Concealment penalty turns on deliberate concealment itself, not the exact amount hidden, if within the statutory maximum.

Where concealment of income under section 28(1)(c) of the Income-tax Act, 1922 is established on the facts found, the penalty is attracted by the act of concealment itself and not by a proportionate calculation based on the amount concealed. On the facts discussed, the Tribunal found deliberate omission of cotton seed transactions, inflated purchase figures and an unexplained gunnies account, showing concealed income. The penalty was upheld because it remained within the statutory maximum, and the exclusion of one item treated as concealed did not require recomputation of the levy. The assessee's challenge therefore failed.

---

---

Issues: Whether the penalty levied under section 28(1)(c) of the Income-tax Act, 1922 was valid and justified, and whether the penalty had to be recomputed on the footing that one of the items treated as concealed income was not so concealed.

Analysis: The assessee's books showed an inflated purchase figure for kapas and an unexplained gunnies account, and the Tribunal's finding was that the cotton seeds had been deliberately omitted from account, thereby reducing the apparent cost of purchases and leaving the assessee with an undisclosed gain. The Court held that the concealment was deliberate on the facts found. It further held that, once concealment attracting section 28(1)(c) was established, the quantum of penalty did not depend on the extent of the particular item or items concealed. Following the governing principle that the statutory penalty is attracted by the act of concealment itself and not by a proportionate calculation tied to the amount concealed, the reduction or exclusion of one item would not affect a penalty that remained within the statutory maximum.

Conclusion: The penalty under section 28(1)(c) was upheld and the question was answered in the affirmative, against the assessee.

Final Conclusion: The reference was decided in favour of the Revenue on the validity of the concealment penalty, and the assessee's challenge to recomputation of the penalty failed.

Ratio Decidendi: Once concealment of income attracting section 28(1)(c) is proved, the penalty is attracted irrespective of the amount concealed, provided the levy remains within the statutory maximum.

---