Penalty for concealment cannot rest only on assessment findings; concealment must be proved separately in penalty proceedings.

Penalty under section 28(1)(c) of the Indian Income-tax Act, 1922 requires the department to establish concealment in the penalty proceedings; findings in the quantum assessment are relevant but not conclusive, and a false explanation by itself does not automatically prove concealment. Applying that principle, the penalty was held unsustainable because it rested entirely on the assessment findings and rejection of the assessee's explanation.

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Issues: Whether penalty under section 28(1)(c) of the Indian Income-tax Act, 1922 was leviable on the facts of the case.

Analysis: The penalty was founded entirely on findings recorded in the quantum assessment and on the rejection of the assessee's explanation. The governing principle applied was that concealment must be established by the department in penalty proceedings, and a false explanation by itself does not conclusively prove concealment. Findings in assessment proceedings may be relevant, but they are not conclusive for penalty purposes.

Conclusion: The question was answered in the negative. The penalty was not sustainable and the assessee succeeded.

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