Concealment penalty can survive nil income after loss set-off when inaccurate particulars or concealment is established.

Penalty for concealment under section 271(1)(c) is not defeated merely because the assessed result becomes nil or a loss after set-off of carried forward losses; the relevant question is whether the return or assessment involved concealment of income or furnishing of inaccurate particulars. The arithmetic end-result after adjustment does not control the penalty inquiry. The appeal was allowed, and the penalty was sustained in favour of the Revenue.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be cancelled merely because the assessed result was a loss or nil income after set-off of carried forward losses.

Analysis: The controlling principle applied was that penalty for concealment is not defeated merely because the assessed income ultimately becomes nil after adjustment of earlier losses. The relevant consideration is whether there was concealment or furnishing of inaccurate particulars in the return and assessment proceedings, not the arithmetical end-result after set-off.

Conclusion: The appeal was allowed and the penalty issue was decided against the assessee and in favour of the Revenue.

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