Deemed inclusion of spouse's income does not automatically support concealment penalty for the assessee's own income.

A statutory direction to include a spouse's income in assessment did not, by itself, make that income the assessee's own income for concealment penalty purposes. The scheme of the Income-tax Act distinguished between the assessee's total income and income of another person included by a deeming provision. As section 28(1)(c) penalised concealment of the assessee's own income, failure to disclose the wife's deemed-includible income was not treated as concealment of "his income". The result was that penalty under section 28(1)(c) was held inapplicable on these facts.

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Issues: Whether the assessee's failure to include his wife's income, which was deemed to be includible in his total income under section 16(3)(a)(iii), justified penalty under section 28(1)(c).

Analysis: The relevant scheme of the Income-tax Act distinguished between the assessee's own total income and income of another person which, by a specific deeming provision, had to be included for assessment purposes. Section 22(1) required a return of the assessee's total income, and section 28(1)(c) penalised concealment of particulars of the assessee's own income. The inclusion mandated by section 16(3)(a)(iii) did not convert the wife's income into the husband's income in the strict sense. On that basis, the omission to show such income in the return was not treated as concealment of "his income" within section 28(1)(c).

Conclusion: The failure to include the wife's income did not attract penalty under section 28(1)(c), and the answer was in favour of the assessee.

Ratio Decidendi: A statutory direction to include another person's income in assessment does not, by itself, make that income the assessee's own income for the purpose of penalty for concealment unless the penalty provision clearly extends to such deemed income.

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