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CA Final · Direct Tax Laws & International Taxation · Tax Planning, Tax Avoidance and Tax Evasion

Meridian Textiles Pvt Ltd, an Indian company, is under investigation for concealing income. Mr. Anand Rao, its former accounts head, was privy to the concealment. The Central Government wants his evidence and, for reasons recorded in writing, tenders him immunity from prosecution and penalty on condition of full and true disclosure. Which statement is correct under the Income-tax Act, 2025 (section 519)?

Under section 519, the Central Government may, for reasons recorded in writing, tender immunity from prosecution under the Income-tax Act, the Bharatiya Nyaya Sanhita, 2023 and other Central Acts, and from penalty, provided the person makes a full and true disclosure of the concealment or evasion.

  1. AImmunity can be tendered only for offences under the Income-tax Act, not under any other Central Act
  2. BImmunity can cover prosecution under the Act, the Bharatiya Nyaya Sanhita, 2023 and other Central Acts, and penalty under the Act, on condition of full and true disclosureCorrect
  3. CImmunity can be tendered only by the Assessing Officer without any written reasons
  4. DImmunity can never be withdrawn once the tender is accepted

Explanation

Section 519(1) lets the Central Government, for reasons recorded in writing, tender immunity from prosecution under the Act, the Bharatiya Nyaya Sanhita, 2023 or any other Central Act, and from penalty under the Act, conditional on full and true disclosure. The first option is wrong because the immunity extends beyond this Act. Withdrawal is possible under sub-section (3).

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