Bona fide tax claim mistake defeats penalty; no substantial question of law arises on concurrent factual findings.

A bona fide, uncontroverted mistake in claiming deduction under Section 80HHB did not justify penalty under Section 271(1)(c) because the assessee had disclosed the relevant particulars and there was no proof of false particulars or deliberate concealment. A mere unsustainable claim, without more, was insufficient to amount to furnishing inaccurate particulars, so deletion of penalty was upheld. On the Section 260A appeal, the court held that the proposed issues turned on settled principles and concurrent factual findings, with no perversity or debatable legal question shown. No substantial question of law arose, and the appeal failed at the threshold.

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Issues: (i) whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was leviable where the disallowance arose from an inadvertent error in claiming deduction under Section 80HHB of the Income-tax Act, 1961; (ii) whether the appeal raised any substantial question of law under Section 260A of the Income-tax Act, 1961.

Issue (i): whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was leviable where the disallowance arose from an inadvertent error in claiming deduction under Section 80HHB of the Income-tax Act, 1961.

Analysis: The finding recorded by the fact-finding authorities was that the assessee had disclosed the relevant particulars and that the excess claim resulted from a bona fide mistake on the part of the chartered accountant. No material was shown to establish that the particulars furnished in the return were false or that there was deliberate concealment. A mere unsustainable claim, without more, does not amount to furnishing inaccurate particulars.

Conclusion: Penalty was not leviable and the deletion of penalty was correct.

Issue (ii): whether the appeal raised any substantial question of law under Section 260A of the Income-tax Act, 1961.

Analysis: The proposed questions turned on settled principles and on concurrent factual findings, with no perversity or ignored evidence shown. In an appeal under Section 260A, interference is confined to substantial questions of law, and no debatable or unresolved legal issue was shown to arise on the admitted facts.

Conclusion: No substantial question of law arose.

Final Conclusion: The penalty deletion was sustained and the appeal failed at the threshold for want of any substantial question of law.

Ratio Decidendi: A bona fide, uncontroverted mistake resulting in an unsustainable tax claim, without proof of false particulars or deliberate concealment, does not attract penalty under Section 271(1)(c); and concurrent factual findings on that basis will not give rise to a substantial question of law under Section 260A.

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