Penalty for inaccurate particulars can survive revised disclosure made only after confrontation with incriminating material.

Penalty under section 271(1)(c) is attracted where an assessee files a revised return only after being confronted with material indicating undisclosed expenditure or inaccurate particulars. The note states that a claim of voluntary surrender to buy peace does not, by itself, negate concealment or furnishing of inaccurate particulars. It also records that the assessee's explanation was not acceptable, and that the absence of independent support from seized papers did not prevent reliance on the assessee's own conduct and revised disclosure. A consistency argument based on another assessment year was rejected, and the penalty deletion by the Tribunal was described as incorrect.

---

---

Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessee filed a revised return offering additional income after summons and material from a search in a third party's premises, and whether the Tribunal was justified in deleting the penalty.

Analysis: The revised return and accompanying correspondence showed that the assessee offered the additional amount after being confronted with material indicating the payment, and the original return had already omitted the relevant expenditure. The Court held that penalty proceedings are attracted where inaccurate particulars are furnished or concealment is established, and that the plea of voluntary surrender to buy peace does not by itself displace liability under section 271(1)(c). The assessee's explanation was found not acceptable, and the absence of independent evidence from the seized papers did not negate the inference of furnishing inaccurate particulars from the assessee's own conduct and revised disclosure. The argument based on consistency for another assessment year was also rejected.

Conclusion: Penalty under section 271(1)(c) was rightly leviable and the deletion of penalty by the Tribunal was incorrect.

---