Voluntary disclosure of bona fide accounting errors defeats concealment penalty where revised returns are filed before detection.

Voluntary disclosure of bona fide accounting mistakes and prompt filing of revised returns before departmental detection meant the income addition stemmed from error, not concealment of particulars. On those facts, concealment penalty under section 271(1)(c) was not attracted, and the Tribunal's deletion of penalty was supported by the record. Because the findings turned on the assessee's self-disclosure and absence of independent discovery by the authorities, no referable question of law arose under section 256(2).

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Issues: Whether the cancellation of penalty under section 271(1)(c) of the Income-tax Act, 1961 was justified on the facts, and whether any referable question of law arose under section 256(2) of the Income-tax Act, 1961.

Analysis: The assessee had itself brought the totalling mistakes in the books of account to the notice of the authorities and had filed revised returns immediately thereafter. The authorities had not independently discovered the mistakes before the disclosure. On these facts, the addition to income was attributable to bona fide accounting errors rather than concealment of particulars of income. The Tribunal's view that the penalty was not warranted was supported by the record, and the order did not give rise to a referable question of law.

Conclusion: The deletion of penalty was upheld and the Revenue's request for reference was rejected.

Ratio Decidendi: Where an assessee voluntarily discloses bona fide accounting mistakes and files revised returns before detection by the department, concealment penalty is not attracted and no referable question of law arises from the Tribunal's deletion of penalty.

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