Concealment penalty not sustainable when income is disclosed in reassessment after an original return had already been filed.

Penalty for concealment was held unsustainable where the assessee had already filed a return under section 139 and later disclosed long-term capital gains in a revised computation during reassessment. Explanation 3 to section 271(1)(c) was found inapplicable because it operates where no return is filed within the prescribed time and the return is furnished only after notice under section 148. On those facts, the later disclosure in reassessment proceedings did not amount to concealment or furnishing inaccurate particulars, so penalty was not justified and was to be deleted.

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Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the assessee had originally filed a return under Section 139, later disclosed long-term capital gains in a revised computation during reassessment proceedings under Sections 147 and 148, and Explanation 3 to Section 271(1)(c) was invoked.

Analysis: The return originally filed under Section 139 had omitted the long-term capital gains, but the assessee disclosed the income in the revised computation filed in response to notice under Section 148 before the reasons for reopening were known. Explanation 3 to Section 271(1)(c) applies where no return is furnished within the period specified under Section 153 and the return is filed only after notice under Section 148. Since the assessee had already filed a return under Section 139, the deeming fiction of concealment under Explanation 3 was not attracted. The disclosure made in reassessment proceedings therefore did not amount to concealment or furnishing of inaccurate particulars for penalty purposes.

Conclusion: The penalty under Section 271(1)(c) was not justified and was directed to be deleted.

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