Section 491 — Prosecution to be at Instance of PCCIT-PCIT | ITA 2025

Section 491 of the Income-tax Act, 2025 corresponds to s. 279 of the Income-tax Act, 1961. STATUTORY ARCHITECTURE No prosecution without prior sanction of PCCIT/CCIT/PCIT/CIT. Subsection (2) provides for compounding either before or after…

Section 491 — - PROSECUTION TO BE AT INSTANCE OF PCCIT-PCIT

Section 491 of the Income-tax Act, 2025 corresponds to s. 279 of the Income-tax Act, 1961.

Statutory text — Income-tax Act, 2025

(1) A person shall not be proceeded against for an offence under section 473, 4 74, 475, 476, 477, 478, 479, 480, 481, 482, 483 or 484 except with the pre- vious sanction of the Principal Commissioner or Commissioner or Commissioner (Appeals) or Joint Commissioner (Appeals).

(2) The Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General may issue such instructions or directions to the in- come-tax authorities mentioned in sub-section (1) as he may deem fit for institution of proceedings under that sub-section.

(3) A person shall not be proceeded against for an offence under section 478 or 482 in relation to the assessment for a tax year in respect of which the penalty imposed or imposable on him under section 439 has been reduced or waived by an order under section 469.

(4) Any offence under this Chapter may be compounded, either before or after the institution of proceedings, by the Principal Chief Commissioner or Chief Commissioner or a Principal Director General or Director General.

(5) Where any proceeding has been taken against any person under sub-section (1), any statement made or account or other document produced by such person before any income-tax authority specified in section 236(a) to (k) shall not be inadmissible as evidence for the purpose of such proceedings merely on the ground that—

(a) such statement was made or such account or document was produced in the belief that the penalty imposable would be reduced or waived, under section 469; or

(b) the offence for which such proceeding was taken would be compounded.

(6) The power of the Board to issue orders, instructions or directions under this Act shall include the power to issue instructions or directions (including instructions or directions to obtain the previous approval of the Board) to other income-tax authorities for the proper composition of offences under this section. Certain offences to be non-cognizable.

STATUTORY ARCHITECTURE

No prosecution without prior sanction of PCCIT/CCIT/PCIT/CIT. Subsection (2) provides for compounding either before or after launch -- on payment of compounding fee + tax + interest. Compounding regime articulated in CBDT Circular dt 17-10-2024 (latest revision) tiering offences and fees.

PRACTITIONER PLANNING NOTES

Sanction order must be reasoned -- challengeable via writ if mechanical.
Compounding rates: 12% to 200% depending on offence gravity, stage of proceedings, history.
FA 2024 + CBDT 2024 Circular: liberalised compounding; multiple offences in single application; reduced fees; eligible offences expanded.
Time-bound disposal: compounding application must be processed within 12 months.

CROSS-REFERENCES

s. 491 [279] -- sanction and compounding.
s. 486 [278AA] -- reasonable cause.
s. 487 [278B] -- offences by companies.
s. 490 [278E] -- presumption of culpable mental state.

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
2025 provision	1961 counterpart
s. 491 -- Prosecution to be at Instance of PCCIT-PCIT	s. 279