Loss return reduced in assessment, but concealment penalty under section 271(1)(c) was not leviable.

Where the return disclosed a loss and the assessment only reduced that loss, concealment penalty under section 271(1)(c) was held not to apply because both figures remained within the field of loss. The penalty sustained by the first appellate authority was therefore cancelled.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the return showed a loss and the assessment resulted in a reduced loss.

Analysis: The assessment did not result in positive income but only in reduction of the loss returned by the assessee. The governing view accepted by the Court was that, on such facts, concealment penalty under section 271(1)(c) is not attracted when both the returned figure and the assessed figure remain in the field of loss.

Conclusion: Penalty under section 271(1)(c) was not leviable and the penalty sustained by the first appellate authority was cancelled.

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