Section 158BFA: Levy of interest and penalty in certain cases with regard to Sections 132 and/or 132A

Failure to furnish in time return of total income including undisclosed income in respect of search initiated u/s 132 and/or 132A

If the return of total income including undisclosed income for the block period u/s 132 or books of accounts or other documents as specified u/s 132A is furnished after the expiry of the period specified in such notice or is not furnished, then the Assessee shall be liable to pay simple interest at the rate of one percent of the tax on undisclosed income for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time specified in the notice.

Reference:

As per the Income Tax Act, 1961–

Section 158BFA: Levy of interest and penalty in certain cases

(1) Where the return of total income including undisclosed income for the block period, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of January, 1997, as required by a notice under clause (a) of section 158BC, is furnished after the expiry of the period specified in such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one per cent of the tax on undisclosed income, determined under clause (c) of section 158BC, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time specified in the notice, and—

(a)  where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or

(b)  where no return has been furnished, on the date of completion of assessment under clause (c) of section 158BC.

(2) The Assessing Officer or the Commissioner (Appeals) in the course of any proceedings under this Chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC :

Provided that no order imposing penalty shall be made in respect of a person if—

(i)  such person has furnished a return under clause (a) of section 158BC;

(ii)  the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable;

(iii)  evidence of tax paid is furnished along with the return; and

(iv)  an appeal is not filed against the assessment of that part of income which is shown in the return :

Provided further that the provisions of the preceding proviso shall not apply where the undisclosed income determined by the Assessing Officer is in excess of the income shown in the return and in such cases the penalty shall be imposed on that portion of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return.

(3) No order imposing a penalty under sub-section (2) shall be made,—

(a)  Unless an assessee has been given a reasonable opportunity of being heard;

(b)  by the Assistant Commissioner [or Deputy Commissioner] or the Assistant Director  [or Deputy Director], as the case may be, where the amount of penalty exceeds twenty thousand rupees except with the previous approval of the [Joint] Commissioner or the [Joint] Director, as the case may be;

(c)  in a case where the assessment is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 [or section 246A] or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or the Commissioner, whichever period expires later;

(d)  in a case where the assessment is the subject-matter of revision under section 263, after the expiry of six months from the end of the month in which such order of revision is passed;

(e)  in any case other than those mentioned in clauses (c) and (d), after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later;

(f)  in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, after the 30th day of June, 1995 but before the 1st day of January, 1997.

Explanation.—

In computing the period of limitation for the purpose of this section,—

(i)  the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129;

(ii)  the period during which the immunity granted under section 245H remained in force; and

(iii)  the period during which the proceedings under sub-section (2) are stayed by an order or injunction of any court,

shall be excluded.

(4) An income-tax authority on making an order under sub-section (2) imposing a penalty, unless he is himself an Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer.

Section 132: Search and seizure

Who is the authorized officer to issue order for search and seizure?

1. the Director General of Income Tax, or
2. the Director of Income Tax, or
3. the Chief Commissioner of Income Tax, or
4. the Commissioner of Income Tax, or
5. any such Joint Director or Joint Commissioner of Income Tax as may be empowered by the Board.

The Director General or Director or the Chief Commissioner or Commissioner or Joint Commissioner or Joint Director who have been empowered by the Board can authorize any officer subordinate to him not below the rank of Income Tax Officer to conduct search. The officer so authorized is referred as Authorized officer and the authorization is done by issuing a search warrant in Form 45.

Section 132 was totally substituted by the Finance Act, 1964.

Section 132A: Powers to requisition books of account, etc.

(1) Where the [Director General or Director] or the [Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to believe that—

(a)  any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents, as required by such summons or notice and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or

(b)  any books of account or other documents will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or

(c)  any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force,

then, the  [Director General or Director] or the  [Chief Commissioner or Commissioner] may authorise any  [Additional Director, Additional Commissioner,] [Joint Director],  [Joint Commissioner],  [Assistant Director  [or Deputy Director]],  [Assistant Commissioner  [or Deputy Commissioner] or Income-tax Officer] (hereafter in this section and in sub-section (2) of section 278D referred to as the requisitioning officer) to require the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, to deliver such books of account, other documents or assets to the requisitioning officer.

(2) On a requisition being made under sub-section (1), the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents or assets to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody.

(3) Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub-sections (4A) to (14) (both inclusive) of section 132 and section 132B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under sub-section (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of this section and as if for the words “the authorised officer” occurring in any of the aforesaid sub-sections (4A) to (14), the words “the requisitioning officer” were substituted.