Concealment penalty not attracted when omitted income is disclosed in reassessment return and accepted without additions.

Penalty for concealment was not attracted where the assessee disclosed the omitted long-term capital gain in the return filed in response to notice under section 148 and the reassessment was completed on that return without any addition. The concealment test under section 271(1)(c) requires a finding of concealed particulars or inaccurate particulars, and Explanation 1 applies only where the explanation is false, unsubstantiated, or not bona fide with full disclosure of material facts. On these facts, the omission from the original return alone did not sustain penalty, and the issue was decided in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable when the assessee disclosed the omitted long-term capital gain in the return filed in response to notice under section 148 and the reassessment was completed accepting that return without additions.

Analysis: Penalty for concealment depends on a finding that the assessee concealed particulars of income or furnished inaccurate particulars. Explanation 1 deems concealment only where the explanation is false, unsubstantiated, or not shown to be bona fide with full disclosure of material facts. In the present case, the reassessment return included the long-term capital gain and the assessing authority completed the assessment on that return without making any addition or disallowance. On those facts, the concealment test could not be applied merely by comparing the original return with the return filed in response to notice under section 148.

Conclusion: Penalty under section 271(1)(c) was not sustainable and the issue was decided in favour of the assessee.

Ratio Decidendi: Where income omitted from the original return is voluntarily included in the return filed in response to reassessment notice and the assessment is completed accepting that return without additions, concealment penalty is not attracted merely because the income was not offered in the original return.

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