Bona fide estimated returns defeat concealment penalty when the Revenue only substitutes a higher income estimate without proving false particulars.

Penalty under section 271(1)(c) was not sustainable where the returns were filed on bona fide estimates after the assessee explained that the account books had been destroyed in a fire. The Tribunal accepted that explanation and found no deliberate withholding of books. The assessment merely replaced the assessee's estimates with higher estimates for business income, but the Revenue did not prove fraudulent estimation, concealment, or furnishing of inaccurate particulars. Even with the statutory Explanation, concealment was not established on these facts, so penalty could not be imposed.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961, was exigible on the facts where the returned income was based on estimates and the assessed income was higher than the returned income.

Analysis: The returns for the relevant assessment years were filed on estimates after the assessee claimed that the account books had been destroyed in fire. The Tribunal accepted that explanation and found that no books were deliberately withheld. The assessment orders merely substituted higher estimates for income from the cinema business and power looms, and there was nothing to show that the assessee's estimates were fraudulent or that a deliberate false estimate had been made. Even with the Explanation to section 271(1)(c), concealment or furnishing of inaccurate particulars was not established on these facts.

Conclusion: Penalty under section 271(1)(c) was not valid and the finding was in favour of the assessee.

Ratio Decidendi: Where the return is based on bona fide estimates and the Revenue only substitutes a higher estimate without proving deliberate concealment or false estimation, penalty for concealment cannot be sustained, even with the aid of the statutory Explanation.

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