Clause 298 - Levy of interest and penalty in certain cases.

Levy of interest and penalty: interest accrues monthly and penalties may be imposed for undisclosed income in search assessments.

Interest is charged monthly on tax attributable to undisclosed income where a notice required return in search proceedings is not furnished, from the day after the notice deadline until assessment completion. A penalty equal to fifty percent of tax on undisclosed income may be imposed, subject to exceptions when a return is filed, tax is paid or offered, evidence is furnished and no appeal is lodged; penalty applies to undisclosed income exceeding the return. Procedural safeguards, limitation periods, exclusions, extensions, approval requirements for certain officers and transmission of penalty orders to the Assessing Officer are set out.