Penalty for concealment fails where income classification is disputed on fully disclosed facts and no inaccurate particulars are shown.

Where all primary facts are fully disclosed and the addition arises only from a bona fide difference in interpretation or classification of income, penalty for concealment or furnishing inaccurate particulars cannot be imposed under section 271(1)(c). The assessee had produced the relevant agreements, accounts, correspondence and computations, and the dispute turned on the correct head of income rather than on any hidden receipt, fabricated document, suppression, or new incriminating material. On those facts, rejection of the assessee's legal characterisation did not establish concealment, so the penalty was rightly deleted.

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Issues: Whether penalty under section 271(1)(c) was leviable where the assessee had disclosed all material facts and the dispute concerned only the classification of receipts under different heads of income.

Analysis: The assessee had placed before the revenue all agreements, accounts, correspondence and computations on which the return was based. The addition arose not from discovery of any hidden receipt or false document, but from a change in the legal characterisation of the same material. The assessment proceedings showed divergent views on the proper head of income, and the penalty order did not rest on any new incriminating material or any finding that particulars supplied were fabricated or suppressed. In such circumstances, a mere rejection of the assessee's legal interpretation, by itself, does not establish concealment or furnishing of inaccurate particulars.

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

Final Conclusion: The appeal succeeded because the dispute was one of classification and interpretation on fully disclosed facts, not a case of concealment or false particulars.

Ratio Decidendi: Where all primary facts are fully disclosed and the addition results only from a bona fide difference in interpretation or classification of income, penalty for concealment or furnishing inaccurate particulars cannot be imposed under section 271(1)(c).

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