Penalty for concealment cannot rest on estimated income alone; culpable conduct and statutory burden remain decisive.

A mere assessment of income by estimate does not by itself make penalty under the concealment provision automatically leviable or automatically barred; the real question is whether the statutory burden under the Explanation is discharged and whether the facts show fraud, gross neglect, or wilful neglect. On the facts discussed, the Tribunal did not cancel penalty solely because the income was estimated, but also because there was no material showing culpable conduct by the assessee. The penalty deletion was therefore allowed to stand, as the reference proceeded on an incorrect factual assumption and the Tribunal's alternative reasoning was valid.

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Issues: Whether penalty under the concealment provision could be sustained merely because the assessee's income had been assessed by estimate, and whether the Tribunal was justified in cancelling the penalty on the facts of the case.

Analysis: The assessment related to a case where the income returned was substantially enhanced on estimation, and penalty had been levied after treating the Explanation to the concealment provision as attracted. The Tribunal, however, did not rest its decision only on the fact that income had been estimated; it also found that there was nothing to suggest fraud or gross or wilful neglect on the part of the assessee. A mere estimate of income does not create a rule of law or practice that penalty is either automatically leviable or automatically barred. The relevant inquiry remains whether the statutory burden under the Explanation has been discharged and whether the facts show culpable conduct.

Conclusion: Penalty was not to be interfered with on the basis assumed in the reference, and the Tribunal's deletion of the penalty was allowed to stand because the question proceeded on an incorrect factual assumption and the alternative ground recorded by the Tribunal was valid.

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