Disclosure of particulars by public servants.

494(1)

A public servant, who furnishes any information or produces any document in contravention of the provisions of section 258(3), shall be punishable with imprisonment which may extend to six months and shall also be liable to fine.

494(2)

No prosecution shall be instituted under this section except with the previous sanction of the Central Government.

Explanation

Section Summary:

This section deals with the consequences for public servants who disclose information or produce documents in violation of Section 258(3) of the Income Tax Act. It imposes penalties, including imprisonment and fines, for such actions. Additionally, it mandates that any prosecution under this section requires prior approval from the Central Government.

Key Changes:

• New Penalty Provision: This section introduces a specific penalty for public servants who contravene Section 258(3), which was not explicitly outlined in the prior Income Tax Act.
• Central Government Sanction: Prosecution under this section now requires prior approval from the Central Government, adding a layer of oversight.

Practical Implications:

• For Public Servants: Public servants must ensure strict compliance with Section 258(3) when handling sensitive information or documents. Non-compliance could lead to imprisonment (up to six months) and fines.
• For the Central Government: The requirement for prior sanction before prosecution ensures that cases are reviewed at a higher level, potentially reducing frivolous or politically motivated prosecutions.

Critical Concepts:

• Section 258(3): This likely refers to provisions restricting the disclosure of confidential taxpayer information by public servants. Violating these restrictions triggers penalties under Section 494.
• Public Servant: Refers to individuals employed by the government or public authorities who have access to sensitive taxpayer information.

Compliance Steps:

1. Training and Awareness: Public servants should be trained on the restrictions under Section 258(3) to avoid inadvertent violations.
2. Document Handling: Ensure proper protocols are followed when handling or disclosing taxpayer information.
3. Reporting Violations: Any suspected violations should be reported internally to prevent legal consequences.

Examples:

• Scenario 1: A tax officer shares confidential taxpayer data with an unauthorized third party. Under Section 494(1), this officer could face up to six months in prison and a fine.
• Scenario 2: Before prosecuting the officer, the Central Government must grant approval, ensuring the case is reviewed for legitimacy.

This section emphasizes the importance of safeguarding taxpayer information and introduces stricter accountability for public servants.