Search penalty under section 271AAB sustained where undisclosed income was admitted, supported by seized material, and notice objections failed.

Penalty under section 271AAB was held sustainable where undisclosed income was admitted in a search statement and supported by seized material, bringing the case within the statutory conditions for minimum penalty. The defect allegation against the penalty notice was rejected because the assessee participated in the proceedings without timely objection, so section 292BB cured the notice-related challenge. The plea that the disclosure was voluntary or made to buy peace did not avoid liability, and absence of mens rea was treated as irrelevant for this statutory penalty.

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Issues: Whether penalty under section 271AAB of the Income-tax Act, 1961, levied on undisclosed income admitted during search, was sustainable and whether the alleged defect in the penalty notice vitiated the penalty.

Analysis: The undisclosed income was admitted in a statement recorded during search and was supported by seized material. The case fell within the statutory conditions for minimum penalty under section 271AAB. The assessee participated in the penalty proceedings without timely objection to the notice, attracting section 292BB. The notice was therefore treated as valid, and the plea that the notice did not specify the exact limb of section 271AAB was rejected. The explanation that the disclosure was voluntary or made to buy peace did not negate liability, and absence of mens rea was held to be irrelevant for this statutory penalty.

Conclusion: The levy of penalty under section 271AAB was upheld and the appeals failed.

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