Irony is created when there is some significant discrepancy or contrast when what happens is different from what was expected to happen. The irony of the new convict, Makar Semyonich, being imprisoned is that he borrowed a horse that belonged to a friend of his without checking with the friend first (even releasing the horse to return to its owner), and he was later convicted of theft. He was imprisoned when he had committed no crime and yet, he says, he "once really did something wrong," though he was never connected to that crime and so he was never punished.

Ironically, Semyonich was not prosecuted or punished when he had done something wrong, and then he is prosecuted and punished when he has not done anything wrong! He belongs in prison for the crime he committed long ago but not for the reason he is actually there. We would expect someone to go to jail when they'd committed a crime but not when they haven't.