Judgment :- VENKATADRI J. This is an income-tax reference on a direction by this court under section 66(2) of the Income-tax Act and the question we are called upon to consider is "Whether on the facts and in the circumstances of the case the levy of penalty under section 28(1)(c) of the Income-tax Act was justified and whether there was material on record to support the finding that there was deliberate concealment of the assessee's income in the two years in question ?" * The facts giving rise to this reference may be stated as follows : The assessee is a public limited company dealing in rubber, tea and radios. For the years 1944-45 and 1945-46 they were assessed on the declared income of Rs. 26, 259 and Rs. 33, 251 respectively. The Second Additional Income-tax Officer, Calicut, by his letter dated February 27, 1951, informed the Inspecting Assistant Commissioner of Income-tax, Western Range, Coimbatore, that the assessee derived income from the Vellarmalai Plantations Ltd., Calicut, for the period September 13, 1942, to April 21, 1944. On the basis of this information, the Income-tax Officer issued section 34 notice to the assessee for the years 1944-45 and 1945-46. The assessee returned the same figures. The Income-tax Officer came to the conclusion that the assessee-company did not disclose the income from the Vellarmalai Plantations Ltd., which was determined at Rs. 13, 500 and added it to the income originally assessed. Subsequently, action under section 28(1)(c) was taken for concealment of income. The Income-tax Officer was of the opinion that the assessee failed to disclose the income in its return and levied a penalty of Rs. 9, 000 for each of the assessment years. The assessee preferred an appeal, but was unsuccessful. The matter was carried further to the Tribunal and the Tribunal also came to the conclusion that the assessee concealed particulars of its income in its return for both the years and thereby brought itself within the mischief of section 28(1)(c). The Tribunal confirmed the penalty imposed. The attempt of the assessee to cause a reference to be made under section 66(1) of the Act failed. The Tribunal confirmed the penalty imposed. The attempt of the assessee to cause a reference to be made under section 66(1) of the Act failed. Then the assessee filed an application under section 66(2) and this court directed the Tribunal to refer the question as stated aboveWhile directing the Tribunal to state a case, this court observed "What exactly was the scope of the information the Income-tax Officer sought at that stage is not clear from the material placed before us ... The Tribunal will give an opportunity to the assessee to disclose by an affidavit what was the scope of the further information that was called for by the Income-tax Officer in response to which the letter dated December 3, 1944, was addressed by the assessee-company to the Income-tax Officer and that aspect of it will also be taken into account in preparing the statement of the case to be submitted to this court." * Now it is necessary for us to state briefly the circumstances under which the penalty was levied on the assessee-company for the years 1944-45 and 1945-46. As stated already, the assessee is a public limited company dealing in rubber, tea and radios. A. V. Thomas is the managing director of the assessee-company. One M. C. Chandy entered into a contract with Parry & Co. Ltd. to purchase Vellarmalai Estate. M. C. Chandy had an option to assign to his nominee his right to purchase. It was at this stage that A. V. Thomas, the managing director of the assessee-company, negotiated with M. C. Chandy for an assignment of the latter's right to purchase Vellarmalai Estate. This Vellarmalai Estate was not intended to be purchased for and on behalf of Messrs. A. V. Thomas & Co. (India) Ltd., but to float a separate company called "The Vellarmalai Plantations Ltd." As the formation of the new company would take time, the assessee-company paid the consideration therefor and obtained possession of the estate on September 13, 1942. The sale deed was taken on November 22, 1944. During this period the assessee-company was dealing with the estate for and on behalf of the Vellarmalai Plantations Ltd. to be formed. The sale deed was taken on November 22, 1944. During this period the assessee-company was dealing with the estate for and on behalf of the Vellarmalai Plantations Ltd. to be formed. While the assessee was dealing with this estate, all the receipts and expenses were recorded in the assessee's books of account in a separate folio styled "Vellarmalai Estate." This account is for the period October 1, 1942, to April 21, 1944. At no time did the company draw up the accounts and ascertain the results of the estate ; nor were the results taken into the profit and loss account of the company. Even assuming that there were profits in the Vellarmalai Estate, it was neither