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Hi Dugar,

To supplement,  as clarified by GautamBaid,

a. Yes No Penalty can be imposed when the assesse declares undisclosed income in his return of income (ITR).

b. Penalty cannot be imposed without assesse being given an opportunity to be heard.

c. U/s 270A, penalty can be imposed equal to 200% of tax payable if under declared income arising from misreporting which includes misrepresentation or suppression of facts. If this were to be invoked, then penalty is leviable, to answer your query.

In the case cited, assesse is to declare entire amount as declared income in the ITR and thereby not attracting under reported  income and hence penalty will not get attracted.

d. Based on the nature of income being declared, other legal actions may get attracted which cannot be ruled out as this program has not stated immunity from prosecution. Service Tax (if service income) or Central Excise OR ED or BM/AML  related prosecutions MAY get attracted.

Hope this helps.

Balaji Srini FCA., LL.B.

Hi Mr. Sanjay,

Answer to your query is 'Yes'.

I guess the subject matter being reassessed is different to the matter under appeal. (pls. read point c below).

ITO can reassess to tax any income:
a. has reason to believe that any income chargeable to tax has escaped assessment / reassessment for any AY.

b. It is also provided if an assesses is assessed under sec 147 (your ref case), it is open to reassessment if any income chargeable to tax has escaped assessment for such AY, with the clause reading '..to disclose fully and truly all material facts necessary for his assessment' .

The specific clause (relevant parts only) in the section is reproduced below :
"
Provided that where an assessment ...  or this section has been made for the relevant assessment year, ...unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee ...or to disclose fully and truly all material facts necessary for his assessment, for that assessment year:
"

c. Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal.

Hope this helps.

Rgds
Balaji Srini FCA., LL.B.