Voluntary revised return defeats concealment penalty where factual findings support no inference of concealment.

Penalty under Section 271(1)(c) was not sustainable where the assessee had filed a voluntary revised return before the Income-tax Officer commenced hearing and the Tribunal found, on the totality of the circumstances, that concealment could not be inferred. The absence of an express statement in the original return was treated as insufficient to override the evidentiary value of the revised return. The High Court held that these were findings of fact, that they were justified on the record, and that the unchallenged factual basis supported cancellation of the penalty.

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Issues: Whether the Tribunal was justified in cancelling the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961, and whether the Explanation to that provision could be invoked on the facts found.

Analysis: The Tribunal found that the assessee had filed a revised return voluntarily before the Income-tax Officer commenced hearing, and that in the totality of the circumstances concealment could not be inferred. The Tribunal treated the absence of an express statement in the original return as insufficient to displace the evidentiary value of the voluntary revised return. The Court held that this was a finding of fact, that it was justified on the record, and that the factual findings had not been challenged. On that basis, the penalty could not be sustained.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Department; the cancellation of penalty was upheld.

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