Penalty for inaccurate particulars fails where section 14A disallowance is not supported by evidence of concealment.

Penalty under section 271(1)(c) was not attracted where the disallowance arose from interest expenditure computed under section 14A read with Rule 8D, because there was no material showing concealment of income or furnishing of inaccurate particulars. The court noted that the assessee had not suppressed income or the source of income, and the Tribunal's deletion of the penalty was not shown to be erroneous. The penalty deletion was therefore upheld in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable in respect of the disallowance made under section 14A read with Rule 8D of the Income-tax Rules, 1962.

Analysis: The penalty provision was attracted only if there was material to show concealment of income or furnishing of inaccurate particulars. The disallowance related to interest expenditure under section 14A read with Rule 8D, but there was no evidence that the assessee had suppressed income or source of income. The Tribunal's conclusion deleting the penalty was therefore not shown to be erroneous.

Conclusion: Penalty under section 271(1)(c) was not warranted and its deletion was upheld in favour of the assessee.

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