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| DATE: | January 1, 2009 (Date of publication) |
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Levy of Penalty u/s 158BFA is not automatic
Where the Tribunal found that there was a bona fide surrender of undisclosed income and the question arose whether penalty u/s 158BFA (2) could be levied on the difference between the returned income and the assessed income, HELD
(a) Where the assessment was on the basis of surrender, there was no “determination” of undisclosed income by the AO u/s 158 BC (c) which is the requirement for imposition of penalty;
(b) The general proposition laid down in Sir Shadilal Sugar and General Mills Ltd 168 ITR 705 (SC) that the surrender of undisclosed income made by an assessee to buy peace did not necessarily lead to the conclusion that the amount surrendered was indeed concealed income, cannot be said to have been overruled in K.P. Madhusudhanan 251 ITR 99 (SC);
(c) Levy of penalty u/s 158 BFA (2) is discretionary and not automatic notwithstanding the use of the word “shall”.
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