Section 496 · Offences
Section 496 of the Income-tax Act, 2025 — Offences Triable by Special Court
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XXII
📜 What the law says — Section 496, Income-tax Act 2025
496. (1) Irrespective of anything contained in the Bharatiya Nagarik Suraksha
Sanhita, 2023 (46 of 2023),—
(a) the offences punishable under this Chapter shall be triable only by the
Special Court, if so designated, for the area or areas or for cases or class
or group of cases, as the case may be, in which the offence has been
committed;
(b) a Special Court may, upon a complaint made by an authority authorised
in this behalf under this Act, take cognizance of the offence for which
the accused is committed for trial.
(2) For the purposes of sub-section (1)(a), the court competent to try offences under
section 520,—
(a) which has been designated as a Special Court under this section, shall
continue to try the offences before it or offences arising under this Act
after such designation;
(b) which has not been designated as a Special Court, may continue to try
such offence pending before it till its disposal.
31. Substituted for “imprisonment which may extend to six months, and shall also be liable to
fine” by the Finance Act, 2026, w.e.f. 1-4-2026.
Trial of offences as summons case.
497.
The Special Court, irrespective of anything contained in the Bharatiya
Nagarik Suraksha Sanhita, 2023 (46 of 2023), shall try an offence under this
Chapter punishable with imprisonment not exceeding two years or with fine, or
with both, as a summons case, and the provisions of the Bharatiya Nagarik Surak-
sha Sanhita, 2023 as applicable in the case of trial of summons case, shall apply
accordingly.
Application of Bharatiya Nagarik Suraksha Sanhita, 2023 to proceedings
before Special Court.
498.
(1) Save as otherwise provided in this Act, the provisions of Bharatiya
Nagarik Suraksha Sanhita, 2023 (46 of 2023) (including the provisions as
to bails or bonds), shall apply to the proceedings before a Special Court and the
person conducting the prosecution before the Special Court, shall be deemed to be
a Public Prosecutor.
(2) The Central Government may also appoint a Special Public Prosecutor for any
case or class or group of cases.
(3) A person shall not be qualified to be appointed as a Public Prosecutor or a 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.
(4) Every person appointed as a Public Prosecutor or a Special Pu
In plain language
What Section 496 actually says
Section 496 of the Income-tax Act, 2025 is a purely procedural provision. It does not create any new offence and it does not prescribe any penalty, fine or jail term. Instead, it answers one narrow but important question: which court is allowed to try a person accused of an income-tax offence? The answer is the designated Special Court.
The section carries an overriding clause — it applies "irrespective of anything contained in the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023" (the new criminal procedure code that replaced the CrPC, 1973). This means the ordinary rules about which magistrate hears a criminal complaint are set aside for tax offences, and the special mechanism in the Act takes over.
The key rules in plain language
- Exclusive jurisdiction: Offences punishable under Chapter XXI (the "Offences and Prosecution" chapter, roughly Sections 475 to 494) are triable only by a Special Court, where one has been designated under Section 495 for that area or for that class of cases.
- Cognizance only on a complaint: A Special Court can take cognizance of a tax offence only when an authorised income-tax authority files a written complaint. A private citizen cannot walk in and start a tax-offence prosecution, and there is no ordinary police FIR route for these offences.
- Continuity for existing courts: If a court was already competent to try these offences before it was designated as a Special Court, it continues to try both the pending cases and the fresh ones. If a court is not designated, it keeps hearing cases already before it until they are disposed of, so nothing is thrown out mid-trial.
Who this applies to
Section 496 is relevant to any person the Income-tax Department decides to prosecute criminally — this can include individuals, partners, directors, company officers, HUF kartas and, in some cases, professionals such as accountants who abet an offence. Typical triggers for prosecution under the chapter include wilful attempt to evade tax, wilful failure to file a return after a search, failure to deposit TDS/TCS, false statements in verification, and falsification of books. Section 496 does not decide guilt; it only routes the trial to the correct forum.
How it fits with the surrounding sections
- Section 495 empowers the Central Government, in consultation with the Chief Justice of the concerned High Court, to designate a Court of Session or a Magistrate as a Special Court by notification.
- Section 496 (this section) says those offences are triable only by that Special Court and only on an authorised complaint.
- Section 497 directs that the offences be tried as a summons case (a faster, simpler trial procedure) even where the potential jail term exceeds two years.
- Section 498 applies the provisions of the BNSS, 2023 to Special Court proceedings, so the court has the powers of a normal criminal court for everything the Act does not separately cover.
