( 1 ) THE Income-tax Appellate Tribunal, Bangalore Bench has stated a case and referred under S. 256 (2) of the Income Tax Act, 1961, hereinafter called the Act, the following question of law for the opinion of this Court: whether on the facts and circumstances of the case, the levy of penalty of Rs. 2,800 is justified? learned Counsel on both sides submit that the correct question of law should read thus : whether on the facts and circumstances of the case, the levy of penalty of Rs. 1,984 is justified in law? ( 2 ) THE reference relates to the assessment year 1964-65. The relevant accounting year ended on 30th June 1963. The assessee is a registered firm consisting of six partners carrying on business as provision merchants. It has a number of branches. The Assessee returned an income of Rs. 30,965. The assessing authority did not accept that return. He added the following additions : ( 3 ) IT is seen from a perusal of the order of the assessing authority that action under 3. 271 (1) (c) of the Act was prompted by the fact that the assessing authority had made an addition of Rs. 3,000 under the head 'jaggery' which were outside the books of account. It is also relevant to state that the assessing authority has stated that action under S. 271 (1) (c) is also initiated in view of the fact that the returned income is less than 80 per cent of the assessed income. The Inspecting Assistant Commissioner who made the order of penalty has merely referred to the discussion in the order of the Income-Tax Officer and he has not adduced any additional grounds for coming to the conclusion that penalty was called for. He has stated that ' the Income Tax Officer has discussed in detail as to why he is forced to make the above mentioned additions and he is also satisfied that the Assessee not only concealed a part of its income from jaggery business but also comes under the mischief of explanation to S. 271 (1) (c) in. its true sense. As already stated, the Tribunal has not applied its mind at all to the question in issue. A case of concealment of part of income of the Assessee relating to jaggery business has no foundation since the appeal on merits has succeeded. its true sense. As already stated, the Tribunal has not applied its mind at all to the question in issue. A case of concealment of part of income of the Assessee relating to jaggery business has no foundation since the appeal on merits has succeeded. Then the order has to rest entirely on the ground that the returned income is less than 80 per cent of the income determined. But that was not a ground on which the Income-Tax Appellate Tribunal has sustained the order. In the absence of any case of concealment of income relating to jaggery business, one cannot conjecture as to what view the Inspecting Assistant Commissioner or the Appellate Tribunal would have taken in the matter. ( 4 ) IT has been laid down by the Supreme Court in Commr. of J. T. , madras v. Khoday Eswarsa and Sons 83 ITR. 369. that penalty proceedings being penal in character the department must establish that the receipt of the amount in dispute constitutes income of the Assessee; that apart from the falsity of the explanation given by the Assessee, the department must have before it before levying penalty cogent material or evidence from which it could be inferred that the Assessee has consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. In the instant case, none of the authorities have stated that the Assessee has consciously concealed the particulars of its income. Sri S. R. Rajasekhara murthy, learned Counsel for the Revenue made a submission that we should remit the matter to the Tribunal to apply its mind afresh to find out as to whether penalty is arbitrary. We are not inclined to accede to that contention. As already stated the Tribunal has entirely rested its decision on the alleged concession made by the Assessee's authorised representative. No penalty can be imposed merely on the concession of an assesses or his representative unless the facts justify or warrant the levy of penalty. ( 5 ) IN the result, for the reasons stated above, we answer the question referred in the negative and against the Department. The Assessee is entitled to its costs. Advocate's fee Rs. 250. --- *** --- .