False disclosure in return cannot defeat penalty for inaccurate particulars where the explanation to section 271(1)(c) remains unrebutted.

A disclosure of prize-money receipts in Part IV of a return did not protect the assessee from penalty under section 271(1)(c) where the claim was found to be false and used to camouflage concealed income. The inclusion of the figure in the return was held not to amount to an honest, true and full disclosure, because the Explanation to section 271(1)(c) was not rebutted. On that basis, disclosure of the receipt did not prevent a finding of inaccurate particulars, and the penalty was treated as sustainable on the issues considered.

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Issues: (i) Whether disclosure of prize-money receipts in Part IV of the return prevented the assessee from being treated as having furnished inaccurate particulars of income under section 271(1)(c) of the Income-tax Act, 1961. (ii) Whether such disclosure could be regarded as a true and full disclosure so as to justify deletion of penalty under section 271(1)(c) of the Income-tax Act, 1961.

Issue (i): Whether disclosure of prize-money receipts in Part IV of the return prevented the assessee from being treated as having furnished inaccurate particulars of income under section 271(1)(c) of the Income-tax Act, 1961.

Analysis: The disclosure made in Part IV was not accepted as an honest explanation of the source of the receipt. The amount shown as prize money was found to be a false description of concealed income, and the mere inclusion of that figure in Part IV did not neutralise the effect of the inaccurate particulars furnished in the return.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether such disclosure could be regarded as a true and full disclosure so as to justify deletion of penalty under section 271(1)(c) of the Income-tax Act, 1961.

Analysis: A disclosure can afford protection only if it is truthful and bona fide. On the facts found, the claim of crossword prize money was false, and the disclosure in Part IV was merely a camouflage for unaccounted income. The presumption under the Explanation was not rebutted.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered by holding that the penalty under section 271(1)(c) was sustainable on the two questions decided, while the third question was not answered as not arising from the Tribunal's decision.

Ratio Decidendi: A false disclosure in Part IV of a return does not amount to a bona fide or full disclosure and cannot protect the assessee from penalty for concealment or furnishing inaccurate particulars where the Explanation to section 271(1)(c) is not rebutted.

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