Income Tax 2025

Appearance

Trial of offences as summons case. ​

497 ​

The Special Court, irrespective of anything contained in the Bharatiya Nagarik Suraksha Sanhita, 2023, shall try an offence under this Chapter punishable with imprisonment not exceeding two years or with fine, or with both, as a summons case, and the provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 as applicable in the case of trial of summons case, shall apply accordingly.

Explanation

Section Summary: ​

Section 497 of the new income tax law specifies that the Special Court will handle certain tax-related offences as "summons cases" if the offence is punishable with imprisonment of up to two years, a fine, or both. This section overrides any conflicting provisions in the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), and ensures that the trial process for such offences follows the procedures applicable to summons cases under the BNSS.

Key Changes: ​

  1. Introduction of Summons Case Treatment: Previously, tax-related offences might have been treated differently depending on the severity. This section explicitly mandates that offences punishable with up to two years of imprisonment or a fine (or both) will be tried as summons cases.
  2. Alignment with BNSS: The section ensures that the trial process aligns with the BNSS, which governs criminal procedures in India, but only for summons cases.

Practical Implications: ​

  1. Faster Resolution: Summons cases are generally simpler and faster to resolve compared to warrant cases, which involve more serious offences. This could lead to quicker resolutions for minor tax-related offences.
  2. Reduced Burden on Courts: By categorizing these offences as summons cases, the judicial system may experience reduced caseload pressure, as summons cases require fewer formalities and less court time.
  3. Impact on Taxpayers: Taxpayers accused of minor offences may benefit from a less cumbersome legal process, but they must still ensure compliance to avoid penalties.

Critical Concepts: ​

  1. Summons Case: A summons case is a type of criminal case where the offence is relatively minor, and the trial process is simpler. The court issues a summons (a legal notice) to the accused to appear, rather than an arrest warrant.
  2. Special Court: This refers to a court designated to handle specific types of cases, such as tax-related offences, to ensure expertise and efficiency in adjudication.
  3. Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS): This is the new criminal procedure code in India, replacing the earlier Code of Criminal Procedure (CrPC). It outlines the procedures for handling criminal cases, including summons cases.

Compliance Steps: ​

  1. Understand Offence Severity: Taxpayers and businesses should be aware of the nature of offences that fall under this section (punishable with up to two years of imprisonment or a fine).
  2. Prepare for Summons: If accused of such an offence, ensure timely response to court summons and follow the simplified trial process as per the BNSS.
  3. Maintain Documentation: Keep accurate records and documentation to defend against potential allegations of minor tax offences.

Examples: ​

  • Scenario 1: A small business owner fails to file their income tax return on time, leading to a fine. Since the offence is minor and punishable with a fine, it would be treated as a summons case under Section 497. The court would issue a summons, and the case would be resolved quickly without the need for a lengthy trial.
  • Scenario 2: An individual is accused of underreporting income, resulting in a penalty of up to two years of imprisonment. This case would also be tried as a summons case, ensuring a simpler and faster legal process compared to more serious tax evasion cases.