Omission or negligence on the part of an assessee to disclose proper particulars of his income-tax returns would not necessarily constitute a deliberate act of suppression to invite punitive action from tax officials, the Supreme Court has ruled.

Concealment of income and furnishing of inaccurate particulars carry different connotations. Concealment refers to deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of suppression or false declaration, the apex court said.

The order imposing penalty is quasicriminal in nature and thus, the burden lies on the department to establish that the assessee had concealed his income, a Bench of Justices S B Sinha and Markandeya Katju said while upholding an appeal filed by an assessee. Appellant T Ashok Pai, an engineer had challenged a judgment of the Karnataka high court, which rejected his plea that the alleged false assessment was prepared by the Syndicate Bank, his banker to whom he had given the general power of attorney.

The high court had upheld the argument of tax officials that if the explanation of Pai was to be accepted, every tax evader could take shelter by shifting the blame on his/her clerk or accountants.

However, the SC held that if an explanation given by the assessee with regard to the mistake committed by him has been treated to be bona fide and it has been found that he had acted on the basis of wrong legal advice, the question of imposing a penalty does not arise.