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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For Concealment of Income Non-filing of return by a previously assessed assessee does not amount to concealment, as Explanation 3 to section 271(1)(c) rules out such a case [Assessment year 1984-85] [In favour of assessee] CIT v. U.P. State Handloom Corpn. [2009] 310 ITR 54 (All.) The assessee was assessed the tax for several assessment years before the assessment year 1984-85. The Commissioner (Appeals) held that Explanation 3 below section 271(1)(c) did not apply to the present case. It applied only to a person, who had not previously been assessed. He also held that mere failure to file a return of income does not amount to concealment of income of particulars of income. Concealment is an act of commission, whereas failure to file a return is an act of omission. The two are not the same. The Tribunal upheld his order. Held that no referable question of law arose from the Tribunal's order. JUDGMENT 1. We have heard both sides. 2. The following questions are being sought to be called as a reference by way of this application. "1. Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was legally justified in dismissing the Departmental appeal and confirming the order of the Commissioner of Income-tax (Appeals) cancelling the penalty under section 271(1)(c) of Rs. 23,65,000 even when the assessee was new one and it has not made compliance to fulfil the legal obligation by furnishing the return of income under section 139(1) of the Income-tax Act, 1961, and also it has deliberately did not comply with the notice issued under section 139(2) to file the return of income ? 2. Whether, on the facts and in the circumstances of the case, if any Explanation to section 271(1)(c) has not been invoked and concealment penalty has been imposed on substantive provisions of the section, penalty so imposed will be legally sustainable ?" 3. The Tribunal has held as follows in paragraph 5 of the order dated December 18, 1996. "We have heard the rival…

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