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Penalties u/s 271(4A) of Income Tax Act 1961. - Income Tax - 1142/CBDTExtract INSTRUCTION NO. 1142/CBDT Dated : January 25, 1978 Section(s) Referred: 271(4A) ,273A(1) Statute: Income - Tax Act, 1961 The Receipt Audit have brought to the Board's notice a case in which books of account, etc., indicating concealment were seized. While enquiries were in progress, the assessee came forward with an offer of settlement. A settlement was finally arrived at, which, according to the Commissioner of Income-tax, was in the best interest of revenue as, in the normal course, the Department could not frame an assessment on the figures agreed to by the assessee nor levy any penalty. Assessments were made accordingly and penalties were reduced u/s 271(4A), as an integral part of the settlement. 2. In the Board's confidential letter F.No.1/33/68-IT(Inv), dated 29th September, 1969, the connotation of the words 'voluntary' and 'disclosure' used in section 271(4A) was explained and it was clarified, inter alia, that section 271(4A) did not authorise a settlement of cases i.e. making of assessment and levy of tax on the basis of a contract or agreement between the assessee and the commissioner by giving the assessee certain concessions not permissible in law because of the reduced paying capacity of the assessee or because the prospects of having the assessments sustained in appeal were not very bright, in return for the assessee's agreeing to be assessed on incomes which might not otherwise be taxable. Further a disclosure following a search in which unaccounted cash or other incriminating documents were discovered cannot be considered a voluntary one. 3. The Board desire that the instructions cited para 2 above should be followed scrupulously so as to avoid recurrence of such in future.
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