Penalty burden under Section 271(1)(c) stayed with Revenue; remand upheld after Tribunal found insufficient material.

Penalty under Section 271(1)(c) could not be sustained where the Explanation did not apply and the Revenue failed to discharge the initial burden of proving concealment or furnishing of inaccurate particulars. The Tribunal found the record insufficient to shift that burden to the assessee, so setting aside the penalty order was justified. A remand for fresh decision after allowing the assessee to produce material caused no actionable prejudice to the Revenue. The High Court therefore upheld the remand and answered the reference in favour of the assessee.

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Issues: Whether the Appellate Tribunal was justified in setting aside the penalty order under Section 271(1)(c) of the Income-tax Act, 1961 and remanding the matter to the Inspecting Assistant Commissioner for fresh decision.

Analysis: The penalty provision was not governed by the Explanation to Section 271(1)(c), so the initial burden lay on the Revenue to establish a case for penalty. The Tribunal found that the material on record was insufficient to show that this initial burden had been discharged. Once the burden had not shifted to the assessee, the penalty order could rightly be set aside. The direction to rehear the matter after giving the assessee an opportunity to produce material did not prejudice the Revenue in a manner giving rise to grievance.

Conclusion: The remand order was justified and the question referred was answered in the affirmative, against the Revenue and in favour of the assessee.

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