The surrender of income in a revised return does not by itself prove concealment, and there must be evidence of deliberate concealment to impose a penalty under Section 271 (c) of the Income Tax Act, 1961.

( 1 ) TRIBUNAL has referred the following question of law under Section 256 (1) of the Income Tax act, 1961 (hereinafter referred to as "act") for opinion to this Court.

"whether on the facts and in the circumstances of the case the learned I. T. A. was justified in holding that the penalty Under Section 271 (c) was not leviable?"

( 2 ) THE present reference relates to the assessment year 1987-88.

( 3 ) BRIEF facts of the case are as follows:

( 4 ) ASSESSEE respondent (hereinafter referred to as "assessee") is an individual and was doing proprietory business of purchase and sale of silver ornaments in the name of Mohan Lal narendra Kumar. The original return was filed of 20. 07. 1987 disclosing the income of Rs. 36,890/- Income declared in the return was accepted under Section 143 (1) of the Act vide order dated 15. 09. 1987. Just after the filing of the return a search was conducted under Section 132 (1)of the Act at the business as well as residential premises of the assessee. During the course of search four FDRs in the name of four minor children of the assessee were found and seized from the locker of the bank, owned by the assessee. Total investment in those four FDRs were to the extent of Rs. 3,45,000/ -. In the statement recorded on 18. 08. 1998 at the time of opening of the locker. Mohan Lal Sharma stated that the FDRs in the name of four children namely, Master ravish Sharma, Manish, Vishal and Baby Namrata Sharma are kept in locker and they were all disclosed under the Income Tax /wealth Tax. During the course of the proceedings under Section 132 (12) of the Act Commissioner of Income Tax had held that there was no source of income with the minors and thus the source of FDRs were not proved and it being relatable to the assessee, directions were issued to the assessing officer to assess these FDRs in the hand of the assessee, Thereafter, assessee to buy peace fields revised return including alleged FDRs of Rs. 3,45,000/- in his income. Assessment proceedings were completed afresh according to the law thereafter, penalty of Rs. 2,50,000/- was imposed. In first appeal amount of penalty was reduced to Rs. 64,878/- being minimum penalty imposable. Assessee being aggrieved filed second appeal before the Tribunal allowed the appeal and quashed the penalty. Tribunal held as follows:

"we have heard the parties at length on the point and we take up the preliminary pleas taken by the assessee. The first plea taken up is that the F. D. Rs. were not valuable article or thing. Explanation (5) of Section 271 (1) (c) clearly provide that where in course of search under section 132, the assessee is found to be the owner of any money, bullion, jewellery, or other valuable article or thing (hereinafter in this explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising wholly and or in part in his income for any previous year which has ended before the date of the search but the return of income for such year has not been furnished before the said date, such income has not been declared therein, then not with standing such declaration such income for the purpose of imposition of penalty shall be deemed to have concealed. Thus, to attract the provisions of explanation (5) of Section 271 (1) (c) the assessee must be found in possession of any valuable article or thing. Admittedly these F. D. Rs. were not money bullion, jewellery. The Honble gujrat High Court in the case of Bhagwandas Narayan Das (supra) had held as under:

". . . Therefore, by using the words "valuable article or thing", what the legislature intended to imply is that the assets covered by these words should be such as could be covered in to cash so that the tax liability of the assessees concerned, as revealed from his undisclosed income, could be duly satisfied. In other words, the thing or article which can be retained under section 132 (5) should be one which is carrying its own intrinsic value in ter