Penalty for concealment requires proof of concealment; later Explanation did not apply to earlier reassessment proceedings.

Penalty under section 271(1)(c) could not be levied without proof of concealment, and an agreement to be assessed at a particular figure did not by itself establish concealment. Because the assessment and reassessment related to an earlier period under the 1922 Act and were completed before 1 April 1964, the Explanation inserted from that date did not apply. The Revenue was therefore required to prove concealment independently before penalty could be imposed, and the issue was decided in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be imposed in the absence of proof of concealment, and whether the Explanation added with effect from 1 April 1964 applied to the case.

Analysis: The assessment and reassessment proceedings related to an earlier period under the Indian Income-tax Act, 1922, and the return and reassessment were completed before 1 April 1964. In that setting, the statutory Explanation relied upon by the Revenue did not govern the matter. The Tribunal's view that an agreement to be assessed at a particular figure did not by itself establish concealment was upheld, and the Revenue was required to prove concealment before penalty could be levied.

Conclusion: Penalty under section 271(1)(c) could not be sustained without proof of concealment, and the question was answered in favour of the assessee and against the Revenue.

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