Failure to comply with section 247(1)(b)(ii)
[Section-474 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
If a person, who is required to afford the authorised officer with the necessary facility to inspect the books of account or other documents under section 247(1)(b)(ii) fails to do so, he shall be punishable with rigorous imprisonment for a term which may extend to two years and shall also be liable to fine.
FAQs on Section 474 of Income Tax Act 2025
What is Section 474 of the Income Tax Act, 2025 about?
Section 474 deals with the penalty for failing to comply with Section 247(1)(b)(ii), which requires a person to provide necessary facilities for inspecting books of account or other documents.
Who is required to comply with Section 247(1)(b)(ii)?
Any person in possession or control of books of account or documents who is required by an authorised officer to facilitate their inspection is obligated to comply under Section 247(1)(b)(ii).
What constitutes a failure under Section 474?
Failure under Section 474 occurs when a person does not provide the authorised officer the necessary facility to inspect the books of account or other documents as required.
What is the punishment prescribed under Section 474?
The punishment includes rigorous imprisonment for a term which may extend to two years and also includes a fine.
Is the imprisonment under Section 474 mandatory or optional?
The section states that the person “shall be punishable,” indicating that imprisonment is mandatory upon conviction, though its duration may vary up to two years.
Is a fine imposed in addition to imprisonment under Section 474?
Yes, Section 474 specifically states that the person shall also be liable to a fine in addition to imprisonment.
Can a company or entity be punished under Section 474, or is it only for individuals?
While Section 474 refers to “a person,” the term “person” as per the Act includes individuals, companies, firms, associations, and other entities. Therefore, companies and entities can also be held liable.
From when is Section 474 applicable?
Section 474 is applicable from 1st April, 2026, as per the effective date mentioned in the Act.
Does intent or knowledge matter for punishment under Section 474?
Section 474 does not specify the need for intent or knowledge; it penalizes the act of failure itself. Thus, non-compliance alone can lead to punishment.
Is there any provision for appeal or relief against prosecution under Section 474?
Section 474 itself does not mention appeals or relief; however, general provisions related to prosecution, appeal, and compounding in the Act may apply depending on the case.
What is the objective behind introducing Section 474?
The objective is to enforce compliance with inspection requirements and ensure transparency in the maintenance and examination of financial documents.
Who is considered an ‘authorised officer’ under Section 247(1)(b)(ii)?
An authorised officer is someone empowered under the Act to carry out inspections and other investigative actions under Section 247.
Does Section 474 apply in cases of partial non-cooperation or only complete refusal?
Any failure to afford the necessary facility as required—whether partial or complete—may fall under the purview of Section 474, depending on the facts and the authorised officer’s assessment.
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