Penalty for concealment turns on relevant evidence; a no-penalty finding fails when the tribunal ignores material facts.

Penalty under section 28(1)(c) depended on whether the omission of income amounted to deliberate concealment and whether the Tribunal had considered relevant evidence. For one disputed item, the omission was treated as not deliberate and the no-penalty view was supported by the record. For the other item, the assessee's explanation was unproved, the omission persisted over several years, and the Tribunal relied on irrelevant material while ignoring relevant circumstances; that approach was held vitiated in law. The no-penalty finding was therefore sustained only for the first item and rejected for the second.

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Issues: Whether penalty under section 28(1)(c) of the Indian Income-tax Act, 1922, was justified in respect of the two disputed items of income and whether the Tribunal's finding deleting or sustaining penalty was in accordance with law.

Analysis: The item of Rs. 1,10,088 was held to stand on the same footing as the surrounding findings accepted by the appellate authorities, and the Tribunal's conclusion that the omission was not a deliberate concealment was supported by the record. In contrast, the item of Rs. 4,96,868 was treated differently: the assessee's explanation was not established by evidence, the omission continued for several years, and the Tribunal relied on irrelevant material while omitting relevant circumstances, including the Income-tax Officer's scrutiny of successive balance-sheets and the failure to substantiate the auditor-based explanation. A finding resting on irrelevant considerations and ignoring relevant material is vitiated in law.

Conclusion: Penalty was not called for in respect of Rs. 1,10,088, but the Tribunal's no-penalty finding in respect of Rs. 4,96,868 was not in accordance with law.

Final Conclusion: The reference was answered partly in favour of the assessee and partly in favour of the Revenue, with the Tribunal's conclusion sustained only for one item and rejected for the other.

Ratio Decidendi: A no-penalty finding under section 28(1)(c) cannot stand where it is based on irrelevant material or a failure to consider relevant evidence, especially when the assessee's explanation for omission is unproved and the surrounding facts point to sustained non-disclosure.

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