Undisclosed income requirement under section 271AAB not met, so penalty failed where disclosure was voluntary and unlinked to seized material.

Penalty under section 271AAB was held inapplicable because the disclosed amount did not satisfy the statutory character of "undisclosed income" arising from search material or related entries. The notice was not invalid merely because it did not specify the exact limb of the penalty provision, but the revenue failed to link the disclosure to any incriminating material, seized money, bullion, jewellery, valuable article, or relevant entry found during search. The assessee's disclosure was treated as voluntary and uncorrelated with seized material, so the penalty could not be sustained.

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Issues: Whether penalty under section 271AAB of the Income-tax Act, 1961 was leviable on the amount disclosed by the assessee.

Analysis: The penalty could not be sustained merely on the objection that the show-cause notice did not specify the exact limb, because the notice was not invalid on that ground. However, for section 271AAB to apply, the income must answer the statutory description of "undisclosed income" arising from search material or related entries. The assessee's disclosure was found to be voluntary and not shown to be linked to any incriminating material, money, bullion, jewellery, valuable article, or relevant entry found in the course of search. The revenue also failed to correlate the disclosed amount with the seized material.

Conclusion: The amount disclosed did not constitute undisclosed income for the purpose of section 271AAB, and the penalty was not leviable. The issue was decided in favour of the assessee.

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