Judgement

GROVER, J. : This is an appeal by special leave from a judgment of the Calcutta High Court answering the following question which was referred to it by the Tribunal in the negative and in favour of the assessee.

"Whether on the facts and in the circumstances of the case, the Income tax authorities were justified in imposing a penalty on the assessee under Section 28 (1) (c) of the Income-tax Act?"

The assessee during the assessment year 1947-48, the corresponding previous year being the financial year ending on March 31, 1947 was a partner in the firm of M/s. Haji Sk. Md. Hussain Md. Jan of Calcutta. The Income-tax Officer while making the assessment discovered an undisclosed bank account of the assessee with the Central Bank of India Ltd., Bettiah, Bihar. It was found that a cash deposit of Rs. 87,000/- had been made by the assessee on November 21, 1946 in that Bank. He was asked to explain the source of the amount of deposit. According to his explanation all his relations got panicky during the communal riots in Bihar in the year 1946 and entrusted him with whatever cash amounts they had with them at that time for safe custody. It was stated that a sum of Rs. 87,000/- had