INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Disclosure of additional income in search under section 153A - -

Assessee in his return of income had offered additional income during the course of search proceedings. This additional income was offered due to search action and findings thereof, thus the amount was undisclosed income of assessee. Therefore, penalty proceedings under section 271(1)(c) were initiated for this default by assessee. Held: Explanation 5A to section 271(1)(c) could be invoked if during the course of search any incriminating material representing any money, bullion, jewellery other valuable articles or things or entry in any books of account found during the course of search, based on such material, addition is being made. This Explanation cannot be invoked simply for the reason that, had the search not been carried out, assessee would not have disclosed this additional income. Solely on the basis of declaration, addition was not possible. Thus penalty was deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 271(1)(c)

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