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

Ravi Sharma, a director of Kapoor Traders Pvt Ltd, is privy to concealment of income by the company. The Central Government, for reasons recorded in writing, tenders him immunity from prosecution and penalty on condition of full and true disclosure. Later it finds that Ravi is giving false evidence. What is the consequence under section 519 of the Income-tax Act, 2025?

The Central Government may record a finding that Ravi gave false evidence, and the immunity is then deemed withdrawn. Ravi can be tried for the offence and any other offence connected with the same matter, and he also becomes liable to the penalty he would otherwise have faced.

  1. AImmunity stays valid, but only a fine is levied
  2. BThe Government may record a finding and the immunity is deemed withdrawn; Ravi may be tried and become liable to penaltyCorrect
  3. CImmunity is withdrawn only for the penalty and not for prosecution
  4. DImmunity is withdrawn only after a court convicts Ravi of giving false evidence

Explanation

Under section 519(3), if a person gives false evidence the Central Government may record a finding and the immunity is deemed withdrawn. Section 519(4) then allows trial for the offence and for related offences, and penalty becomes leviable. No court conviction is needed first.

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