Concealment penalty requires conscious nondisclosure in the return, not mere preparatory entries by a deceased karta.

Penalty for concealment under section 28(1)(c) of the Income-tax Act, 1922 requires conscious concealment from the assessing authority or deliberate furnishing of inaccurate particulars in the return. Where a guardian filed the return for a Hindu undivided family after the karta's death, and the alleged omissions and fictitious entries were made earlier by the deceased karta in the books, the requisite guilty knowledge was absent in the person filing the return. Preparation to conceal income, without concealment in the return itself, was insufficient. The continuity of the family did not by itself establish penalty liability. The penalty was therefore not validly imposed.

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Issues: Whether penalty under section 28(1)(c) of the Income-tax Act, 1922 was validly imposed where the return was filed by the guardian of a Hindu undivided family after the death of the karta and the concealment, if any, was attributable to the deceased karta.

Analysis: Penalty under section 28(1)(c) lies only where there is conscious concealment of income or deliberate furnishing of inaccurate particulars to the assessing authority. On the findings, the person who filed the return on behalf of the assessee had no guilty knowledge and was not conscious of any concealment. The alleged omissions and fictitious entries were made by the deceased karta in the books maintained by him before any return was filed, and amounted at most to preparation to conceal income. Such preparation, without concealment from the Income-tax Officer in the return, did not satisfy the statutory requirement. The continuity of the Hindu undivided family did not by itself make the family liable for penalty in the absence of conscious concealment in the return filed on its behalf.

Conclusion: The penalty was not validly imposed and the question referred was answered in the negative, in favour of the assessee.

Ratio Decidendi: Penalty for concealment under section 28(1)(c) requires conscious concealment from the assessing authority or deliberate furnishing of inaccurate particulars in the return filed on behalf of the assessee.

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