Penalty for undisclosed tax base: search-triggered fixed-rate penalty unless admission, substantiation and tax payment follow.

Penalty applies where a search under section 139 reveals an undisclosed tax base; the Assessing Officer must impose a penalty by written order equal to a fixed proportion of that undisclosed tax base. The penalty does not apply if, during the search, the assessee admits the undisclosed income, substantiates how it was derived, and pays tax with applicable interest. "Undisclosed tax base" covers money, valuables, documents, or false expense entries found in the search that were not recorded or disclosed before the search, and "specified financial year" includes the year of search and certain prior years with unfiled returns.

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