Sections 491 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Before a person can be prosecuted for the main offences in Chapter XXII, section 491 of the Income-tax Act, 2025 requires the previous sanction of a named senior authority; it also deals with compounding and with the use of statements made before income-tax authorities. Sections 492 to 494 cover the nature of the offences, how entries in official records are proved, and the punishment for a public servant who discloses protected particulars. For help with a prosecution matter, see legal dispute resolution.
This explanation is as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026. Under section 1(3) the Act came into force on the 1st April, 2026, save as otherwise provided. Later amendments, rules and notifications should be checked.
A person cannot be proceeded against for an offence under sections 473 to 484 without the previous sanction of the authority named in section 491(1). Any offence under the Chapter may be compounded, before or after proceedings begin, by the authority named in section 491(4). Offences under sections 476, 478, 479, 480, 482 and 484 are deemed non-cognizable. A public servant who discloses information in breach of section 258(3) is punishable with simple imprisonment up to one month, or fine, or both, and prosecution needs the Central Government's previous sanction.
Section 491: sanction, instructions and compounding
Sub-section (1): previous sanction
A person shall not be proceeded against for an offence under section 473, 474, 475, 476, 477, 478, 479, 480, 481, 482, 483 or 484 except with the previous sanction of the "Principal Commissioner or Commissioner or Commissioner (Appeals) or Joint Commissioner (Appeals)", in the words printed in the sub-section. The heading of section 491 is printed with a longer list of authorities (Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner); the operative text of sub-section (1) is the list above, and the difference is a drafting point to check against the official text.
The offences in sections 473 to 484 are the principal offences of the Chapter. For three of them see our notes on section 476 (tax deducted but not paid), section 478 (wilful attempt to evade tax) and section 479 (failure to furnish a return).
Sub-section (2): instructions
The Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General may issue such instructions or directions to the income-tax authorities mentioned in sub-section (1) as he may deem fit for the institution of proceedings under that sub-section.
Sub-section (3): the link with penalty waiver
A person shall not be proceeded against for an offence under section 478 or 482 in relation to the assessment for a tax year for which the penalty imposed or imposable on him under section 439 has been reduced or waived by an order under section 469. The penalty itself is explained in our note on section 439.
Sub-section (4): compounding
Any offence under this Chapter may be compounded, either before or after the institution of proceedings, by the Principal Chief Commissioner or Chief Commissioner or a Principal Director General or Director General. The sub-section covers "any offence under this Chapter", wider than the list in sub-section (1).
Sub-section (5): statements and documents
Where proceedings have been taken under sub-section (1), any statement made, or account or other document produced, by the person before an income-tax authority specified in section 236(a) to (k) shall not be inadmissible as evidence in those proceedings merely because:
- the statement was made or the document produced in the belief that the penalty imposable would be reduced or waived under section 469; or
- the offence for which the proceeding was taken would be compounded.
Sub-section (6): Board's directions
The Board's power to issue orders, instructions or directions under the Act includes the power to issue instructions or directions, including to obtain the previous approval of the Board, to other income-tax authorities for the proper composition of offences under this section.
| Sub-section | What it provides |
|---|---|
| 491(1) | Previous sanction for offences under sections 473 to 484 |
| 491(2) | Instructions for institution of proceedings |
| 491(3) | No proceedings under section 478 or 482 for a tax year where penalty under section 439 is reduced or waived by order under section 469 |
| 491(4) | Compounding of any offence under the Chapter |
| 491(5) | Statements and documents not inadmissible merely for the stated reasons |
| 491(6) | Board's power to give directions on composition |
Section 492: certain offences to be non-cognizable
Irrespective of anything in the Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), an offence punishable under section 476, 478, 479, 480, 482 or 484 is deemed to be non-cognizable within the meaning of that Sanhita. The Act names that Sanhita only to set the classification; the Sanhita is another law and its procedure should be checked separately. The listed offences are therefore non-cognizable, and the other offences of the Chapter are not covered by this deeming provision.
Section 493: proof of entries in records or documents
Entries in records or other documents in the custody of an income-tax authority are admitted in evidence in any prosecution for an offence under this Chapter. They may be proved by either of two methods:
- (a) production of the records or other documents in the custody of the income-tax authority containing the entries; or
- (b) production of a copy of the entries, certified by the income-tax authority having custody under its signature, stating that it is a true copy of the original entries and that the originals are contained in the records or documents in its custody.
A certified copy, in other words, does the work of the original, provided the certificate contains the two statements the section lists.
Section 494: disclosure of particulars by public servants
Sub-section (1). A public servant who furnishes any information or produces any document in contravention of section 258(3) is punishable with simple imprisonment up to one month, or with fine, or with both. This punishment is as substituted by the Finance Act, 2026, with effect from 1 April 2026.
Sub-section (2). No prosecution may be instituted under this section except with the previous sanction of the Central Government. Note that this is a different sanctioning authority from the one in section 491(1).
What section 258(3) prohibits is not part of the text of section 494 and is outside this note; read section 258 for the protected information.
A worked example (names and amounts assumed)
Mr. Rakesh, a trader, is accused of a wilful attempt to evade tax for a tax year. The name and the facts in this example are assumed.
- The department cannot proceed against him unless the previous sanction required by section 491(1) has been obtained from the authority named there.
- Suppose a penalty had been imposed on him under section 439 for that tax year, and an order under section 469 later waived it entirely. By section 491(3) he cannot be proceeded against under section 478 for that tax year.
- If the penalty had not been reduced or waived, section 491(3) would not bar the prosecution, and compounding under section 491(4) would remain open before or after the proceedings begin.
- Because section 478 is among the offences in section 492, the offence is deemed non-cognizable.
- At trial the department proves its own records either by producing them or by a copy certified as section 493(b) requires.
Need help with an offence notice or compounding question?
Questions about sanction, compounding or waiver of penalty turn on dates, orders and the exact section charged. If you are dealing with such a matter, legal dispute resolution is where our team can review the papers and advise on the next step.
Key takeaways
- Section 491(1) requires previous sanction before a person is proceeded against for an offence under sections 473 to 484.
- Section 491(3) bars proceedings under section 478 or 482 for a tax year where the section 439 penalty was reduced or waived by an order under section 469.
- Any offence under the Chapter may be compounded before or after proceedings begin (section 491(4)).
- Offences under sections 476, 478, 479, 480, 482 and 484 are deemed non-cognizable (section 492).
- Entries in an income-tax authority's records are provable by the records or by a certified true copy (section 493).
- A public servant who breaches section 258(3) faces simple imprisonment up to one month, or fine, or both; prosecution needs Central Government sanction (section 494).
Read next
- Sections 487 to 490: offences by companies and Hindu undivided families
- Sections 495 to 498: Special Courts
- Section 470: the reasonable cause defence
- Chapter XXII guide: offences and prosecution
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.