Penalty for concealment requires proof of statutory offence; a false explanation or assessment finding alone is insufficient.

Penalty under section 28(1)(c) of the Income-tax Act, 1922 is penal in nature, so the Department must affirmatively prove concealment of income or deliberate furnishing of inaccurate particulars. A merely false explanation does not, by itself, establish that the receipt was taxable or that the statutory offence was committed, and the assessee was therefore not liable to penalty. Assessment and penalty proceedings are distinct and self-contained; a finding in assessment does not operate as res judicata in penalty proceedings, though it may be relevant material to consider. The Court held that the Department had failed to bring home the penalty charge.

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Issues: Whether penalty under section 28(1)(c) of the Income-tax Act, 1922 was sustainable on the basis of a false explanation alone, and whether the finding in the assessment proceedings bound the penalty proceedings.

Analysis: Penalty proceedings under section 28(1)(c) are penal in nature, and the burden rests on the Department to establish concealment of income or deliberate furnishing of inaccurate particulars. A merely false explanation does not by itself prove that the receipt represents taxable income or that the statutory offence has been committed. The Court further held that assessment and penalty proceedings are distinct and self-contained, so a finding in the assessment proceedings does not operate as res judicata in penalty proceedings, though it may constitute material to be considered.

Conclusion: The Department failed to bring home the charge under section 28(1)(c), and the assessee was held not liable to penalty.

Ratio Decidendi: In penalty proceedings for concealment, the Department must affirmatively prove the statutory offence, and a false explanation or an assessment finding alone is insufficient to establish liability.

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