Sections 495 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.
Sections 495 to 498 of the Income-tax Act, 2025 set up the court system for trying offences under the Act. The Central Government may designate Special Courts, offences under Chapter XXII are triable only by them where designated, short-sentence offences are tried as summons cases, and the Act lays down how prosecutors are appointed. A person summoned before such a court may want advice on legal dispute resolution at the outset.
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.
The Central Government, in consultation with the Chief Justice of the High Court, may designate courts of Judicial Magistrate of the first class as Special Courts by notification. Offences punishable under Chapter XXII are triable only by the Special Court designated for the area or cases. An offence punishable with imprisonment not exceeding two years, or with fine, or both, is tried as a summons case. Public Prosecutors and Special Public Prosecutors must have been in practice as advocates for not less than seven years.
Section 495: designation of Special Courts
Sub-section (1): who designates and how
The Central Government, in consultation with the Chief Justice of the High Court, may, for the trial of offences punishable under Chapter XXII, designate by notification one or more courts of Judicial Magistrate of the first class as Special Court. The notification may specify the area or areas, or the cases or class or group of cases, for which the court is designated. Which courts have actually been designated is a matter of notification and is not in the text consulted for this note.
Sub-section (2): meaning of "High Court"
For this section, "High Court" means the High Court of the State in which a Judicial Magistrate of first class designated as Special Court was functioning immediately before the designation. This identifies whose Chief Justice is consulted.
Sub-section (3): related offences at the same trial
While trying an offence under the Act, a Special Court also tries an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023), be charged at the same trial. In other words, an offence under that Sanhita which can lawfully be charged along with the tax offence goes to the same Special Court. The Sanhita is another law; check it for the conditions.
Section 496: offences triable by Special Court
Sub-section (1)
Irrespective of anything in the Bharatiya Nagarik Suraksha Sanhita, 2023:
- (a) the offences punishable under this Chapter are triable only by the Special Court, if so designated, for the area or areas, or for the cases or class or group of cases, in which the offence has been committed;
- (b) a Special Court may, upon a complaint made by an authority authorised in this behalf under the Act, take cognizance of the offence for which the accused is committed for trial.
So the route to trial is a complaint by an authorised authority. Before the complaint, prosecution for the main offences needs the previous sanction explained in our note on sections 491 to 494.
Sub-section (2): courts already trying offences
For sub-section (1)(a), the court competent to try offences under section 520:
- (a) if designated as a Special Court under this section, continues to try the offences before it, or offences arising under the Act after the designation;
- (b) if not designated as a Special Court, may continue to try an offence pending before it until its disposal.
Section 520 is headed "Cognizance of offences".
Section 497: trial as a summons case
The Special Court, irrespective of anything in the Bharatiya Nagarik Suraksha Sanhita, 2023, shall try an offence under Chapter XXII punishable with imprisonment not exceeding two years, or with fine, or with both, as a summons case. The provisions of the Sanhita applicable to the trial of a summons case apply accordingly. The offences with higher maximum punishment are not covered by this section, so the section itself says nothing about the form of their trial.
| Feature of the offence | Consequence under section 497 |
|---|---|
| Punishable with imprisonment not exceeding two years, or fine, or both | Tried as a summons case |
| Punishable with a longer term | Section 497 is silent on the form of trial |
Section 498: the Sanhita and prosecutors
Sub-section (1)
Save as otherwise provided in the Income-tax Act, the provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, including the provisions as to bails or bonds, apply to proceedings before a Special Court. The person conducting the prosecution before the Special Court is deemed to be a Public Prosecutor.
Sub-section (2): Special Public Prosecutor
The Central Government may also appoint a Special Public Prosecutor for any case or class or group of cases.
Sub-section (3): qualification
A person is not qualified to be appointed as a Public Prosecutor or Special Public Prosecutor under this section unless he has been in practice as an advocate for not less than seven years, requiring special knowledge of law.
Sub-section (4): status
Every person so appointed is deemed to be a Public Prosecutor within the meaning of section 2(1)(v) of the Bharatiya Nagarik Suraksha Sanhita, 2023, and the provisions of that Sanhita have effect accordingly.
Printing note
In the copy consulted, a footnote mark appears after the word "courts" in section 495(1). It is a footnote reference and is not part of the sentence. Nothing in the section depends on it.
A worked example (names and facts assumed)
The Central Government designates, by notification, the court of a Judicial Magistrate of the first class at a district headquarters as a Special Court for that district. (All facts in this example are assumed.)
- An authorised authority files a complaint against Mr. Naveen for an offence under Chapter XXII committed within that district, after obtaining any sanction the Act requires.
- Under section 496(1)(a) the offence is triable only by that Special Court, and under section 496(1)(b) the Special Court may take cognizance on the complaint.
- If the punishment prescribed for the offence is imprisonment not exceeding two years, or fine, or both, section 497 requires the Special Court to try it as a summons case.
- If, on the same facts, Mr. Naveen can lawfully be charged at the same trial with an offence under the Bharatiya Nagarik Suraksha Sanhita, 2023, section 495(3) lets the Special Court try that offence too.
- The prosecutor appearing is deemed a Public Prosecutor; if the Central Government appoints a Special Public Prosecutor for the case, that person must have at least seven years of practice as an advocate (section 498(3)).
Need help with an offence proceeding?
When a complaint is filed or a summons arrives from a court, the forum, the offence charged and the sanction are the first points to check. Legal dispute resolution support is available for reading the complaint against the sections of the Act.
Key takeaways
- The Central Government designates Special Courts by notification, in consultation with the Chief Justice of the High Court (section 495(1)).
- Offences under Chapter XXII are triable only by the designated Special Court for the area or cases (section 496(1)(a)).
- A Special Court may take cognizance on a complaint by an authorised authority (section 496(1)(b)).
- Offences punishable with imprisonment up to two years, or fine, or both, are tried as summons cases (section 497).
- The Bharatiya Nagarik Suraksha Sanhita, 2023 applies, including provisions as to bails or bonds, save as the Act otherwise provides (section 498(1)).
- Public Prosecutors and Special Public Prosecutors need at least seven years of practice as an advocate (section 498(3)).
Read next
- Sections 491 to 494: sanction, compounding and proof of entries
- Sections 499 and 500: void transfers and provisional attachment
- Section 478: wilful attempt to evade tax
- 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.