Gift-tax concealment penalty fails where all primary facts are disclosed and only the legal inference is disputed.

Penalty under section 17(1)(c) of the Gift-tax Act was not leviable where the assessee disclosed all primary facts in the return and before the assessing authority, and the dispute concerned only the legal character of the transactions. The court treated the issue as one of inference from fully disclosed facts, not concealment or furnishing of inaccurate particulars. As the relevant transfers, consideration and payments had been placed on record, the essential ingredients for concealment penalty were not established, and the penalty order was held unsustainable on the facts found.

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Issues: Whether penalty under section 17(1)(c) of the Gift-tax Act, 1958 was leviable when the assessee had disclosed all primary facts and the additions were made on the footing that certain transfers and payments amounted to taxable gifts.

Analysis: Penalty under section 17(1)(c) is attracted only where the assessee conceals particulars of a gift or deliberately furnishes inaccurate particulars. The disclosed facts showed that the relevant transfers, consideration, and payments were placed before the assessing authority along with the return. The dispute concerned the legal character of those transactions and whether the payments were maintenance expenses or gifts. On the finding that all material facts necessary for assessment had been disclosed, and absent any deliberate concealment or furnishing of inaccurate particulars, the essential ingredients for penalty were not established.

Conclusion: Penalty under section 17(1)(c) was not leviable and the finding in favour of the assessee was .

Final Conclusion: The question referred was answered against the Revenue, and the penalty order was not sustainable on the facts found.

Ratio Decidendi: Penalty for concealment cannot be imposed where the assessee has disclosed all primary facts and the dispute is only about the legal inference to be drawn from those facts.

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