Concealment penalty depends on the law at the offending return date, and estimated additions do not by themselves prove concealment.

Concealment penalty under section 271(1)(c) is governed by the law in force on the date of the offending return, so later amendment does not change the basis for levy or quantification. In penalty proceedings, the revenue must prove conscious concealment of taxable income or furnishing of inaccurate particulars; mere rejection of the assessee's explanation is insufficient. An addition based only on estimates, including differing construction-cost estimates, does not by itself establish concealment. On the stated facts, penalty was not exigible on either reassessment addition.

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Issues: (i) Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 had to be quantified with reference to the law in force on the date of the original return; and (ii) whether penalty was exigible on the facts in respect of the two additions made in reassessment.

Issue (i): Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 had to be quantified with reference to the law in force on the date of the original return.

Analysis: The applicable law for levy and quantification of concealment penalty is the law prevailing on the date when the offence of concealment is committed, namely, the date of the offending return. The later amendment to section 271(1)(c) did not alter this principle for the present case. Since the original return was filed on 26 July 1961, the pre-amendment statutory regime governed the measure of penalty.

Conclusion: The penalty, if leviable, had to be computed under the law in force on the date of the original return, not under the amended provision.

Issue (ii): Whether penalty was exigible on the facts in respect of the two additions made in reassessment.

Analysis: For the loan repayment addition, the revenue established only that the assessee's explanation was not accepted; that by itself did not prove that the amount constituted taxable income consciously concealed. The lapse of time, the death of a material person, and the absence of proof that the sum represented income prevented a finding of concealment. For the building-construction addition, the figure was based on differing estimates of cost of construction, and a penalty could not rest merely on an estimated addition. In penalty proceedings, the burden remained on the revenue to prove concealment or furnishing of inaccurate particulars, and that burden was not discharged.

Conclusion: Penalty under section 271(1)(c) was not exigible on either addition and was rightly cancelled.

Final Conclusion: The concealment penalty failed on both the applicable-law question and the merits, so the assessee succeeded and the revenue's challenge did not survive.

Ratio Decidendi: In concealment penalty cases, liability and quantification are governed by the law in force on the date of the offending return, and a mere rejection of the assessee's explanation or an estimated addition does not by itself justify penalty unless the revenue proves conscious concealment of taxable income.

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