Inadvertent omission of income held to be a factual issue, leaving no referable question of law on penalty.

Whether income was concealed or omitted inadvertently was treated as a question of fact. The Tribunal accepted the assessee's explanation that failure to include property income in the return was due to confusion, since the same income had earlier been assessed in the hands of a larger Hindu undivided family and had been accepted by the department. The HC held that the Tribunal was competent to reach that factual conclusion and no error of law was shown. No referable question of law arose under section 256(2), and the finding that penalty under section 271(1)(c) was not leviable remained undisturbed.

---

---

Issues: Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no attempt to conceal income and that penalty under section 271(1)(c) of the Income-tax Act, 1961 was not leviable, so as to give rise to a referable question of law under section 256(2) of the Income-tax Act, 1961.

Analysis: The Tribunal had accepted the assessee's explanation that the omission to include property income in the return was inadvertent and arose from confusion, as the same income had earlier been shown in the hands of a larger Hindu undivided family and had been accepted by the department. The Court held that whether income was concealed or omitted inadvertently is essentially a question of fact, and that the Tribunal was competent to accept the explanation and reach that conclusion. No error of law was shown in the Tribunal's finding.

Conclusion: No question of law arose; the application under section 256(2) of the Income-tax Act, 1961 was rejected and the finding that penalty under section 271(1)(c) was not leviable stood undisturbed.

---