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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1973-74 - Whether where assessee failed to explain discrepancies in his stocks and Tribunal in penalty proceedings, by appreciating material on record afresh, found that there was conscious concealment of income by assessee, levy of penalty under section 271(1)(c) was valid - Held, yes FACTS The assessee carried on the business of 'adat'. For the assessment year in question, while framing the assessment, the ITO found on the basis of actual inspection of stocks by the Food Department that there was discrepancy in the actual stock of wheat and rice and the stock disclosed by the books of account of the assessee. The ITO, therefore, made additions in both the accounts. A penalty was also imposed under section 271(1)(c) as the assessee was unable to explain the discrepancies in stocks. The AAC held that in respect of rice account, the assessee could not be held to have concealed particulars of his income and accordingly the amount of penalty was reduced. The Tribunal affirmed the order of the AAC. On reference: HELD In the instant case, the Tribunal appreciated the material on record afresh in the penalty proceedings and found that it was proved that there was unexplained excess of wheat stock, as found by the Food Department. The Tribunal further found that in the absence of any plausible explanation by the assessee, there was conscious concealment of income by the assessee. The Tribunal thus arrived at its findings in the penalty proceedings independently of its findings in the assessment proceedings. In these circumstances, the Tribunal was justified in upholding the levy of penalty. Note: The decision is in favour of revenue. CASE REFERRED TO Anantharam Veerasinghaiah & Co. v. CIT [1980] 123 ITR 457 (SC). J.W. Mahajan for the Applicant. R.C. Mukati for the Respondent. JUDGMENT Sohani, J.-By this reference under s. 256(1) of the I.T. Act, 1961, hereinafter referred to as "the Act" , the Income-tax Appellate Tribunal, Indore Beneh, has referred the following questions of law to this court for its opinion: "(1)Whether, on the facts and in the circumstances of…

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