Penalty for concealment requires proof of wilful suppression; an unsatisfactory explanation alone is not enough.

Penalty under section 28(1)(c) of the Income-tax Act, 1922 is penal in nature, so the revenue must prove concealment of income or deliberate furnishing of inaccurate particulars. A mere rejection of the assessee's explanation in assessment proceedings, or an adverse inference that the source of an investment was not satisfactorily explained, is not enough by itself to establish wilful concealment. Where the record does not show a positive finding of wilful suppression and the department fails to discharge its burden, no penalty is imposable under the provision.

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Issues: Whether, on the facts and circumstances of the case, penalty was imposable upon the assessee under section 28(1)(c) of the Income-tax Act, 1922.

Analysis: A proceeding for penalty under section 28(1)(c) is penal in nature, and the burden lies on the revenue to establish concealment of income or deliberate furnishing of inaccurate particulars. The mere rejection of the assessee's explanation in the assessment proceedings, or an adverse finding that the source of an investment was not satisfactorily explained, does not by itself amount to proof of wilful concealment. The material on record did not show a positive finding of wilful suppression by the assessee, and the department failed to discharge the burden required for imposition of penalty.

Conclusion: No penalty was imposable under section 28(1)(c) of the Income-tax Act, 1922, and the question was answered in favour of the assessee.

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