available to the assessee nor distributed to the shareholders of the assessee-company. Even at the time of the original assessment, the assessee-company sent a letter on December 8, 1944, giving details regarding (1) schedule for other finance ; (2) investments; and (3) reconciliation for furniture account appearing in the balance-sheet as at June 30, 1943. In the schedule detailed by the assessee-company under annexure "B-2," at the time of the assessment proceedings, it disclosed the following figures to the Income-tax Officer : Vellarmalai lorry upkeep account---Rs. 1, 655-3-10 and Vellarmalai capital account Rs. 41, 196-12-0. The Income-tax Officer evidently did not probe into this matter in greater detail in regard to the character of the entry "Vellarmalai capital account", though he called upon the assessee to explain various other matters such as investment account, latex case, profit on sale of investments and other miscellaneous income and the details for the loss in crude oil accountWhen the income-tax department started proceedings under section 28, the assessee sent a letter dated April 15, 1952, complaining that the officer was aware that all the receipts and expenses of Vellarmalai Plantations Ltd. were treated as distinct from its own receipts and expenses and the balance was transferred to the new company after its formation. The assessee-company made it very clear to the Income-tax Officer by placing all the materials before him that it did not treat the estate as its own but it only financed on behalf of the company to be formed. Nevertheless, the Income-tax Officer treated the receipts as the income of the assessee-company and added it to the original return. The addition of this amount to the return submitted is not disputed. Nevertheless, the Income-tax Officer treated the receipts as the income of the assessee-company and added it to the original return. The addition of this amount to the return submitted is not disputed. But what the assessee-company complains is that it was never the intention of the assessee to conceal any particulars. It had brought all the receipts and expenses relating to the estate into its accounts and all the particulars called for by the department, both during the original assessment proceedings and after issuing notice under section 34, have been duly furnished. Therefore, there is no justification for the Income-tax Officer taking proceedings under section 28 In pursuance of the directions given by this court at the time of passing the order under section 66(2), an affidavit was filed by the manager of the assessee-company to the effect that the Income-tax Officer accepted the return of the income and there was an elaborate enquiry. The existence of Vellarmalai Estate was clearly disclosed to the Income-tax Officer. The company bona fide believed that the income from the estate was held for the benefit of the company to be formed. All receipts and expenses relating to the Vellarmalai Estate had been entered in the books of account and this account was included under "other finances" in the balance-sheet, as is evident from the schedule. The Income-tax Officer also filed an affidavit to the following effect. It is true that the assessee, at the time of the original assessment proceedings, placed the balance-sheet and also the schedule to the balance-sheet exhibiting Vellarmalai lorry upkeep account and capital account also the other particulars called for by the Income-tax Officer at the time and of the assessment. Beyond that he did not state anything. Now it is on these facts that we have to consider whether the assessee has "concealed the particulars of its income or deliberately furnished inaccurate particulars of such income "(section 28(2) of the Income-tax Act)The word" conceal" * implies something more than mere failure to disclose and it pertains to an affirmative action likely to prevent or intended to prevent knowledge of a fact and refers to some advantage to the concealing party or disadvantage to some interested party from whom the fact is withheld. Webster in his Dictionary gives the meaning for the word "conceal" as "to hide, withdraw from observation or to cover to keep from sight." Secrecy is an essential ingredient of the act of concealment. To constitute "concealment", it must appear that the statement or act of the person was calculated and designed to prevent discovery of the act with which he is charged. His act must be misleading, false or deceptive. There is an element of mens rea in the matter of furnishing particulars. When interpreting the statutory offence, it is very difficult to produce adequate proof of guilty knowledge ; that is the doctrine of mens rea. All that it involves is the principle that the act must be attributable to the person, that is, it must have been done intentionally and not accidentally. To involve persons in statutory offences, it must be in the form of