Glimpses of Supreme Court Rulings

1. K. Krishnamurthy vs. The Deputy Commissioner of Income Tax

(2025) 171 taxmann.com 413 (SC)

Penalty under section 271AAA — The imposition of penalty is not mandatory - Penalty may be levied if there is undisclosed income in the specified previous year — It is obligatory on the part of the Assessing Officer to demonstrate and prove that undisclosed income of the specified previous year was found during the course of search or as a result of the search - Appellant admitted ₹2,27,65,580/- as income for AY 2011-12 during the search before DDIT (Inv.) as well as substantiated the manner in which the said undisclosed income was derived and paid tax together with interest thereon, albeit belatedly, therefore, penalty under Section 271AAA(1) was not attracted on the said amount of  ₹2,27,65,580 — Appellant had not offered in the declaration before the DDIT(Inv.) any income on land transactions belonging to Mr. Sharab Reddy and Mr. NHR Prasad Reddy — Appellant offered ₹2,49,90,000/- under the head "Income From Other Sources" on account of these land transactions during the course of assessment proceedings only and not at any time during the search — Penalty under Section 271AAA(1) of the Income-tax Act 1961 was therefore leviable on the said amount.

A Memoran