Indian income-tax law | Historical prosecution provision
Section 276AB of the Income-tax Act, 1961: Property Transfer Offences
Section 276AB addressed specified failures under the former compulsory-purchase regime for immovable property. Its practical application is now subject to two major restrictions: Chapter XX-C ceased applying to transfers from 1 July 2002, and new proceedings under section 276AB have been barred since 1 April 2022.
Under the Finance Act, 2022, no proceeding under section 276AB may be initiated on or after 1 April 2022. The Income-tax Act, 1961 was subsequently repealed from 1 April 2026, subject to the savings in section 536 of the Income-tax Act, 2025. These changes do not automatically dispose of proceedings already validly initiated.
What is Section 276AB?
Section 276AB, titled Failure to comply with the provisions of sections 269UC, 269UE and 269UL, was a prosecution provision in Chapter XXII of the Income-tax Act, 1961. It concerned compliance with the former Chapter XX-C framework, which regulated certain transfers of immovable property and enabled purchase by the Central Government in specified circumstances.
In substance, the provision covered a person who (a) failed to comply with section 269UC, (b) failed to surrender or deliver possession of property as required by section 269UE(2), or (c) contravened section 269UL(2). It prescribed rigorous imprisonment and a fine, subject to its statutory provisos.
Definitions and related legal provisions
| Provision | Legal significance |
|---|---|
| Section 269UC | Required prescribed statements and compliance for certain agreements to transfer immovable property under the former Chapter XX-C regime. |
| Section 269UE(2) | Concerned surrender or delivery of possession of immovable property vesting in the Central Government following an applicable purchase order. |
| Section 269UL(2) | Restricted registration or recognition of transfers in the circumstances governed by Chapter XX-C, subject to the statutory requirements. |
| Section 269UP | Made Chapter XX-C inapplicable to transfers of immovable property effected on or after 1 July 2002. |
| Section 276AB | Specified criminal consequences for the above contraventions, but prohibits initiation of proceedings on or after 1 April 2022. |
The descriptions above are explanatory summaries, not substitutes for the exact statutory language applicable at the time of a historical transaction.
Punishment under the historical provision
For a qualifying contravention, section 276AB prescribed rigorous imprisonment for a term extending up to two years and liability to a fine. Its first proviso stipulated that imprisonment should ordinarily be not less than six months, unless the court recorded special and adequate reasons in its judgment for imposing a shorter term.
These were criminal sanctions, not an ordinary administrative penalty. The prosecution had to establish the applicable statutory offence and comply with the law governing criminal proceedings. The minimum sentence rule did not remove the court's obligation to determine guilt.
Why Section 276AB is now mainly historical
- 13 May 1986: Section 276AB was inserted by the Finance Act, 1986 (Act 23 of 1986, section 36).
- 10 September 1986: The words "without reasonable cause or excuse" were omitted by Act 46 of 1986, section 27.
- 1 July 2002: Section 269UP ended the application of Chapter XX-C to immovable-property transfers effected on or after that date.
- 1 April 2022: The Finance Act, 2022 added the second proviso to section 276AB, expressly prohibiting initiation of any proceeding under the section on or after that date.
- 1 April 2026: The Income-tax Act, 2025 came into force and repealed the 1961 Act, subject to section 536.
Effect of the Income-tax Act, 2025
Section 536 of the Income-tax Act, 2025 preserves specified pre-existing rights, liabilities and pending proceedings notwithstanding repeal of the 1961 Act. However, those savings must be read alongside the specific 1 April 2022 bar on initiating section 276AB proceedings. The repeal does not revive a power to start a prosecution that was already expressly barred.
Any pre-existing prosecution requires a case-specific examination of the date of initiation, the transaction, the law then in force and the applicable procedural safeguards. Section 276AB should not be presented as a prosecution route for new property transfers in 2026.
Illustrative examples
Property transfer after July 2002
A transfer of immovable property effected in 2020 is outside Chapter XX-C because of section 269UP. Section 276AB cannot be invoked as if the former pre-emptive purchase process still governed that transfer.
Attempt to start a new case in 2026
A proposal to initiate section 276AB proceedings in 2026 faces the express statutory prohibition that took effect on 1 April 2022, irrespective of the later repeal of the 1961 Act.
Case already initiated before April 2022
Where proceedings were validly initiated before the prohibition took effect, the question of continuation must be considered on the particular record, including applicable saving provisions and judicial orders.
Frequently asked questions
Can fresh proceedings under Section 276AB be started now?
No. The second proviso to section 276AB expressly states that no proceeding under that section shall be initiated on or after 1 April 2022.
What was the punishment under Section 276AB?
Rigorous imprisonment extending up to two years and a fine, with a general minimum of six months unless the court recorded special and adequate reasons for a lesser term.
Does Chapter XX-C apply to modern immovable-property transactions?
No. Section 269UP made it inapplicable to transfers effected on or after 1 July 2002.
Does the Income-tax Act, 2025 revive this prosecution?
No. The repeal-and-savings mechanism preserves applicable historical proceedings and liabilities; it does not override the earlier express bar on initiating proceedings under section 276AB.
Official legal sources and further reading
- Income Tax Department: Income-tax Act, 1961 as amended by Finance Act, 2025 (Section 276AB)
- CBDT Circular No. 23/2022: Explanatory Notes to Finance Act, 2022 (paragraph 47)
- Income Tax Department: Income-tax Act, 2025 (Section 536)
- Income Tax Department: 2025 Act and transition resources
Historical legislative notes: Section 276AB was inserted by Act 23 of 1986, section 36 (effective 13 May 1986). The words "without reasonable cause or excuse" were omitted by Act 46 of 1986, section 27 (effective 10 September 1986). The second proviso restricting initiation was inserted by the Finance Act, 2022 (effective 1 April 2022).
This article provides general legal information. For a pending prosecution or an older property transaction, examine the original orders, initiation date and statutory text applicable to the facts.