Section 487
Section 487: offences by companies
Section 487 explains who within a company can be held criminally liable when the company commits an offence under the Act - the person responsible for running the business, and separately, any director, manager, secretary or other officer whose consent, connivance or neglect contributed to the offence. It also defines "company" and "director" for this purpose, and clarifies how the company itself is punished where the prescribed punishment includes imprisonment.
Who is deemed guilty when a company commits an offence
"If an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly."
Due-diligence defence
This deeming provision does not apply if the person proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent its commission.
Liability of directors, managers, secretaries and other officers
Irrespective of the general rule and the due-diligence defence above, where an offence has been committed by a company and it is proved that it was committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, that person shall also be deemed guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Where the prescribed punishment is imprisonment and fine
If an offence under the Act has been committed by a company and the punishment for it is imprisonment and fine, then - without prejudice to the provisions above - the company itself shall be punished with fine, while every person referred to above (the person in charge, or the director/manager/secretary/officer whose consent, connivance or neglect is proved) shall be liable to be proceeded against and punished as per the Act's provisions.
Definitions for this section
| Term | Meaning |
|---|---|
| "Company" | A body corporate, and includes (i) a firm, and (ii) an association of persons or a body of individuals, whether incorporated or not |
| "Director", in relation to a firm | A partner in the firm |
| "Director", in relation to an association of persons or body of individuals | Any member controlling the affairs of that association or body |
Frequently asked questions
Who can be held liable when a company commits a tax offence under Section 487?
The person who, at the time of the offence, was in charge of and responsible to the company for the conduct of its business, as well as the company itself; and separately, any director, manager, secretary or other officer whose consent, connivance or neglect contributed to the offence.
Is there a defence available to a person in charge of the company?
Yes - the person is not liable if he proves the offence was committed without his knowledge, or that he had exercised all due diligence to prevent it.
How is the company itself punished if the offence carries imprisonment and fine?
The company is punished with fine, while the individuals found liable (the person in charge, or a director/manager/secretary/officer whose consent, connivance or neglect is proved) are proceeded against and punished as per the Act.
Does "company" under Section 487 include a partnership firm?
Yes - for this section, "company" is defined to include a firm, and also an association of persons or body of individuals, whether incorporated or not.
Related sections
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Talk to our tax team about a company prosecution matterLast updated 9 September 2026