Penalty for concealment of income may rest on high probability and assessment findings as prima facie evidence.

Penalty under section 28(1)(c) of the Indian Income-tax Act is penal in character, so the department must prove concealment of income or deliberate furnishing of inaccurate particulars. The standard is not proof beyond reasonable doubt, but a high degree of probability appropriate to quasi-criminal proceedings, and assessment findings may serve as prima facie material in penalty proceedings. On the facts, the assessee failed to substantiate the claim that the cash credits were capital brought from Burma, and the record justified an inference of concealment or inaccurate particulars. The penalty was therefore sustained against the assessee.

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Issues: Whether penalty under section 28(1)(c) of the Indian Income-tax Act was validly imposed on the assessee for concealment of income or deliberate furnishing of inaccurate particulars.

Analysis: Penalty proceedings under the Act are penal in character and the department bears the burden of proving the charge. The standard of proof is not proof beyond all doubt, but a high degree of probability appropriate to quasi-criminal proceedings. The assessment finding that the cash credits represented taxable income could be relied upon as prima facie material in the penalty proceedings. On the facts, the assessee was unable to substantiate the explanation that the credits represented capital brought from Burma, and the material on record justified the inference that the entries concealed income or furnished inaccurate particulars.

Conclusion: The penalty was validly sustained; the issue was decided against the assessee and in favour of the Revenue.

Ratio Decidendi: In penalty proceedings under section 28(1)(c) of the Indian Income-tax Act, the department must establish the charge, but it may do so on a high degree of probability and may rely on assessment findings as prima facie evidence of concealment or inaccurate particulars.

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