Income as returned means disclosed income, and concealment affects only penalty quantum within the statutory maximum.

For computing the maximum penalty for concealment, the expression "income as returned" refers to income disclosed in the return, not additions made later by the assessing officer for want of evidence. Read with the return-and-assessment scheme, the statutory comparison is between tax on the returned income and tax on the finally assessed income; the tax allegedly avoided is not confined to the concealed item alone. The extent of concealment matters only in fixing the penalty within the statutory ceiling, not in calculating that ceiling. The reference was answered in favour of the Revenue.

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Issues: Whether, for computing the maximum penalty under section 28(1)(c), the expression "income as returned" includes items added in assessment only because of lack of evidence, though not actually shown in the return.

Analysis: The provision was read in the setting of the return and assessment scheme under sections 22 and 23 of the Indian Income-tax Act, 1922. The expression "income as returned" was held to mean the income disclosed by the assessee in the return and not the income computed by the Income-tax Officer after making additions. The words "income-tax and super-tax avoided" were construed in context to refer to the tax that would have escaped assessment if the return had been accepted as correct, and not merely the tax referable to the specific concealed item. The extent of concealment was held relevant only to the quantum of penalty within the statutory maximum, not to the computation of that maximum.

Conclusion: The question was answered in the negative. For section 28(1)(c), "income as returned" does not include items added in assessment solely on the ground of lack of evidence, and the maximum penalty is computed by reference to the difference between tax on the returned income and tax on the assessed income.

Final Conclusion: The reference was answered in favour of the Revenue, and the assessee remained liable to bear the costs.

Ratio Decidendi: In computing the maximum penalty for concealment, the statutory comparison is between the income disclosed in the return and the income finally assessed, while the extent of concealment affects only the penalty imposed within that maximum.

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