Tribunal cancels penalty for incorrect stock value disclosure, citing credible explanation and absence of guilty intention. Increased declared loss.

The Tribunal canceled the penalty imposed on the assessee under section 271(1)(c) for failure to disclose the correct value of closing stock, resulting in an increased declared loss. The Tribunal found the explanation provided by the assessee credible, noting the absence of any benefit to the assessee or loss to the Revenue due to the error, which was promptly admitted. It was concluded that there was no guilty intention on the part of the assessee, leading to the cancellation of the penalty and allowing the appeal.

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Issues involved: Appeal against penalty u/s 271(1)(c) for concealment of income in the assessment for asst. yr. 1979-80.

Summary:
The assessee appealed against a penalty of Rs. 60,000 u/s 271(1)(c) imposed for not disclosing the correct value of closing stock, resulting in an enhanced loss declared. The CIT(A) upheld the penalty stating no mala fides were required for concealment. The assessee claimed the omission was inadvertent and submitted explanations. The learned counsel argued the absence of guilty intention due to continuous heavy losses and cited precedents. The Departmental Representative argued that negligence amounts to concealment, supported by legal judgments. After considering submissions and judgments, the Tribunal found the assessee's explanation credible. The Tribunal noted the absence of any gain to the assessee or loss to the Revenue due to the mistake, which was admitted promptly. Expln. 4(a) to s. 271(1)(c) applies to positive income, not assessed loss. The Tribunal concluded the assessee had no guilty intention, canceling the penalty and allowing the appeal.

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