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Explanation to section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - In relevant year ITO found certain cash credit in assessee's books and treated it unexplained - Tribunal also upheld view taken by ITO and, therefore, penalty was imposed on assessee under section 271(1)(c) - On appeal, AAC cancelled penalty on ground that concealment charge was not proved - Revenue contended before Tribunal that Explanation to section 271(1)(c) was attracted as assessed income exceeded returned income by over 20 per cent - Whether Tribunal was justified in holding that as Explanation to section 271(1)(c) was not taken support of by ITO in imposing penalty and was not pleaded before AAC, it could not be contended before it - Held, no Facts While examining the account books for the relevant year, the ITO noticed a certain cash credit in the name of one G. The assessee explained that he had taken a loan from G for purchase of a shop. G confirmed the advance on an enquiry by the ITO but it was stated by K, the father of G, that he had no knowledge of the advance given by his son. The ITO, therefore, treated the said cash credit as 'unexplained'. On appeal, the Tribunal also upheld the view taken by the ITO, Consequently, penalty was imposed by the ITO under section 271(1)(c). On appeal, the AAC cancelled the penalty on the ground that from the statement of K, who had not been allowed to be cross-examined by the assessee, the concealment charge could not be inferred to have been proved. It was contended by the revenue before the Tribunal that theExplanation to section 271(1)(c) was attracted as the assessed income exceeded the returned income by over 20 per cent and the assessee had no evidence that such assessment did not result from any fraud or gross or wilful neglect on his part. The Tribunal held that since the ITO had not taken any support from the Explanation to the said section for levying the penalty and the Explanation had not been pressed into service before the AAC, no contention on the basis of the said provision could be entertained before it. On reference: Held The language of the Explanation to section 271(1)(c) indicates that where…

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