Surrender of income alone does not prove concealment; penalty under the income-tax law was held unsustainable.

A surrender of additional income during assessment proceedings does not, by itself, establish concealment or furnishing of inaccurate particulars for penalty purposes. Where the surrender was made to buy peace and avoid further litigation, and the surrounding facts did not justify a concealment penalty, section 271(1)(c) penalty was not sustainable. The cancellation of the penalty by the first appellate authority was therefore upheld.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable on the basis of the assessee's surrender of additional income during assessment proceedings.

Analysis: The addition arose from discrepancies in stock and purchases, but the record showed that the assessee surrendered income to buy peace and avoid further litigation. A surrender of income, by itself, does not automatically establish concealment or furnishing of inaccurate particulars. On the facts found, the explanation did not justify a concealment penalty, and the cancellation of penalty by the first appellate authority was held to be proper.

Conclusion: Penalty under section 271(1)(c) was not sustainable and its cancellation was upheld.

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