Clarification with respect to scope of Explaination 5 to Sec.271(1)(c) read with Sec.132(4).

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.... Income-tax Act have not been correctly applied by the Assessing Officers either by not initiating penalty proceedings under section 271(1)(c) or by dropping the said penalty proceedings. It also appeared that the assessees were led to have a wrong notion of the aforesaid provisions while recording their statements in the course of the therein. 2. Under Explanation 5 to section 271(1)(c), an as....

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....be the owner, is recorded in the books of account maintained by him or the income is otherwise disclosed to the Chief Commissioner or the Commissioner of Income-tax before the date of the search. (ii) The assessee makes a statement under section 132(4) in the course of the search that the assets found in his possession or under his control were acquired out of his income which has not been disc....

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....ng a statement under section 132(4) would be possible only in the following circumstances :- (i) in the course of a search the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing; (ii) the said assets have not been recorded in the account books of the assessee; (iii) In respect of the assets in the possession of the assessee or under his c....