Bona fide mistake in a withdrawn tax claim does not automatically attract penalty for concealment or inaccurate particulars.

A withdrawn tax claim does not by itself justify penalty under section 271(1)(c) of the Income-tax Act. Penalty is not automatic merely because an assessee surrenders a claim during assessment; the decisive question is whether the claim involved concealment of income or furnishing of inaccurate particulars. Where the appellate authorities find that the claim was made by bona fide mistake or oversight, rather than deliberate concealment, penalty is not warranted and is not exigible.

---

---

Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the assessee's claims were withdrawn during assessment and were found to be mistaken.

Analysis: Mere surrender of a claim during assessment does not by itself confer immunity from penalty. However, the nature of the claim remains material, and penalty is not automatic where the disallowance stems from a bona fide mistake or oversight rather than concealment of income or furnishing of inaccurate particulars. The concurrent finding of the appellate authorities was that the assessee's claims were withdrawn because they were mistaken and made by oversight.

Conclusion: The penalty was not exigible, and the Revenue's appeal failed.

Ratio Decidendi: A withdrawn or rejected claim does not automatically attract penalty under section 271(1)(c); where the claim is found to be the result of a bona fide mistake or oversight, penalty for concealment or inaccurate particulars is not justified.

---