Concealment penalty requires proof by revenue; an unsatisfactory explanation alone does not establish deliberate suppression.

Penalty under Section 28(1)(c) of the Income-tax Act, 1922 is penal in character, so the revenue must affirmatively prove concealment of income or deliberate furnishing of inaccurate particulars. A mere rejection of the assessee's explanation in the quantum assessment does not, by itself, establish wilful suppression for penalty purposes. On the facts noted, the assessee's explanation for the credit entry was plausible and the record did not contain material sufficient to show that it was false or that concealment had been proved. The penalty was therefore not validly imposed, and the reference was answered in favour of the assessee.

---

---

Issues: Whether penalty under Section 28(1)(c) of the Income-tax Act, 1922 was validly imposed for concealment of income or deliberate furnishing of inaccurate particulars, and whether the burden lay on the revenue to establish the requisite ingredients.

Analysis: The proceeding for penalty under Section 28(1)(c) is penal in character, and the onus rests on the revenue to prove concealment of income or deliberate furnishing of inaccurate particulars. A mere rejection of the assessee's explanation in the quantum assessment does not by itself establish wilful suppression. On the record, the assessee had offered a plausible explanation for the credit entry, and there was no material sufficient to support a finding that the explanation was false or that concealment had been proved for penalty purposes.

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

Final Conclusion: The reference was answered against the revenue, and the penalty order was set aside in substance by holding that the statutory ingredients for concealment penalty were not established.

Ratio Decidendi: In a penalty proceeding for concealment of income, the revenue must affirmatively prove the statutory ingredients, and an unsatisfactory explanation in assessment proceedings is insufficient without material showing deliberate concealment or inaccurate particulars.

---