Concealment penalty requires proof of deliberate culpable conduct; an assessment addition alone is not enough.

Penalty under section 28(1)(c) could not be sustained where the assessed addition arose from the assessee's stock explanation and did not amount to a clear admission of concealment. The court held that an addition in assessment is not, by itself, conclusive proof of deliberate concealment or contumacious conduct. Because part of the explanation was accepted and only part of the stock remained unexplained, the revenue failed to establish the culpable element required for penalty. The answer to the referred question was therefore in the negative, and the assessee was held not liable to penalty on the facts proved.

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Issues: Whether penalty was leviable under section 28(1)(c) on the facts found, when the addition in assessment rested on the assessee's explanation about stock and no clear admission of concealment was established.

Analysis: The addition sustained in assessment was not treated as a conclusive admission of concealment. The explanation initially offered by the assessee was found partly acceptable, and only a part of the stock remained unexplained. The penalty finding therefore had to rest on proof of deliberate concealment or similarly contumacious conduct, not merely on the existence of an addition to income. On the record, the Tribunal was justified in holding that the department had not established the necessary element of concealment required for penalty.

Conclusion: Penalty was not leviable, and the answer to the referred question was in the negative, against the department.

Final Conclusion: The reference was answered by holding that the assessee was not liable to penalty on the facts proved, as the material did not establish deliberate concealment of income.

Ratio Decidendi: Penalty for concealment cannot be imposed unless the revenue establishes deliberate concealment or equivalent culpable conduct; a mere assessed addition, without more, is insufficient.

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