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 1944-45 - Whether concealment penalised under section 28 of 1922 Act must be concealment of which assessee is conscious and it must be concealment from assessing authority - Held, yes - Whether where person who represented assessee - HUF had no guilty knowledge at time of filing return, assessee - HUF could not be guilty of concealment as to attract mischief of section 28(1)(c) of 1922 Act - Held, yes FACTS The assessee was a HUF and 'SC' was its karta. After his death, before the end of the accounting year, his wife 'RA' furnished the return, in response to notice under section 22(2) based on the account maintained by her husband. The return was accepted and assessment was also completed. Subsequently, the ITO came to know that some of the entries in the accounts were fictitious and some deposits in bank were not shown in accounts. Notice under section 34 was issued, assessment was revised making some additions and penalty levied for concealment of income. This was confirmed by the Tribunal. On reference: HELD The concealment penalised under section 28 must be concealment of which the assessee is conscious. Further it must be a concealment from the assessing authority, for example, the ITO. Was such a concealment established in this case was the question. The assessee was no doubt a HUF despite the death of 'SC'. The finding of the AAC was, in effect, that neither when 'RA', representing the assessee, submitted a return on 11-12-1944, nor when she submitted a return on 15-3-1949, was she conscious that there had been any concealment of income. There was no finding and there was no material for such a finding that she deliberately furnished inaccurate particulars of the income of the assessee. She was not conscious of any concealment, was virtually the specific finding. The further finding was that 'SC' was guilty of concealment of portions of his income. What, however, the Departmental Authorities and the Tribunal apparently overlooked was that it was not any concealment that was enough to…

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