Penalty under Section 271(1)(c) turns on discharge of burden under Explanation 2 and factual findings

Penalty under Section 271(1)(c) was examined in the context of Explanation 2 and the assessee's burden to displace the presumption of concealment or inaccurate particulars. The Tribunal held that the assessee had successfully discharged the negative burden on the facts, and that finding was treated as essentially factual and accepted. On that basis, the penalty was not sustained, with the issue resolved in favour of the assessee and against the Revenue.

---

---

Issues: Whether the assessee had discharged the burden under Explanation 2 to Section 271(1)(c) of the Income-tax Act, 1961, and whether penalty under Section 271(1)(c) was attracted on the facts of the case.

Analysis: The Tribunal had set aside the penalty on the basis that the assessee had successfully discharged the negative burden under Explanation 2 to Section 271(1)(c). The question whether that burden stood discharged was treated as essentially one of fact, and the factual finding recorded by the Tribunal on that aspect was accepted.

Conclusion: The questions were answered in the affirmative, in favour of the assessee and against the Revenue.

---