Income tax on sale of property

Dear Sir

One person sold his house for Rs.  X  during 2005 and purchased a flat for Rs. Y.  The amount Y is just 25% of the sale amount. The balance 75% he is not shown in his IT Return  during the FY 2005-06. Now some one taken  the same to IT department notice.  Is there any problem to the seller / purchaser since it it almost 14 year over. If they found the default what was the penalty 

Regards