Penalty for concealed income requires clear proof of conscious concealment; mere surrender for taxation is not enough.

Penalty under section 271(1)(c) requires the Revenue to prove that the amount represented income of the relevant year and that the assessee consciously concealed income or furnished inaccurate particulars. An assessment finding may be relevant, but it is not conclusive for penalty. Here, the disclosure petition surrendering peak hundi credits and asking for spread-over treatment did not amount to a clear admission that the sum was the assessee's income for the year in question. A mere offer of the amount for taxation, without cogent material showing a revenue receipt in that year, was insufficient to sustain penalty.

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Issues: Whether the assessee's disclosure petition constituted an admission of concealed income so as to justify penalty under section 271(1)(c) of the Income-tax Act, 1961.

Analysis: Penalty proceedings are penal in character and the burden lies on the Revenue to prove that the disputed amount represented income of the relevant year and that the assessee consciously concealed income or furnished inaccurate particulars. A finding in assessment is relevant but not conclusive for penalty. On the facts, the disclosure petition showed surrender of peak hundi credits for assessment and a request to spread the amount over several years, but it did not amount to a clear admission that the amount represented the assessee's income of the year in question. Mere offer of the amount for taxation, without cogent material showing revenue receipt in the relevant year, was insufficient to sustain penalty.

Conclusion: The disclosure petition did not amount to an admission of concealed income, and penalty under section 271(1)(c) was not sustainable.

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