Concealment penalty depends on year-wise material; estimated under-reporting in returns can still justify penalty.

Penalty under section 271(1)(c) could not be sustained for the earlier assessment years because the addition was based on an estimated unexplained accretion to wealth allocated across years without material showing year-wise concealment; guesswork sufficient for assessment was insufficient for penalty, so cancellation for 1959-60, 1960-61 and 1961-62 was upheld. For the later years, the assessee's returned income was lower than the turnover-based estimate adopted in assessment and was unsupported by accounts; that deliberate under-estimate justified an inference of concealment or furnishing of inaccurate particulars, so penalty for 1963-64, 1964-65 and 1965-66 was sustained.

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Issues: (i) Whether penalty under section 271(1)(c) was leviable for the assessment years 1959-60, 1960-61 and 1961-62 on the basis of an unexplained accretion to wealth spread over those years; (ii) Whether penalty under section 271(1)(c) was leviable for the assessment years 1963-64, 1964-65 and 1965-66 where the assessee's returned income was lower than the income estimated on turnover.

Issue (i): Whether penalty under section 271(1)(c) was leviable for the assessment years 1959-60, 1960-61 and 1961-62 on the basis of an unexplained accretion to wealth spread over those years.

Analysis: The addition for these years rested on an estimated unexplained increase in wealth and on a further allocation of that figure across the three years. The computation involved estimates for household expenditure and marriage expenses, and there was no material showing that the particular amounts allocated to each year represented concealed income of those years. The penalty proceedings required proof of concealment or furnishing of inaccurate particulars for each year, and mere guesswork sufficient for assessment was insufficient for penalty.

Conclusion: Penalty was not leviable for the assessment years 1959-60, 1960-61 and 1961-62, and the cancellation of penalty was upheld.

Issue (ii): Whether penalty under section 271(1)(c) was leviable for the assessment years 1963-64, 1964-65 and 1965-66 where the assessee's returned income was lower than the income estimated on turnover.

Analysis: For these years, the assessment itself was made on an estimate of turnover and net profit for each year, and the assessee's own returns were based on lower percentage estimates without any supporting accounts. The lower returned figures, viewed against the estimate adopted in assessment, justified an inference of concealment or furnishing of inaccurate particulars. The fact that the assessment was estimated did not preclude penalty where the assessee's own estimate lacked bona fides and amounted to a deliberate under-estimate.

Conclusion: Penalty was leviable for the assessment years 1963-64, 1964-65 and 1965-66, and the cancellation of penalty was reversed.

Final Conclusion: The reference was answered partly against the Revenue for the earlier three years and partly in its favour for the later three years, with penalty sustained only for the latter group of assessment years.

Ratio Decidendi: Penalty for concealment cannot rest on a mere estimated or speculative allocation of income across years without material showing year-wise concealment, but a deliberate under-estimate in a taxpayer's own return can support an inference of concealment and attract penalty under section 271(1)(c).

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