Uday Sinha, J.

1. The question referred to us in these references under Sec.256(1) of the Income-tax Act, 1961, is :

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the provisions of Sec.271(1)(c) read with the Explanation to the Income-tax Act, 1961, were not attracted in this case as the charge of concealment was not established by the Department notwithstanding the fact that the existence of clandestine business was admitted ?"

2. In these references, we are concerned with the assessment years 1963-64 and 1965-66. Proceedings under Sec.271(1)(c) of the Act having been initiated, the Appellate Assistant Commissioner imposed a penalty of Rs. 1,14,425 for concealment of income in the assessment year 1963-64 and Rs. 2,50,000 for the assessment year 1965-66. The Appellate Tribunal, on appeal, set aside the order of the Appellate Assistant Commissioner holding that the charge of concealment against the assessee had not been established. Hence, the present references to us at the instance of the Revenue.

3. The assessee is an unregistered firm. It derived during the assessment years income from business in iron, steel