Concealment penalty upheld for undisclosed receipts, but continuity doctrine limited the penalty to the first assessment year.

Penalty under section 271(1)(c) was attracted where the assessee omitted to disclose receipts in the original return and made disclosure only after departmental detection and notice under section 148; the initial non-disclosure remained relevant in penalty proceedings, so concealment and furnishing of inaccurate particulars were established. Where the same concealment continued across multiple assessment years, the doctrine of continuity was applied and the penalty was sustained only for the first assessment year, with deletion for the remaining years.

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Issues: (i) whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable on the assessee for non-disclosure of receipts and furnishing inaccurate particulars; (ii) whether, on the facts of continuing concealment across multiple assessment years, the penalty could be sustained for all years or only for the first assessment year on the doctrine of continuity.

Issue (i): whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable on the assessee for non-disclosure of receipts and furnishing inaccurate particulars.

Analysis: The assessee had not disclosed the relevant receipt in the original return and made disclosure only after the Department's investigation and issuance of notice under section 148. The subsequent claim of expenditure and the final outcome in the quantum proceedings did not erase the initial non-disclosure. In penalty proceedings, the assessee's conduct in the assessment stage remained material, and the case disclosed concealment as well as furnishing of inaccurate particulars.

Conclusion: Penalty under section 271(1)(c) was held to be attracted against the assessee.

Issue (ii): whether, on the facts of continuing concealment across multiple assessment years, the penalty could be sustained for all years or only for the first assessment year on the doctrine of continuity.

Analysis: The concealment was treated as a continuing and concurrent course of conduct across six assessment years. Applying the doctrine of continuity, the same default was regarded as collective, but for penalty purposes it was sufficient to sustain the penalty only in the first assessment year.

Conclusion: The penalty was confirmed only for the first assessment year and deleted for the remaining five assessment years.

Final Conclusion: The appeals were allowed in part, with the penalty upheld for the first assessment year alone and deleted for the other assessment years.

Ratio Decidendi: Where undisclosed income is voluntarily disclosed only after detection by the Department, penalty for concealment and furnishing inaccurate particulars is sustainable; if the same concealment is continuous across years, the penalty may be confined to the first year under the doctrine of continuity.

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