Power to tender immunity from prosecution.
519(1)
The Central Government may, if it is of the opinion that with a view to obtaining the evidence of any person appearing to have been directly or indirectly concerned in or privy to the concealment of income or to the evasion of payment of tax on income it is necessary or expedient so to do, for reasons to be recorded in writing, tender to such person,—
- (a) immunity from prosecution for any offence under this Act or under the Bharatiya Nyaya Sanhita, 2023, or under any other Central Act in force; and
- (b) from imposition of any penalty under this Act on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of payment of tax on income.
519(2)
A tender of immunity made to, and accepted by, the person concerned, shall, to the extent to which the immunity extends, render him immune from prosecution for any offence in respect of which the tender was made, or from the imposition of any penalty under this Act.
519(3)
If it appears to the Central Government that any person to whom immunity has been tendered under this section––
- (a) has not complied with the conditions on which the tender was made; or
- (b) is wilfully concealing anything; or
- (c) is giving false evidence, the Central Government may record a finding to that effect, and thereupon the immunity shall be deemed to have been withdrawn.
519(4)
The person whose immunity has been withdrawn under sub-section (3) may be tried for the offence in respect of which the tender of immunity was made or for any other offence of which he appears to have been guilty in connection with the same matter and shall also become liable to imposition of any penalty under this Act to which he would otherwise have been liable.
Section Summary:
Section 519 of the new income tax law grants the Central Government the authority to offer immunity from prosecution and penalties to individuals who provide full and truthful disclosures about their involvement in concealing income or evading tax. This provision is designed to encourage cooperation in uncovering tax evasion and related offenses.
Key Changes:
- Expanded Scope of Immunity: The section now includes immunity from prosecution under the Bharatiya Nyaya Sanhita, 2023, in addition to the Income Tax Act and other Central Acts. This broadens the protection offered to individuals who cooperate.
- Conditional Immunity: Immunity is contingent upon the individual making a full and true disclosure of their involvement in tax evasion or concealment of income.
- Withdrawal of Immunity: The Central Government can withdraw immunity if the individual fails to comply with the conditions, conceals information, or provides false evidence.
Practical Implications:
- For Taxpayers: Individuals involved in tax evasion or concealment of income now have an incentive to come forward and disclose their actions in exchange for immunity from prosecution and penalties.
- For the Government: This provision strengthens the government’s ability to gather evidence and combat tax evasion by encouraging voluntary disclosures.
- For Enforcement Agencies: The section provides a legal framework to negotiate with individuals involved in tax-related offenses, potentially reducing the burden of litigation.
Critical Concepts:
- Immunity from Prosecution: This means the individual will not face criminal charges for the disclosed offenses under the Income Tax Act, Bharatiya Nyaya Sanhita, 2023, or other Central Acts.
- Full and True Disclosure: The individual must provide complete and accurate information about their involvement in tax evasion or concealment of income.
- Withdrawal of Immunity: If the individual violates the conditions of immunity (e.g., by lying or withholding information), the immunity can be revoked, and they may face prosecution and penalties.
Compliance Steps:
- Disclosure: Individuals seeking immunity must provide a full and true disclosure of their involvement in tax evasion or concealment of income.
- Acceptance of Immunity: The individual must formally accept the immunity offer from the Central Government.
- Adherence to Conditions: The individual must comply with all conditions of the immunity, including providing truthful and complete information.
- Avoiding Misconduct: The individual must not conceal information or provide false evidence, as this could lead to the withdrawal of immunity.
Examples:
- Scenario 1: Mr. A is involved in concealing income from a business. The Central Government offers him immunity from prosecution and penalties if he discloses all details about the concealment. Mr. A accepts the offer, provides a full disclosure, and avoids prosecution.
- Scenario 2: Ms. B accepts immunity but later provides false evidence about her involvement in tax evasion. The Central Government withdraws her immunity, and she is prosecuted for the original offense and any additional offenses related to the false evidence.
This section provides a structured mechanism for resolving tax evasion cases while balancing enforcement and cooperation.