ITR might lead to higher deduction or collection of taxes, non-availability of bank finances and might lead to difficulty in applying for government or even private sector tenders. But still multiple instances can be found where assessee do not file their return. Such non filing may be on account of ignorance of tax laws or some cases where assessee was prevented by some genuine cause such as medical illness or a case where assessee wilfully does not file ITR with the intention of hoarding information or evading payment of taxes.

Statues usually resort to imposing penalties to punish wilful or negligent behaviour but the same have not proved to be sufficient and therefore there arises a need for imprisonment of such defaulters. Section 276CC of The Income Tax Act, 1961 therefore proves to be a very necessary weapon in the arsenal of the department.

As per Section 276CC if a person wilfully fails to file his return of income u/s 139(1) or post receipt of notice u/s 142(1) or 148/153A he/she may be punished with imprisonment as under-




Where the amount of tax sought to be evaded exceeds Rs. 25 Lakhs

Rigorous Imprisonment of minimum 6 months

Rigorous Imprisonment of upto 7 years

In any other case i.e. where the amount of tax sought to be evaded does not exceed Rs. 25 Lakhs

Rigorous Imprisonment of minimum 3 months

Rigorous Imprisonment of upto 2 years

However it has been provided that no proceeding for imprisonment shall be initiated where amount of tax involved after giving effect to Advanced Tax/Self-assessment Tax, TDS/TCS does not exceed Rs. 10,000/-.

Also, it has been provided that no proceeding for imprisonment shall be initiated where an assessee rectifies its mistake by filing a belated return u/s 139(4) i.e. files the return of income before the end of relevant Assessment Year or files an updated return u/s 139(8A).

Recently a Mumbai Court while trying an offence under this section in it’s order dt. 30.01.2023 stated – “The accused undoubtedly failed to comply with the notice under Section 153A and therefore, is an offender under Section 276CC also that in a prosecution of offence as in the instant case it can be well presumed the existence of mens rea and it is for the accused to prove the contrary”

In the instant case Hema Chetan Shah was issued notice u/s 153A calling upon to file return of income within 30 days. Assessee was a director in a company whose return has been filed but assessee failed to file his own return of income. Despite issue of notice u/s 153A assessee failed to file his return and therefore the Addition Sessions Judge refused to interfere with the judgement of Trial Court and upheld the proceedings of imprisonment.

It is worth noting that a proceeding for non-filing of tax return shall only be initiated when it can be clearly established that such non filing was wilful and there was an intention to evade taxes. It is essential to establish means rea on the part of defaulting assessee for instituting a proceeding under this section.

CA Pranay Jain is a young and aspiring Chartered Accountant. He qualified Chartered Accountancy Course in 2021 and has a well-established practice in various fields of taxation and auditing, with his core area of practice being in the field of litigation i.e., handling assessment and appeal-related matters and representing assesses before various tax departments.

He is also socially active on LinkedIn at

CA Pranay Jain
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