Concealment penalty requires proof of deliberate omission; a bona fide mistake in reporting dividend income is not enough.

Penalty for concealment under section 28(1)(c) required proof that the omission of dividend income was deliberate and intended to evade tax. A mere omission, without evidence of falsity, lack of bona fides, or surrounding circumstances showing concealment, was insufficient. The assessee's explanation that dividend income had earlier been returned on receipt basis, that the correct legal position was later understood, and that a revised return was then filed for the earlier year supported a bona fide mistake. The size of the omitted amount did not by itself establish concealment. Penalty was therefore not sustainable because the Tribunal had proceeded on an incorrect view of the legal position on inclusion of dividend income.

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Issues: Whether the assessee's omission to include dividend income in the return amounted to concealment of income or deliberate furnishing of inaccurate particulars so as to justify penalty under section 28(1)(c) of the Indian Income-tax Act, 1922.

Analysis: Penalty for concealment requires evidence that the omission was attributable to an intention or desire to hide income and evade tax. A mere omission, without supporting evidence or surrounding circumstances showing deliberate falsity or lack of bona fides, is not enough. The explanation that the assessee had earlier been returning dividend income on receipt basis, later understood the correct legal position, included dividend income in the next return, and thereafter filed a revised return for the earlier year was consistent with a bona fide mistake. The fact that the omitted amount was large did not by itself establish concealment. The conclusion of the Tribunal rested on an incorrect view that dividend income had to be included in the year of declaration, which was not the correct legal position.

Conclusion: The omission did not amount to concealment of income or deliberate furnishing of inaccurate particulars, and penalty under section 28(1)(c) was not sustainable.

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