Chapter XXII - Offences and Prosecution
Section 479
Section 479: failure to furnish returns of income
Section 479 makes it a criminal offence to wilfully fail to furnish a return of income in due time, where that return is required under section 263(1) or by a notice given under section 268(1) or 280. The punishment depends on the amount of tax that would have been evaded had the failure not been discovered, and the section also sets out situations where a person cannot be prosecuted for the failure at all.
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Need advice on Section 479?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) If a person wilfully fails to furnish in due time the return of income, which is required to be furnished under section 263(1), or by notice given under section 268(1) or 280, he shall be punishable,—
(a) with simple imprisonment for a term up to two years, or with fine, or with both, where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds fifty lakh rupees; or
(b) with simple imprisonment for a term up to six months, or with fine, or with both, where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds ten lakh rupees but does not exceed fifty lakh rupees; or
(c) with fine, in any other case.
(2) A person shall not be proceeded against under sub-section (1) for failure to furnish in due time the return of income under section 263(1) for any tax year, if—
(a) a return is furnished by him under section 263(4) or 263(6); or
(b) the tax payable by such person, not being a company, on the total income determined on regular assessment, as reduced by the advance tax or self-assessment tax, if any, paid before the expiry of period specified under section 263(4), and any tax deducted or collected at source, does not exceed ₹10000.
Introduction
Section 479 applies to wilful late non-filing of a return required under section 263(1) or notices under sections 268(1) or 280. The 2026 amendment made punishment depend on the tax that would have been evaded if the failure had gone undetected.
Key takeaways
Wilfulness and return duty
The failure must be wilful and concern a return required by a named provision or notice.
Current tiers
Punishment varies above ₹50 lakh, above ₹10 lakh through ₹50 lakh, and in other cases.
Subsection (2) carve-out
For section 263(1) returns, the statute specifies later-return and small-tax situations in which proceedings under subsection (1) do not follow.
The offence and punishment
"If a person wilfully fails to furnish in due time the return of income, which is required to be furnished under section 263(1), or by notice given under section 268(1) or 280, he shall be punishable,--"
- With simple imprisonment for a term up to two years, or with fine, or with both - where the amount of tax which would have been evaded (if the failure had not been discovered) exceeds fifty lakh rupees.
- With simple imprisonment for a term up to six months, or with fine, or with both - where that amount of tax exceeds ten lakh rupees but does not exceed fifty lakh rupees.
- With fine, in any other case.
When a person cannot be prosecuted under this section
A person shall not be proceeded against under sub-section (1) for failing to furnish in due time the return of income under section 263(1) for any tax year, if:
- A return is furnished by him under section 263(4) or 263(6); or
- The tax payable by such person, not being a company, on the total income determined on regular assessment - reduced by advance tax or self-assessment tax already paid before the expiry of the period specified under section 263(4), and any tax deducted or collected at source - does not exceed ₹10,000.
Recent change to the punishment structure
The Act's footnotes record that clauses (a), (b) and (c) above were substituted for an earlier two-clause structure by the Finance Act, 2026, with effect from 1 April 2026. The earlier wording provided rigorous imprisonment of not less than six months (extendable to seven years) with fine where the evaded tax exceeded twenty-five lakh rupees, and imprisonment of not less than three months (extendable to two years) with fine in any other case.
Step-by-step flow for applying Section 479
- 1
Which return was not furnished in due time?
A return required under section 263(1), or by notice under section 268(1) or section 280.
- None of these: Section 479 does not apply.
- One of these: Go to the next step.
- 2
Was the failure wilful?
Only a wilful failure is an offence. Section 490 lets the court presume the culpable mental state, and the accused may prove there was none.
- Not wilful (proved): No offence under Section 479.
- Wilful: Go to the next step.
- 3
For a section 263(1) return, does Section 479(2) bar proceedings?
No proceedings if (a) a return is furnished under section 263(4) or 263(6); or (b) for a person other than a company, tax on total income determined on regular assessment, less advance tax or self-assessment tax paid before the expiry of the period under section 263(4) and less TDS/TCS, does not exceed ₹10,000.
- Yes: The person is not proceeded against under Section 479(1).
- No, or it is a notice return: Go to the next step.
- 4
What tax would have been evaded had the failure not been discovered?
Above ₹50 lakh: simple imprisonment up to two years, or fine, or both. Above ₹10 lakh but not above ₹50 lakh: simple imprisonment up to six months, or fine, or both. Any other case: fine only. The Act does not state the amount of the fine here.
Practical checklist
Do
- Identify whether the return was required under section 263(1), a section 268(1) notice or section 280, and retain the due-date and filing evidence relevant to alleged wilfulness.
- For a section 263(1) failure, check the subsection (2) later-return alternative and, for a non-company person, the specified tax computation and payment dates.
Avoid
- Do not apply subsection (2) automatically to a failure to comply with a return notice under section 268(1) or 280: its stated carve-out concerns section 263(1).
Illustrative example
Worked example: the ₹10,000 test in Section 479(2)(b)
Hypothetical facts (illustration only, not a real taxpayer): Mr. Rao, an individual, wilfully did not furnish his section 263(1) return for a tax year and did not file under section 263(4) or 263(6). On regular assessment, tax on his total income is ₹38,000. He paid advance tax of ₹10,000 before the expiry of the section 263(4) period, and tax of ₹20,000 was deducted at source. All amounts are assumed.
Section 479(2)(a)
No return was furnished under section 263(4) or 263(6), so clause (a) does not help.
Section 479(2)(b)
He is not a company. Net tax = ₹38,000 − ₹10,000 − ₹20,000 = ₹8,000.
Result
₹8,000 does not exceed ₹10,000, so he is not to be proceeded against under Section 479(1).
Variation
If TDS had been ₹15,000, net tax would be ₹38,000 − ₹10,000 − ₹15,000 = ₹13,000, above ₹10,000. The bar would not apply, and the tier would depend on the tax that would have been evaded.
Outcome
- On the main facts the Section 479(2)(b) bar applies.
- A company cannot use the ₹10,000 test in Section 479(2)(b).
Frequently asked questions
Is every late return of income a criminal offence under Section 479?
No. Section 479 requires a wilful failure to furnish the return in due time. For failure to file a section 263(1) return, subsection (2) specifies a later-return alternative under section 263(4) or (6), and a separate small-tax alternative for a non-company person using the stated assessment, payment-date and tax-credit conditions. That carve-out is not stated for failures under the section 268(1) or 280 notices.
What determines the severity of punishment under Section 479?
The amount of tax that would have been evaded if the failure had not been discovered - imprisonment up to two years (or fine, or both) above ₹50 lakh, up to six months (or fine, or both) where the amount exceeds ₹10 lakh but does not exceed ₹50 lakh, and fine in any other case.
Need help applying this provision to your situation?
Talk to our tax team about a return-filing noticeLast updated 10 October 2026