Rohit (Student) 12 August 2013

Tax evasion

1.A person is liable for tax evasion and he is sentenced for imprisonment as a punitive measure. After he serves his period in prison, would he still be liable to pay the pending tax after his release?

2.Also, what happens if the person is bankrupt? Whether he could be sentenced for imprisonment in that case, wherein he doesnt have any property also for attachment. If yes, then after he serves his term of imprisonment, if his business revives after a few years, then will he be liable for the pending tax due.

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2 Replies

R RAJAGOPALAN (ADVOCATE) 12 August 2013

Replies:.1. Both are separarte proceedings. The prosecution proceedings are in the Criminal Court, and the tax assessment proceedings are in the income tax department office.

2."What happens if the person is bankrupt? Whether he could be sentenced for imprisonment in that case, wherein he doesnt have any property also for attachment. If yes, then after he serves his term of imprisonment, if his business revives after a few years, then will he be liable for the pending tax due."

If the tax demand is not recoverable from a tax payer, the I.T.Department may write off the demand as irrecoverable. bUt that is only temporary, and the person continues to be liable to pay the tax.