Section 271AAA - Penalty where search has been initiated

Penalty of 10% on Undisclosed Income Under Income Tax Act for Searches Between 2007-2012, Sections 274 & 275 Applied

Where a search is initiated under the Income Tax Act between June 1, 2007, and before July 1, 2012, the tax authority may impose a penalty equal to 10% of the undisclosed income for the specified previous year, in addition to tax payable. This penalty does not apply if the taxpayer admits the undisclosed income during the search, substantiates its source, and pays the applicable tax with interest. The undisclosed income includes income represented by unrecorded money, valuables, or false entries discovered during the search. The specified previous year refers to the year ending before the search date for which the return was not filed before the search or the year in which the search was conducted. Provisions related to penalty procedures under sections 274 and 275 apply to this penalty, and no separate penalty under section 271(c) shall be imposed for the same undisclosed income.