Criminal Prosecution under Income Tax Law: Part II

The Income tax legislation, as you may be aware, considers certain lapses and offenses as more serious and subjects the offender to a penal action that can involve imprisonment. In the recent past, there has been a sharp increase in the launch of prosecution proceedings, especially in cases relating to non-compliance of TDS/TCS provisions under the Income Tax Act (‘IT Act’).

With the advent of technology and development of risk management strategy, the Income tax Department is in complete possession of all information related to taxpayers that even the slightest of non-compliance would alert the radar of the tax authorities, leading to launch of prosecution proceedings.

In Part I of this webinar series conducted on 19th of August 2025, we explored the fundamentals of prosecution under the Income Tax Act, including what constitutes prosecution, the offences that trigger it, and the relevant legal provisions, circulars, and guidelines. We also discussed the checks and balances companies and individuals should maintain to avoid prosecution, the process of initiating prosecution proceedings, and the liability of directors in such cases.

In Part II, we will move forward to examine the following topics:

• Remedies available to challenge prosecution proceedings
• The concept and process of compounding offences, and relevant jurisprudence in tax laws.
• Interplay between the Income Tax Act and other laws such as the Indian Penal Code (IPC), Criminal Procedure Code (CrPC), and the Indian Evidence Act.

Speakers –

Bharathi K Prasad, Director, LKS

Janane G, Associate, Partner, LKS