Section 158BFA - Levy of interest and penalty in certain cases

From Sept 1, 2024: delay in filing block-period return triggers 1.5% monthly interest and possible 50% penalty

For search or seizure cases on or after 1 September 2024, failure to furnish the return of undisclosed income for the block period within the notice time attracts simple interest at 1.5% per month on the tax assessed on such undisclosed income from the day after the notice deadline until completion of assessment. The Assessing Officer or Commissioner (Appeals) may impose a penalty equal to 50% of that tax, subject to relief where a return is furnished, tax paid (or seized money offered), evidence produced and no appeal filed; if assessed undisclosed income exceeds the return, penalty applies only to the excess. Penalty orders require reasonable hearing, higher-level approval where amount exceeds two lakh, are subject to specified limitation periods (with listed exclusions and extensions), and must be copied to the Assessing Officer.