Concealment penalty requires affirmative proof of deliberate inaccuracy; mere rejection of explanation is insufficient.

Penalty under section 28(1)(c) of the Income-tax Act, 1922 is penal in character and cannot rest on a mere unsatisfactory explanation by the assessee. The revenue must affirmatively prove concealment of income or deliberate furnishing of inaccurate particulars through material independent of the failure to explain receipts or investments, and the requisite mental element must be inferable from the record. On the facts found in reassessment proceedings, concealment was not proved, so the penalty was not justified.

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Issues: Whether penalty under section 28(1)(c) of the Income-tax Act, 1922 could be imposed on the assessee on the facts found in reassessment proceedings.

Analysis: The provision was treated as penal in character and not as a mere adjunct to assessment. It was held that the revenue must establish concealment of income or deliberate furnishing of inaccurate particulars by material independent of the mere failure to explain the source of receipts or investments. A mere unsatisfactory explanation was not enough, and the necessary mental element had to be inferable from the record.

Conclusion: The charge of concealment was not proved and the penalty under section 28(1)(c) was not justified.

Ratio Decidendi: Penalty under section 28(1)(c) of the Income-tax Act, 1922 can be sustained only when concealment of income or deliberate furnishing of inaccurate particulars is affirmatively proved; mere rejection of the assessee's explanation does not by itself establish liability to penalty.

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