Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 [Corresponding to section 28(1)(c) of the Indian Income-tax Act, 1922] - Penalty - For concealment of income - Assessment year 1957-58 - For relevant year, assessee-firm filed a return declaring an income of Rs. 8,249 from its business - ITO not being satisfied with said return, pointed out that he had information regarding various other internal and external transactions - Assessee after discussion with ITO agreed to assessment on a total income of Rs. 60,000 - ITO also initiated penalty proceedings only on ground that assessee had admitted for a higher assessment than its returned income - Whether in absence of any other evidence, it could not be said that burden placed on revenue in penalty proceedings to establish deliberate concealment on part of assessee had been completely discharged - Held, yes - Whether therefore, penalty imposed on assessee was to be deleted - Held, yes FACTS The assessee-firm was carrying on business in mica mining. For the assessment year 1957-58, it filed a return declaring an income of Rs. 8,249 from the mining section. The ITO not being satisfied with the said return pointed out that he had information regarding various other internal and external transactions. The assessee, after discussion with the ITO, agreed to the assessment on a total income of Rs. 60,000 from mica mining. The ITO further conducted some subsequent enquiries and thought that even the assessment on the basis of Rs. 60,000 would not be correct. He, therefore, ultimately completed the assessment on an income of Rs. 1,00,000. In addition, he initiated penalty proceedings under section 28(1)(c) of the 1922 Act on the ground that the income had been concealed. On appeal, the AAC reduced the total income to Rs. 60,000. On further appeal, the Tribunal confirmed said order. The ITO, levied penalty of Rs. 14,000. The AAC, however, set aside said order. On further appeal, Tribunal confirmed the order of the AAC by holding that the agreement on the part of the assessee to be assessed on a total income of Rs. 60,000, despite his return for a lower amount, was not conclusive for the purpose of penalty proceedings. On…

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