Practical implications for taxpayers
For a taxpayer, three points matter most. First, tax crimes are heard by specialised courts, which speeds up disposal and builds subject-matter expertise. Second, because cognizance needs an authorised complaint from the Department (with the required sanction of a senior officer under the prosecution-sanction rules), prosecution is not casual — it is a deliberate departmental decision. Third, being tried as a summons case means a comparatively streamlined process, but a conviction still carries real imprisonment and fine under the substantive offence sections, and can run parallel to (and independent of) penalty proceedings.
Continuity with the 1961 Act
Section 496 is the re-enacted version of Section 280B of the Income-tax Act, 1961. The scheme is deliberately carried forward almost verbatim — the only substantive modernisation is the reference to the BNSS, 2023 instead of the CrPC, 1973. So the large body of settled case law and departmental practice built around Section 280B continues to guide how Section 496 is read.
💡 Example
Worked example 1 — Wilful evasion routed to a Special Court. Suppose Mr. Arun, a builder, is found to have concealed rental income and evaded tax of ₹42 lakh across three years. After completing assessment and obtaining the required sanction from the Principal Commissioner, the Department files a criminal complaint for wilful attempt to evade tax. Because of Section 496, this complaint cannot be filed before an ordinary magistrate — it must go to the Special Court designated under Section 495 for that area, which alone can take cognizance. The ₹42 lakh figure decides the gravity of the substantive offence, but Section 496 only decides the forum.
Worked example 2 — TDS default. A company deducts TDS of ₹8,50,000 from employee salaries but wilfully fails to deposit it with the Government. The Assessing Officer, after sanction, lodges a prosecution complaint. Even though the possible imprisonment can exceed two years, Section 497 requires it to be tried as a summons case, and Section 496 requires that trial to happen only in the Special Court. The company officers responsible are the accused; a private employee cannot initiate this prosecution.
A relatable story. Think of Section 496 like a hospital's triage desk. When you arrive with a broken bone, you are not treated at the general reception counter — you are sent to the orthopaedics department that specialises in bones. Similarly, when the Department decides someone has committed a tax offence, the case is not left with a general criminal court; it is sent to the Special Court that specialises in tax matters, and only the Department (the "referring doctor") can send you there.
| Aspect | Position under Section 496, Income-tax Act 2025 |
|---|
| Nature of section | Procedural (forum-fixing); creates no offence or penalty |
| Court that tries the offence | Only the designated Special Court (per Section 495) |
| Overriding law | Applies notwithstanding the BNSS, 2023 |
| Who can start prosecution | Only an authorised income-tax authority, by written complaint |
| Private complaint / police FIR | Not permitted for these offences |
| Pending cases in non-designated courts | Continue in that court until disposal |
| Manner of trial | As a summons case (Section 497) |
| Corresponding 1961 Act section | Section 280B |
| Effective from | 1 April 2026 (AY 2026-27 onwards) |
Related sections
Section 495 — Designation of Special Courts Section 497 — Trial of offences as summons case Section 498 — Application of BNSS 2023 to Special Court proceedings Section 476 — Wilful attempt to evade tax Section 479 — Failure to pay tax deducted/collected at source Section 494 — Prosecution to be with prior sanction of the specified authority
Frequently asked questions
Does Section 496 mean I will be jailed?
No. Section 496 only decides which court will try a tax offence — the designated Special Court. The actual imprisonment or fine comes from the substantive offence sections (such as wilful evasion or TDS default), not from Section 496.
Can a neighbour or business rival file a tax-offence case against me under this section?
No. A Special Court can take cognizance only on a written complaint by an income-tax authority authorised under the Act. Private individuals cannot initiate these prosecutions, and there is no ordinary police FIR route.
What is a 'Special Court' here?
It is a Court of Session or Magistrate specifically designated under Section 495 by the Central Government, in consultation with the Chief Justice of the High Court, to try income-tax offences for a particular area or class of cases.
What was the corresponding provision under the old law?
Section 496 re-enacts Section 280B of the Income-tax Act, 1961. The scheme is substantially the same; the main change is the reference to the BNSS, 2023 in place of the CrPC, 1973.
If a case was already going on in a normal court, does it get cancelled?
No. If a court is not designated as a Special Court, it continues to hear cases already pending before it until they are disposed of. There is no loss of proceedings on account of the change.
Is a tax prosecution tried like a full-blown criminal trial?
It is tried as a summons case under Section 497, which is a comparatively simpler and faster procedure, even if the possible jail term is more than two years. But a conviction still carries real imprisonment and fine.
From when does Section 496 apply?
The Income-tax Act, 2025 takes effect from 1 April 2026 and applies from assessment year 2026-27 onwards. Prosecutions already pending under the 1961 Act continue to be governed by the old law under the transitional provisions.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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