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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Whether there is no legal fiction under section 271(1) countenancing establishment of mens rea - Held, yes CASE REFERRED TO CIT v. Apsara Talkies [1985] 155 ITR 303/[1983] 15 Taxman 384 (Mad.) (Appex) [Para 4]. K. Subramanian for the Appellant. JUDGMENT B. Subhashan Reddy, CJ. - The order of the Income-tax Appellate Tribunal confirming the order of the Commissioner of Income-tax (Appeals) is under challenge. 2. Learned standing counsel for the Income-tax Department, Mr. K. Subramaniam, submits that there is a legal fiction introduced inExplanation 1 to section 271(1) of the Income-tax Act, 1961, that concealment, ipso facto, will attract penalty. 3. We are not able to accede to this contention for the reason that the Explanation 1 contains two sub-clauses (A) and (B) which reads as under : "Explanation 1 to section 271(1) : Where in respect of any facts material to the computation of the total income of any person under this Act,- (A)such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner, to be false, or (B)such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the…

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