Concealment penalty under income-tax law needs proof beyond assessment alone; unexplained cash did not justify penalty here.

Penalty under section 271(1)(c) requires proof of concealment on the stricter penal standard; assessment of an amount as income does not, by itself, establish liability for penalty. The Explanation may shift the burden where returned income falls below the prescribed threshold, but it does not remove the Revenue's obligation to show that the amount was in fact the assessee's concealed income. Unexplained cash and rejection of the assessee's explanation may justify assessment, yet still fall short of the material needed for penalty. As the assessee's ownership of the money was not proved and the Revenue did no more than reject the explanation, concealment was not established and penalty was held not leviable.

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Issues: Whether penalty was leviable under section 271(1)(c) of the Income-tax Act, 1961, on the facts of the case, having regard to the Explanation and the assessment made on unexplained cash found in the assessee's possession.

Analysis: The penalty provision was treated as penal in character, so the mere fact that an amount was assessed as income did not automatically establish concealment for penalty purposes. The Explanation to section 271(1)(c) was understood as shifting the burden in cases where returned income was below the prescribed threshold, but not as dispensing with the need for the revenue to show that the amount in question was in fact the assessee's income. The Court held that unexplained possession of cash and rejection of the assessee's explanation were sufficient for assessment, but not necessarily for penalty, because the material sufficient for assessment may fall short of the stricter requirement for imposing penalty. Since the Tribunal had found that the assessee had not been proved to be the owner of the money and the revenue had done no more than reject his explanation, the essential ingredients of concealment were not established.

Conclusion: Penalty under section 271(1)(c) was not leviable and the answer to the reference was in favour of the assessee and against the department.

Ratio Decidendi: For penalty under section 271(1)(c), assessment of an amount as income is not enough by itself; the revenue must establish, on the relevant penal standard, that the amount represents the assessee's concealed income and that the statutory burden under the Explanation is not displaced.

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