Section 291 of Income-tax Act, 1961: Power to Tender Immunity from Prosecution
Section 291 empowers the Central Government, in specified circumstances, to offer conditional immunity from prosecution and income-tax penalties in return for a full and truthful disclosure concerning concealed income or evasion of income tax.
Section 291: Statutory text and explanation
Sub-section (1): Central Government may tender immunity
The Central Government may, if it is of opinion (the reasons for such opinion being recorded in writing) that with a view to obtaining the evidence of any person appearing to have been directly or indirectly concerned in or privy to the concealment of income or to the evasion of payment of tax on income it is necessary or expedient so to do, tender to such person immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860), or under any other Central Act for the time being in force and also from the imposition of any penalty under this Act on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of payment of tax on income.
Sub-section (2): Effect of accepted immunity
A tender of immunity made to, and accepted by, the person concerned, shall, to the extent to which the immunity extends, render him immune from prosecution for any offence in respect of which the tender was made or from the imposition of any penalty under this Act.
Sub-section (3): Withdrawal for non-compliance
If it appears to the Central Government that any person to whom immunity has been tendered under this section has not complied with the condition on which the tender was made or is wilfully concealing anything or is giving false evidence, the Central Government may record a finding to that effect, and thereupon the immunity shall be deemed to have been withdrawn, and any such person may be tried for the offence in respect of which the tender of immunity was made or for any other offence of which he appears to have been guilty in connection with the same matter and shall also become liable to the imposition of any penalty under this Act to which he would otherwise have been liable.
Historical legislative note: The words concerning evasion of payment of tax on income were inserted by Act 13 of 1963, section 18, with effect from 28 April 1963. References to the Indian Penal Code in the historical text should be read in light of the subsequent criminal-law reforms and applicable savings provisions.
When can immunity be granted?
The provision is directed at obtaining evidence from a person connected, directly or indirectly, with concealment of income or evasion of income tax. Its principal requirements are:
- Government satisfaction: The Central Government must consider the tender necessary or expedient for obtaining evidence and record reasons in writing.
- Connection with the matter: The person appears to have been involved in, or privy to, the concealment or evasion.
- Full and true disclosure: The person must disclose the whole circumstances relating to the matter, not merely selected facts.
- Acceptance and defined scope: Immunity operates upon tender and acceptance, and only to the extent covered by the tender.
Meaning of immunity: A legal protection against prosecution or specified penalty, subject to the terms and statutory conditions of the tender. It is not a general amnesty or an automatic cancellation of tax payable.
When does immunity cease?
Under sub-section (3), the Central Government may record a finding that the recipient has breached a condition, wilfully concealed material information or given false evidence. The immunity is then deemed withdrawn. The recipient may face prosecution connected with the matter and applicable income-tax penalties.
A person relying on immunity should preserve the written tender, the acceptance, disclosure records and all communications relating to compliance with the conditions.
Practical illustration
Suppose a person who participated in concealing taxable receipts has documents establishing how the concealment occurred. To secure that evidence, the Central Government may offer immunity on the condition of full and true disclosure. If the person accepts and complies, the statutory protection applies within the stated scope. If the person deliberately withholds relevant transactions or gives false evidence, the Government may record a finding and the protection can be withdrawn.
Related provisions and official references
For the underlying statutory framework, consult the Income Tax Department's official legislative resources, the India Code legislation database and the Income Tax e-Filing portal. Verify the applicable consolidated legislation and amendments for the relevant period.
See also Section 292: Cognizance of offences, Section 292A: Certain probation provisions not to apply and Section 293: Bar of suits in civil courts.
Frequently asked questions
Who may grant immunity under Section 291?
The Central Government may tender immunity when it considers this necessary or expedient to obtain evidence concerning concealment of income or evasion of income tax, with its reasons recorded in writing.
Is immunity under Section 291 automatic?
No. It is a discretionary, conditional tender, and the recipient must accept it and make a full and true disclosure of the relevant circumstances.
Can immunity be withdrawn?
Yes. If the conditions are not met, information is wilfully concealed, or false evidence is given, the Central Government may record a finding and the immunity is deemed withdrawn.
Does Section 291 cancel the tax liability?
The provision concerns immunity from specified prosecution and penalties. It does not itself state that the underlying income-tax liability is cancelled.
Editorial update: 28 October 2026. This article is general legal information, not a substitute for advice on a particular investigation or prosecution.