wilfully, knowingly, permitting, suffering, allowing or causing The assessee, at the time of its original assessment and again at the time of section 34 proceedings, took pains to explain, clarify and clear the doubt regarding the character of the revenue receipt to the revenue authorities and said that the entry under the heading "Vellarmalai Estate" did not concern with the dealings of the assessee-company and that it related to the Vellarmalai Plantations Ltd. to be formed. As a matter of fact, this amount was transferred to the new company after its formation. The profit and loss of the Vellarmalai Estate were not at all taken into consideration while preparing the balance-sheet of the assessee-company. But the income-tax authorities, except adding the amount to the original return, did not attempt to make any enquiry or call for the details about the disputed entry regarding the Vellarmalai Estate. The revenue authorities refrained from making further enquiries in regard to this entry. When the Income-tax Officer was careful enough to call for particulars, at the time of assessment, in regard to latex, secretarial fee, payment to the supply department, motor-car and vehicles account, etc., he did not call for any explanation regarding this estate ; probably he neither suspected nor doubted the character of the entry. When the Income-tax Officer was careful enough to call for particulars, at the time of assessment, in regard to latex, secretarial fee, payment to the supply department, motor-car and vehicles account, etc., he did not call for any explanation regarding this estate ; probably he neither suspected nor doubted the character of the entry. Again, at the time of section 28 proceedings, the assessee explained that it was not the intention of the assessee to treat the receipts and expenses of the Vellarmalai Estate as part of its dealing in the books of the company ; on the other hand, it was treated as distinct and separate from its own receipts. There is no reasonable explanation by the revenue authorities for not accepting this explanation. The uncontroverted facts are that at the time of the entry in the accounts, the company was in the formation stage and that the capital account of Vellarmalai Estate was transferred to the new company after its formation. The assessee might have made this entry under the bona fide belief that it was managing the estate for and on behalf of a new company to be formed. It cannot be said that the assessee made this entry with the conscious and deliberate intention of suppressing the income from the estate. Nor can it be said that the entry was made with a deceptive intention to mislead the revenue. At the time of the original assessment the assessee placed before the assessing authorities all the available materials in connection with the estate. The Appellate Assistant Commissioner says: "Though the appellant was conscious of the receipts being of a revenue nature from the estate and of the fact that the receipts were earned by him, he did not declare that income either in his own return or submit a separate return making his position clear." * No man can prove the state of another man's mind. George Spencer Bower in his Law of Actionable Misrepresentation, at page 33, observed as follows "The state of a man's mind, according to Bowen L. J. in Edington v. Fitzmaurice is as much a fact as the state of his digestion. It is true that it is very difficult to prove what the state of a man's mind at a particular time is, but, if it can be substantiated, it is as much a fact as anything else. It is true that it is very difficult to prove what the state of a man's mind at a particular time is, but, if it can be substantiated, it is as much a fact as anything else. A mis-statement of the state of a man's mind is a misrepresentation of fact." Again the same noble Lord in Angus v. Clifford expresses " A man may tell a lie about the state of his own mind, just as much as he can tell a lie about the state of the weather, or the state of his own digestion, 'though' the inquiry may be a difficult and complicated one." * In Commissioner of Income-tax v. Gokuldas Harivallabhdas it was held that the proceedings for the levy of penalty under the Income-tax Act were in the nature of criminal proceedings. But, subsequently, the Supreme Court in C. A. Abraham v. Income-tax Officer, Kottayam held that penalty was no more than an additional tax. The application of this principle has been extended by a recent decision of the Allahabad High Court in Lalchand Gopal Das v. Commissioner of Income-tax to cases of imposition of penalty for concealment of income. The decision laid down the following principles (1) There is no essential difference between a tax and a penalty. Additional tax imposed on an assessee for his contumacious conduct is designated as penalty (2) A penalty is not a criminal proceeding. In England and the United