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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1990-91 There was concealment of income by assessee by virtue of operation of Explanation 5 to section 271(1)(c) where assessee not only did not disclose income in course of search, but even offered explanation that it belonged to another person which assessee could not establish or prove [In favour of revenue] A search was conducted in the assessee's premises on 14-2-1990, and during search cash of Rs. 5,75,000 was seized by the Department. In the course of search the assessee gave a statement declaring that the amount belonged to one M.G. However, later the assessee failed to establish his case that the amount belonged to the said person. The Assessing Officer also held that there was concealment of income by virtue of operation of Explanation 5 to section 271(1)(c). Held that, in fact the return was due on 30-6-1990, and search having been made on 14-2-1990, the assessee had enough opportunity to file the return and remit the tax on the income so declared. Besides this, the assessee in the course of search could have saved penalty by accounting the income at least on the date of search and then paid tax by declaring it. Even after search and seizure of cash by the Department, the assessee proceeded to contend that the amount belonged to another person, but failed to prove the same. There was concealment of income by the assessee by virtue of operation of Explanation 5 to section 271(1)(c) as the assessee not only did not disclose income in the course of search, but even offered explanation that it belonged to another person which the assessee could not establish or prove. Thus, the levy of penalty was to be upheld. CASES REFERRED TO T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC) and Dilip N. Shroff v. Joint CIT [2007] 291 ITR 519(SC). P. K. R. Menon and George K. George for the Applicant P. Balachandran and Smt. Preetha S. Nair for the Respondent JUDGMENT C.N. Ramachandran Nair, J.- This is a reference at the instance of the Revenue against the order of the Income-tax Appellate Tribunal cancelling penalty levied on the assessee under section 271(1) (c) of the…

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