GOVINDAN NAIR C.J.

Two questions have been referred to us for our opinion in relation to the proceedings for imposition of penalty on an assessee to income-tax for the year 1958-59. The questions read as follows

"1. Whether, on the facts and circumstances of the case, the provisions of section 28(1)(c) are attracted

2. Whether the order of the Tribunal sustaining the levy of penalty to the extent of Rs. 13, 500 is valid in law " *

The essential facts for disposing of this reference may be stated thus : In the assessment proceedings it was found that the income returned by the assessee did not represent its true income and, therefore, the Income-tax Officer made an estimate of the income of the assessee. The amount fixed as the income, which had not been returned by the assessee, by the Income-tax Officer, was reduced in appeal by the Appellate Assistant Commissioner and further reduced in the appeal before the Tribunal. The Tribunal fixed the amount to be added to the income returned by the assessee at Rs. 50, 000. That was the end of the assessment proceedings. But that did not end the troubles of the assessee, for, proceedings were initiated under section 28(1)(c) of the Indian Income-tax Act, 1922. For the imposition of penalty, the Income-tax Officer went into the question of concealment and came to the conclusion that there had been concealment of income on the three grounds mentioned in his order. He fixed the penalty to be imposed at Rs. 45, 900, after finding that the maximum penalty that could be imposed was Rs. 66, 817. It is not clear how this figure of Rs. 66, 817 has been arrived at as the maximum penalty imposable on the assessee. In the appeal taken by the assessee before the Appellate Assistant Commissioner, the order of the Income-tax Officer was upheld. The assessee appealed again before the Tribunal and the Tribunal, after holding that the three grounds mentioned by the Income-tax Officer and the Appellate Assistant Commissioner had been established, came to the conclusion that the penalty to be imposed was not 100% but only 30%. This has resulted in the imposition of a sum of Rs. 13, 500 as penalty on the assessee. It is in the light of these facts that the questions that have been referred to us have to be determinedWe shall, before proceeding further, extract section 28(1)(c)

"28. Penalty for concealment of income or improper distribution of profits.--(1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceedings under this Act, is satisfied, that any person--

(c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income

he or it may direct that such person shall pay by way of penalty in the case referred to in clause (a), in addition to the amount of the income-tax and super-tax, if any, payable by him a sum not exceeding one and a half times that amount, and in the cases referred, to in clauses (b) and (c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income-tax and super-tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income." *

It is not enough for the purpose of section 28(1)(c) to establish that there has been concealment or that the assessee has furnished inaccurate particulars of his income. In order that the amount of the penalty can be determined, it is also necessary to find out the income-tax and super-tax which would have been avoided if the income returned by the assessee had been accepted as the correct income. To find out the income-tax and super-tax that would have been avoided, it is necessary to find out the income that had been concealed and which had not been returned, on the basis of which it is possible to say that there have been inaccurate particulars of income. The mere estimate made, however well founded it may be, by itself would not normally constitute material for holding that the income that has been added on the basis of the estimate was the income that has been concealed. The assessment order can furnish certainly an item of evidence. But the estimate that is made on guess, however justified it may be for the purposes of assessment, would, not have been sufficient for the purpose of saying that certain amount of income had been concealed. For that, stricter proof is always insisted upon. There must be cogent evidence on the basis of which the Income-tax Officer will be able to say that certain amount of income had been concealed. This is also necessary, before any question of penalty can be determined, for, the last paragraph of that part of the section which we have read clearly indicates that one must be able to visualise how much income-tax and super-tax would have been avoided if the return submitted by the assessee, had been accepted. The Tribunal has dealt with the matter rather elaborately, discussing the reasons for coming to the conclusion that there has been concealment. After discussing three grounds, it came to the conclusion in paragraph 7 of its order at page 57 of the typed set of papers that

"thus all the three grounds on which penalty is sought to be sustained by the revenue establish concealment of income by the appellant, and the penalty provisions are clearly attracted" *

For this finding we find that there was enough material before the Tribunal and we see no reason to differ ; nor are we entitled to differ from the correctness of the finding that had been made the subject-matter of the question that has been referred to us. In the light of the above we have to answer question No. 1 referred to us in the affirmative. We must explain this affirmation by saying that what we find is that the earlier part of the section that there has been concealment of some income has been established. But that is not enough to attract the whole of section 28(1)(c) in the sense that merely on the basis of the finding that there has been concealment, penalty cannot be imposed. As we said earlier, in order to do that, it is also necessary to establish the quantum of the income that had escaped assessment, on the basis of which alone it is possible to find the income-tax and super-tax which would have been avoided had the return submitted by the assessee been accepted. There is no such finding entered by the Tribunal regarding this. Nor are we able to find any such finding entered either by the Income-tax Officer or the Appellate Assistant Commissioner. We no doubt see that certain figures have been mentioned by the Appellate Tribunal. For instance, a sum of Rs. 3, 117.72 has been mentioned, perhaps, to come to the conclusion that the said amount, which is said to have been paid by way of commission by one Periaswami, to whom a particular motor is said to have been sold, without justification and against law, has in fact been paid and the Tribunal came to the conclusion towards the end of paragraph 5 of its order that this amount of Rs. 3, 117.72 was the amount received by the assessee. Then in paragraph 6 the Tribunal refers to three specific figures : a sum of Rs. 2, 850, commission said to have been paid to one S. A. Kabir. The said Kabir appeared before the authorities and stated that he had received the amount. But the Tribunal appeared to doubt the correctness of that statement of Kabir and did not accept his evidence and did not accept the fact of the payment of this commission of Rs. 2, 850. There are two further sums of Rs. 2, 500 which are said to have been paid to two other brokers by way of commission, namely, one Thangavelu and one B. S. S. Mani. Both these persons appeared before the authorities and denied the fact of having received the amount. The Tribunal, therefore, came to the conclusion that these three amounts have been claimed by the assessee by way of expenses without justification, implying thereby that these three amounts amounted to concealment of income. But as we said there is no particular specific finding on the basis of these figures, and in the absence of a clear finding as to the amount of income-tax and super-tax that would have been avoided if the return submitted by the assessee had been accepted, it is impossible to deal with the question of the quantum of the penalty being imposed on the assessee and so we are inclined to answer question No. 2 against the revenue. But we consider, in the light of the findings entered by the Tribunal that there has been concealment, that would not be the proper course to adopt. So we decline to answer this question, because we have no clear finding on the quantum of income-tax and super-tax that would have been avoided if the return of the assessee had been accepted and we must resort to the procedure adopted by the Supreme Court in Commissioner of Income-tax v. Greaves Cotton & Co. Ltd. and Commissioner of Income-tax v. Indian Molasses Co. P. Ltd. and leave the matter for further hearing by the Tribunal. The Tribunal will rehear the matter and take into account what we have said in this judgment and enter a clear finding as to the quantum of the income which had been concealed by the assessee. Perhaps the specific figures that are to be taken are Rs. 3, 117.72, Rs. 2, 850 and Rs. 2, 500 each said to have been paid to B. S. S. Mani and Thangavelu. The Tribunal has found already that it is not 100% of the tax that should be imposed but only 30%. That percentage, of course, must stand, because no question has arisen about the percentage. After finding that certain specific amount had been concealed on the basis of the material available which had been discussed by the Tribunal, it will be open to the Tribunal after rehearing to impose penalty at 30% on the amount of tax that would have been payable on the income that has been found to be concealedWe dispose of this reference on the above terms. The assessee has won in part and the revenue in part, and so we direct the parties to bear their respective costs.