Failure to furnish return of income in search cases
[Section-480 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
If a person wilfully fails to furnish in due time the return of total income which is required to be furnished by notice given under section 294 (1)(a), he shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to three years and shall also be liable to fine.
FAQs on Section 480 of Income Tax Act 2025
What does Section 480 of the Income Tax Act, 2025 deal with?
Section 480 deals with the offence of wilfully failing to furnish a return of income when required to do so under a notice issued under Section 294(1)(a), specifically in search cases.
What is the penalty for failing to furnish a return of income under Section 480?
The penalty is imprisonment for a term not less than three months and which may extend up to three years. The person is also liable to a fine.
From when is Section 480 applicable?
Section 480 is applicable with effect from 1st April, 2026.
Is the punishment under Section 480 applicable for all failures to file returns?
No, it specifically applies to cases where there is a wilful failure to file a return of income in response to a notice issued under Section 294(1)(a), which generally pertains to search cases.
Can a person be punished under Section 480 if the failure to file the return was not wilful?
No, Section 480 applies only when the failure to furnish the return is wilful.
Does Section 480 apply to returns not covered under Section 294(1)(a)?
No, it applies exclusively to returns required under Section 294(1)(a), typically in connection with search operations.
Is there any minimum term of imprisonment prescribed under Section 480?
Yes, the minimum term of imprisonment prescribed is three months.
Is fine mandatory under Section 480 along with imprisonment?
Yes, in addition to imprisonment, the person shall also be liable to a fine.
Can the authorities waive the punishment under Section 480 if the person files the return late?
Section 480 mandates punishment for wilful failure. However, whether action is initiated may depend on the circumstances and discretion of the authorities, but the law does not explicitly provide for waiver once wilfulness is established.
What is the objective of introducing Section 480 in the Income Tax Act, 2025?
The objective is to ensure compliance in search-related cases by imposing strict penalties for non-filing of returns, thereby strengthening the enforcement mechanism.
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