Penalty for concealment fails where assessment additions alone do not prove conscious concealment or revenue income.

Penalty under section 271(1)(c) was held not sustainable where the assessment additions did not, by themselves, prove concealment or furnishing of inaccurate particulars. The Tribunal found that the alleged receipt from one source was not proved, a loan could not be treated as income, another receipt was not taxable, and the excess expenditure and bank credits were not shown to be revenue income. Because penalty proceedings are penal in character, the department had to establish conscious concealment or deliberate inaccuracy, and it failed to show that the amount assessed as income from undisclosed sources was income of a revenue nature.

---

---

Issues: Whether, on the facts found, penalty under section 271(1)(c) of the Income-tax Act, 1961 was attracted for concealment of income or furnishing inaccurate particulars in respect of the assessee's receipts and the amount assessed as income from undisclosed sources.

Analysis: The assessment findings did not, by themselves, establish concealment for penalty purposes. The Tribunal found that the alleged receipts from one source were not proved, that a loan was not income, and that another receipt was not taxable. It also found that the excess expenditure and bank credits were not shown to represent revenue income and that the department had not proved that the amount assessed as income from undisclosed sources was income of a revenue nature. Applying the principle that penalty proceedings are penal in character and that the department must prove conscious concealment or deliberate furnishing of inaccurate particulars, the Tribunal held that the statutory conditions for penalty were not satisfied.

Conclusion: Penalty under section 271(1)(c) was not sustainable, and the cancellation of the penalty was ?

Ratio Decidendi: In penalty proceedings for concealment, the department must prove that the disputed amount is income of a revenue nature and that the assessee consciously concealed income or furnished inaccurate particulars; an assessment addition alone is not conclusive.

---