Penalty for concealment requires proof of inaccurate particulars or unrebuffed Explanation 1 presumption, not mere rejection in quantum proceedings.

Penalty under section 271(1)(c) applies only where the Revenue establishes concealment of income or furnishing of inaccurate particulars, or where the assessee fails to rebut the deeming presumption in Explanation 1 with a bona fide, substantiated explanation and full disclosure of material facts. The assessment and penalty proceedings are distinct, and mere rejection of the explanation in quantum proceedings does not by itself prove concealment. On the stated facts, the assessee had disclosed the relevant particulars and the explanation was not found false, so the penalty was cancelled.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act was leviable on the assessee for the additions sustained in assessment.

Analysis: Penalty under section 271(1)(c) is attracted only where there is concealment of particulars of income or furnishing of inaccurate particulars. Explanation 1 creates a deeming fiction where the assessee fails to offer an explanation, offers a false explanation, or fails to substantiate a bona fide explanation with disclosure of all material facts. The assessment and penalty proceedings are distinct, but the presumption under the Explanation can be rebutted by a credible and bona fide explanation supported by the material on record. Mere rejection of the assessee's explanation in quantum proceedings does not by itself establish concealment or inaccurate particulars. On the facts, the assessee had disclosed the relevant particulars and its explanation was not found to be false.

Conclusion: Penalty under section 271(1)(c) was not leviable and was cancelled.

Ratio Decidendi: Penalty for concealment or inaccurate particulars cannot be sustained unless the Revenue establishes the statutory conditions or the assessee fails to rebut the deeming presumption under Explanation 1 by a bona fide and substantiated explanation with full disclosure of material facts.

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