Law:

Section:

Section 158BFA, read with section 271(1)(c), of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases - Penalty under section 158BFA(2) is not mandatory [In favour of assessee] It cannot be said that only upon satisfaction of the conditions contained in the proviso to sub-section (2) the assessee, in the case of the block assessment, can be spared of the penalty. It is, of course, true that upon satisfying such conditions, the assessee would get immunity from penalty. Nevertheless, this is not a thing as to suggest that in no other case, or on no other ground, the Assessing Officer may at his discretion, not impose penalty the moment additions under clause (c) of section 158BC are sustained. In other words, the penalty under section 158BFA(2) is not mandatory in nature. It is true that section 273B which provides that penalty shall not be imposed in certain cases on the assessee proving that there was reasonable cause for failure to pay tax refers to several provisions such as sections 271, 271A, etc., makes no mention of section 158BFA(2). This still does not mean that penalty under section 158BFA(2) is mandatory. Hence, penalty under section 158BFA(2) is not mandatory. Section 158BFA, read with section 271(1)(c), of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases - Revenue has no onus to prove concealment of income on part of assessee for purpose of imposing penalty under section 158BFA [In favour of revenue] The concept of proving concealment of income can nowhere be traced in section 158BFA(2). The penalty envisaged and imposable under section 271(1)(c) is different from the one that can be imposed under section 158BFA. Section 271(1)(c) provides for penalty in case an assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. Mere disallowance of a claim, therefore, would not give rise to the penalty proceedings unless, as provided in section 271(1)(c), the assessee had concealed the income or provided inaccurate particulars of such income. Under sub-section (2) of section 158BFA, no such…

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