Penalty under Section 271(1)(c) sustained only when concealment findings are factual and burden under the Explanation is not displaced.

The Explanation to Section 271(1)(c) places the burden on the assessee to show absence of fraud, gross neglect or wilful neglect. Where the Tribunal, on appraisal of the facts, finds that the assessee has discharged that burden and has neither concealed income nor furnished inaccurate particulars, that finding is factual and does not by itself raise a question of law. The Tribunal's cancellation of penalty was therefore sustained, and its reasoning was not vitiated by reference to the pre-Explanation position.

---

---

Issues: Whether the penalty under Section 271(1)(c) of the Income-tax Act, 1961, was rightly cancelled on the finding that the assessee had neither concealed income nor furnished inaccurate particulars.

Analysis: The Explanation to Section 271(1)(c) shifts the burden to the assessee to prove absence of fraud, gross neglect, or wilful neglect. Where the Tribunal, on appraisal of the relevant facts, records a finding that the assessee has discharged that burden and is not guilty of concealment or furnishing inaccurate particulars, the conclusion is one of fact and does not give rise to a question of law. On the facts found, the Tribunal's decision was not vitiated by any reliance on the earlier principle governing the pre-Explanation position.

Conclusion: The cancellation of penalty was upheld and the answer to the question was in favour of the assessee and against the Revenue.

---