Declaration of undisclosed income to “buy peace” does not renders an assessee immunity from initiation and levy of penalty

Mohit Gupta – [2022] 134 taxmann.com 219 (Article)

The legislature has intentionally drafted the provisions relating to Search and Survey in the statue book of Income Tax Act, 1961 with the target of unearthing the undisclosed income of any person in form of any money, bullion, jewellery or other valuable article or thing.

Under the Income Tax Act, 1961 penalty is to be levied on the amount of “tax sought to be evaded” in respect of the concealment of particulars of income or furnishing inaccurate particulars of the income. Nevertheless, in case of SEARCH penalty is also levied in respect of “Undisclosed Income” too.

The penalty provisions are being regularly strengthened. Counter to this the immunity provisions inbuilt the sections levying the penalty are being made fully non-operative or non-practicable.

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