Law:

Section:

Section 271(1)(c) , read with Explanation thereto, of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1969-70 - Assessee disclosed an amount in Part IV of his return as prize money from cross-word puzzle and claimed exemption - ITO did not accept genuineness of prize money received and initiated penalty proceedings under section 271(1)(c) - Difference between returned income and assessed income was more than 20 per cent -Whether presumption of concealment or wilful furnishing of inaccurate particulars was rebutted - Held, no - Whether assessee was liable to be penalised under section 271(1)(c), Explanation - Held, yes FACTS For the assessment year 1969-70, the assessee-respondent filed a return of income. In Part IV of the return an amount was shown to have been received from cross-word puzzle competition as prize money. The ITO did not accept the genuineness of the prize money received and added the same to the income of the assessee. The ITO initiated penalty proceedings under section 271(1)(c). On appeal, the Tribunal held that levy of penalty for concealment of income or furnishing inaccurate particulars of income was not Justified as disclosure in Part IV of the return was sufficient disclosure and deleted the penalty. On reference : HELD The authorities had come to the conclusion that the assessee's version that he secured a prize in the cross-word competition was palpably false. In view of the fact that the assessee had shown the amount in Part IV of his return, there was a clear admission that he had earned the income shown therein in the year under consideration. The assessee could not claim immunity from penalty by falsely indicating in Part IV of the return that he had earned income of a casual nature. Since the assessee admitted the fact that he had earned income during the assessment year 1969-70 by showing the same in Part IV of the return, the authorities below were justified in bringing the same to tax as income derived from an undisclosed source. Under the Explanation to section 271(1)(c) (as it then stood), once it was established that the difference between the returned income and the assessed income was more…

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