Penalty under Section 271(1)(c) fails when the quantum addition no longer survives and no independent concealment basis exists.

Penalty under Section 271(1)(c) could not be sustained where the quantum addition had already been decided in favour of the assessee. The Court noted that once the underlying addition relating to capital gains from a development arrangement no longer survived, the foundation for alleging concealment of income or furnishing inaccurate particulars also disappeared. In the absence of any independent basis apart from the deleted quantum addition, the revenue could not justify the penalty. The appeal was dismissed and the penalty was treated as not exigible.

---

---

Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was leviable when the quantum addition had already been decided in favour of the assessee.

Analysis: The appeals arose from penalty proceedings under Section 271(1)(c) following the dispute on taxability of capital gains arising from the development arrangement. The quantum issue had already been decided in favour of the assessee, and the Court held that once the underlying addition no longer survived, the foundation for imposing penalty for concealment or furnishing inaccurate particulars also disappeared. The revenue was unable to show any independent basis to sustain the penalty apart from the quantum addition.

Conclusion: The penalty was not exigible and the appeal was dismissed, in favour of the assessee.

Ratio Decidendi: Where the quantum addition giving rise to penalty under Section 271(1)(c) does not survive, penalty for concealment of income or furnishing inaccurate particulars cannot be sustained independently.

---