Penalty for concealment was not exigible where the assessee satisfactorily explained the disputed additions and supported the explanation with evidence.

Penalty under section 271(1)(c) was not exigible where the Tribunal accepted the assessee's explanation and supporting evidence for the disputed commission and draft additions. On those findings, the assessee had discharged the burden of showing that the amounts were not attributable to concealment, gross or wilful neglect, or fraud. The Court found no error in the Tribunal's cancellation of penalty and upheld the relief in favour of the assessee.

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Issues: Whether, on the facts and in the circumstances of the case, penalty under section 271(1)(c) of the Income-tax Act, 1961 was exigible.

Analysis: The Tribunal had accepted the assessee's explanation and evidence in respect of both the commission addition and the drafts addition. On those findings, the assessee was held to have produced relevant and sufficient material to show that the disputed amounts were not the result of concealment, gross or wilful neglect, or fraud. Applying the principle that penalty is not exigible where the assessee discharges the onus of explaining the addition, the Court saw no error in the Tribunal's cancellation of penalty.

Conclusion: Penalty under section 271(1)(c) was not exigible and the cancellation of penalty was / upheld in favour of the assessee.

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