Penalty u/s 271(1)(c) was levied on additional income...

Penalty u/s 271(1)(c) was levied on additional income voluntarily offered in the statement recorded u/s 132(4). However, no reference was made to corroborative incriminating material found during the search. It was held that the CIT(A) erred in confirming the penalty u/s 271(1)(c) since the additional income was voluntarily offered. Regarding penalty u/s 271AAB, undisclosed income is defined as income represented by money, bullion, jewellery, or entries in books found during the search but not recorded before the search date. No incriminating material having a nexus with the undisclosed income offered during the search was referred to. Consequently, the Assessing Officer lacked jurisdiction to initiate penalty u/s 271AAB. Following the Paras Mal Jain case, the surrendered income cannot be construed as undisclosed income specified in the explanation to Section 271AAB(1). Therefore, the penalty of Rs. 5 lacs u/s 271AAB was deleted in favor of the assessee.