Amendment to Section 271: New Explanation 5 targets undisclosed assets found in searches, imposing penalties for income concealment.

Section 271 of the Income-tax Act, 1961, is amended to include a new Explanation 5, effective from October 1, 1984. This explanation addresses situations where, during a search under section 132, an assessee is found possessing undisclosed assets. If these assets relate to income from a previous year, either not declared in a return or declared after the search, the assessee is deemed to have concealed income. This holds unless the income or transactions are recorded in the books of account before the search or disclosed to the Commissioner beforehand. This provision facilitates the imposition of penalties for concealment of income.

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