Penalty for Search Cases

This query is : Resolved

SUDHASHRI V S (Querist)
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23 June 2011 Is penalty mandatory for search cases.
Search was conducted before filing ROI.
Later during Post Search Asst., declared income is accepted.

A.O. says that penalty is mandatory for search cases whether or not concealment.

Is there any case law saying that penalty is not mandatory for search.

Please clarify

CS Bijoy

CS Bijoy (Expert)
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24 June 2011 According to me penalty is not mandatory till you are not in default.

In the above case search is done before submitting return and after that the Return is submitted and it was accepted by the Department.

But in case there is concealment than penalty is mandatory otherwise if you are not in default and you have shown proper cause all done than penalty will not be applicable on you by any law.