Additional income disclosed only after reassessment detection under s 148-penalty under s 271(1)(c) upheld despite surrender.

Penalty under s 271(1)(c) was in issue where additional income was offered only after detection in reassessment proceedings. The HC held that "concealment" and "furnishing inaccurate particulars" under s 271(1)(c) do not require proof of deliberateness, as the statutory term "deliberately" was deleted with effect from 1 April 1964. It further held that a surrender in a purported revised return, when prompted by detection, is not voluntary and is of no consequence; "omission" connotes an intentional act, and the disclosure was merely a veiled attempt to mitigate. A return filed pursuant to s 148 cannot be equated with a revised return for claiming mitigation. Penalty was upheld; issue answered for the Revenue.

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Issues Involved:
The issue involves the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961 on the assessee for concealing income and furnishing inaccurate particulars of income.

Summary:
The Kerala High Court was presented with a question referred by the Tribunal regarding the correctness of sustaining the penalty u/s 271(1)(c) of the Income-tax Act. The case involved a partnership firm engaged in the foodgrains business where discrepancies were found in the treatment of credit sales as cash sales. Despite the assessee's argument that the income was spread over multiple years and there was no deliberate intention to understate income, the authorities upheld the penalty. The court analyzed the provisions of section 271(1)(c) and the implications of concealing income or furnishing inaccurate particulars. It was noted that the deletion of the word "deliberately" from the provision in 1964 made the circumstances of concealment and inaccurate particulars distinct but with similar effects. The court emphasized that concealment involves intentional suppression of truth to the detriment of tax authorities.

In the context of filing revised returns to rectify omissions, the court clarified that voluntary disclosure in a revised return may not absolve the assessee of blameworthiness if concealment was initially detected by the assessing authority. The court distinguished between voluntary surrender of income in a revised return and disclosure prompted by detection, stating that the latter does not mitigate the offense. Additionally, the court highlighted that a return filed in response to a notice u/s 148 cannot be equated with a revised return. Therefore, the court concluded that the filing of returns including the agreed concealed income does not constitute a mitigating circumstance, and the penalty was rightfully imposed. The court ruled in favor of the Revenue and against the assessee, disposing of the references accordingly.

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