CHAPTER XXII OFFENCES AND PROSECUTION

Contravention of order made under section 247.

473

Whoever contravenes any order referred to in section 247(1)(viii) or (4) shall be punishable with rigorous imprisonment which may extend to two years and shall also be liable to fine.

Explanation

Section Summary:

Section 473 of the Income Tax Act deals with penalties for contravening orders issued under Section 247(1)(viii) or (4). Specifically, it imposes strict consequences, including imprisonment and fines, for non-compliance with such orders. This section is part of Chapter XXII, which focuses on offences and prosecution under the Income Tax Act.

Key Changes:

This section is a new addition to the Income Tax Act, introducing criminal liability for violating orders under Section 247(1)(viii) or (4). Previously, such contraventions may have been addressed through administrative penalties or civil proceedings, but now they carry the risk of criminal prosecution, including imprisonment.

Practical Implications:

1. For Taxpayers and Businesses: Non-compliance with orders issued under Section 247(1)(viii) or (4) can now lead to severe consequences, including rigorous imprisonment of up to two years and fines. This increases the stakes for adhering to such orders.
2. For Tax Authorities: This provision strengthens the enforcement mechanism, allowing authorities to prosecute non-compliant individuals or entities more effectively.
3. For Compliance Processes: Taxpayers must ensure strict adherence to orders issued under Section 247 to avoid criminal liability. This may require heightened diligence in understanding and implementing such orders.

Critical Concepts:

• Section 247(1)(viii): This likely refers to specific orders issued by tax authorities, such as directives related to tax assessments, recovery, or other compliance matters.
• Section 247(4): This may pertain to orders related to specific procedural or administrative requirements under the Income Tax Act.
• Rigorous Imprisonment: This is a form of imprisonment with hard labor, indicating the seriousness of the offence.

Compliance Steps:

1. Understand the Order: Carefully review any order issued under Section 247(1)(viii) or (4) to ensure full comprehension of the requirements.
2. Implement the Order: Take immediate steps to comply with the order, whether it involves payment, documentation, or other actions.
3. Maintain Records: Keep detailed records of compliance efforts to demonstrate adherence if questioned by authorities.
4. Seek Clarification if Needed: If the order is unclear, proactively seek clarification from the issuing authority to avoid unintentional contravention.

Examples:

• Scenario 1: A taxpayer receives an order under Section 247(1)(viii) to pay outstanding taxes within 30 days. If the taxpayer fails to comply, they could face rigorous imprisonment of up to two years and a fine.
• Scenario 2: A business is issued an order under Section 247(4) to submit specific financial documents. If the business ignores the order, the responsible individuals could be prosecuted under Section 473.

This section underscores the importance of strict compliance with tax authorities' orders to avoid severe legal consequences.