https://www.taxtmi.com/caselaws?id=793535 Penalty under section 271AAC of the Income-tax Act is not automatic merely because an addition is made under section 68. The use of the word "may" shows that the provision is discretionary, and penalty cannot follow mechanically from an assessed addition. Because penalty proceedings are quasi-criminal, they require a higher threshold than assessment proceedings. On the facts, unsecured loans were reflected in the books, and the section 68 addition arose from incomplete supporting details in ex parte assessment proceedings under section 144. The breach was treated as technical rather than concealment, so penalty under section 271AAC was held not exigible and was deleted. en-us Tue, 19 May 2026 00:00:00 +0530 Thu, 18 Jun 2026 08:45:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=793535 Penalty under section 271AAC of the Income-tax Act is not automatic merely because an addition is made under section 68. The use of the word "may" shows that the provision is discretionary, and penalty cannot follow mechanically from an assessed addition. Because penalty proceedings are quasi-criminal, they require a higher threshold than assessment proceedings. On the facts, unsecured loans were reflected in the books, and the section 68 addition arose from incomplete supporting details in ex parte assessment proceedings under section 144. The breach was treated as technical rather than concealment, so penalty under section 271AAC was held not exigible and was deleted. Case-Laws Income Tax Tue, 19 May 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=793535