Section 158BF of Income Tax Act "Certain interests and penalties not to be levied or imposed"
158BF. No interest under the provisions of section 234A, 234B or 234C or penalty under the provisions of clause (c) of sub-section (1) of section 271 or section 271A or section 271B shall be levied or imposed upon the assessee in respect of the undisclosed income determined in the block assessment.
158BFA. (1) Where
the return of total income including undisclosed income for
the block period, in respect of search initiated under
section 132 or books of account, other documents or any
assets requisitioned under section 132A on or after the 1st
day of January, 1997, as required by a notice under clause
(a) of section 158BC, is furnished after the expiry of the
period specified in such notice, or is not furnished, the
assessee shall be liable to pay simple interest at the rate
of one per cent of the tax on undisclosed income, determined
under clause (c) of section 158BC, for every month or part
of a month comprised in the period commencing on the day
immediately following the expiry of the time specified in
the notice, and-
(a) where the return is furnished after the expiry of the
time aforesaid, ending on the date of furnishing the return;
or
(b) where no return has been furnished, on the date of
completion of assessment under clause (c) of section 158BC.
(2) The Assessing Officer or the Commissioner (Appeals) in
the course of any proceedings under this Chapter, may direct
that a person shall pay by way of penalty a sum which shall
not be less than the amount of tax leviable but which shall
not exceed three times the amount of tax so leviable in
respect of the undisclosed income determined by the
Assessing Officer under clause (c) of section 158BC :
Provided that no order imposing penalty shall be made in
respect of a person if-
(i) such person has furnished a return under clause (a) of
section 158BC;
(ii) the tax payable on the basis of such return has been
paid or, if the assets seized consist of money, the assessee
offers the money so seized to be adjusted against the tax
payable;
(iii) evidence of tax paid is furnished along with the
return; and
(iv) an appeal is not filed against the assessment of that
part of income which is shown in the return :
Provided further that the provisions of the preceding
proviso shall not apply where the undisclosed income
determined by the Assessing Officer is in excess of the
income shown in the return and in such cases the penalty
shall be imposed on that portion of undisclosed income
determined which is in excess of the amount of undisclosed
income shown in the return.
(3) No order imposing a penalty under sub-section (2) shall
be made,-
(a) unless an assessee has been given a reasonable
opportunity of being heard;
(b) by the Assistant Commissioner or Deputy Commissioner or
the Assistant Director or Deputy Director, as the case may
be, where the amount of penalty exceeds twenty thousand
rupees except with the previous approval of the Joint
Commissioner or the Joint Director, as the case may be;
(c) in a case where the assessment is the subject-matter of
an appeal to the Commissioner (Appeals) under section 246 or
section 246A or an appeal to the Appellate Tribunal under
section 253, after the expiry of the financial year in which
the proceedings, in the course of which action for the
imposition of penalty has been initiated, are completed, or
six months from the end of the month in which the order of
the Commissioner (Appeals) or, as the case may be, the
Appellate Tribunal is received by the Principal Chief
Commissioner or Chief Commissioner or the Principal
Commissioner or Commissioner, whichever period expires
later;
(d) in a case where the assessment is the subject-matter of
revision under section 263, after the expiry of six months
from the end of the month in which such order of revision is
passed;
(e) in any case other than those mentioned in clauses (c)
and (d), after the expiry of the financial year in which the
proceedings, in the course of which action for the
imposition of penalty has been initiated, are completed, or
six months from the end of the month in which action for
imposition of penalty is initiated, whichever period expires
later;
(f) in respect of search initiated under section 132 or
books of account, other documents or any assets
requisitioned under section 132A, after the 30th day of
June, 1995 but before the 1st day of January, 1997.
Explanation.-In computing the period of limitation for the
purpose of this section,-
(i) the time taken in giving an opportunity to the assessee
to be reheard under the proviso to section 129;
(ii) the period during which the immunity granted under
section 245H remained in force; and
(iii) the period during which the proceedings under
sub-section (2) are stayed by an order or injunction of any
court, shall be excluded.
(4) An income-tax authority on making an order under
sub-section (2) imposing a penalty, unless he is himself an
Assessing Officer, shall forthwith send a copy of such order
to the Assessing Officer.