States, actions for penalties are civil actions, recoverable in a civil court. The normal rules as to pleadings in civil actions apply, and the taxpayer is required to furnish the particulars (3) The finding in the assessment proceeding is not res judicata or conclusive in the penalty proceedings. Fresh evidence may be given by the assessee in the penalty proceedings, and the income-tax authorities cannot refuse to consider it(4) The onus of proof of non-concealment lies on the assessee. There can be no question of the income-tax authorities leading evidence to prove concealment. What is required under the law is that the income-tax authorities should have materials to justify their conclusion of concealment Applying the above principles to the instant case, we feel that the assessee not only placed all the available materials before the income-tax authorities but the revenue refrained either from probing further into the details of this disputed entry or making further enquiry about the same. The revenue cannot merely say that the assessee was conscious of the receipts being of a revenue nature from the estate. It is not stated that the explanation offered by the assessee either at the time of the original proceedings or at the stage of section 28 proceedings was false or that the authorities were not satisfied with the same. As observed in Khemraj Chagganlal v. Commissioner of Income-tax, it is one thing to say that the explanation of the assessee with regard to the source and nature of the amount was not satisfactory ; it is another thing to say that the assessee is guilty of wilful suppression of the particulars of his income in the income-tax proceedings. Having perused the orders of the Appellate Tribunal, of the Assistant Commissioner and of the Income-tax Officer in this case, we are satisfied that the assessee has furnished a plausible explanation of the source and nature of the credit entry. At this stage the following passage of Warrington L.J. in In re City Equitable Fire Insurance Co. Ltd. may usefully be referred ". . . unless he knows that he is committing, and intends to commit, a breach of his duty, or is recklessly careless in the sense of not caring whether his act or omission is or is not a breach of duty." * We feel that these observations apply to the instant case, as the Income-tax Officer says that the appellant was conscious of the receipts being of a revenue nature from the estate, and the Appellate Tribunal observes "the manner in which the account has been exhibited in the balance-sheets and in the schedules cannot give a true picture of the transaction." * The revenue must have assigned reasons for their conclusion that the balance-sheet is not a true picture of the transaction and there must be sufficient material for the conclusion that the assessee concealed its income. It is true that the onus of proof of non-concealment is on the assessee. But, after the assessee discharged that burden, the principle is, as stated by the House of Lords in Fattorini (Thomas) (Lancashire) Ltd. v. Inland Revenue Commissioners, that the onus in such a proceeding was not of an ambulatory or shifting character but the onus was finally upon the Crown to prove its right to impose what was a severe penalty. But, after the assessee discharged that burden, the principle is, as stated by the House of Lords in Fattorini (Thomas) (Lancashire) Ltd. v. Inland Revenue Commissioners, that the onus in such a proceeding was not of an ambulatory or shifting character but the onus was finally upon the Crown to prove its right to impose what was a severe penalty. At page 249 of Mens Rea in Statutory Offences by J. LL. J. Edwards, the learned author observes "Where all that is meant is that the accused's conduct must be a voluntary expression of his will, this is a basic principle which runs throughout the whole field of criminal liability, whether the crime originated at common law or by statutory enactment, and whether the crime is one of absolute prohibition or one involving proof of a guilty mind. All that it involves is the principle that the act must be attributable to the accused, i.e., it must have been done intentionally and not accidentally." * We are of the opinion that the entry made by the assessee in its books of account under the heading "Vellarmalai capital account" might have been made under the bona fide belief that as they were maintaining the estate for the time being, that is, till the formation of the new company, there was nothing wrong in making such an entry in their books of account. Further, the conduct of the assessee in transferring whatever amount that stood in its books to the newly formed company shows beyond doubt that the entry was made neither wilfully nor intentionally, but only accidentally. The reference is answered against the department and in favour of the assessee. Counsel's fee Rs. 250Question answered in favour of the assessee.