Bona fide disclosure defeats concealment penalty where an omitted disallowance stems from an inadvertent filing error.

Penalty under section 271(1)(c) was held not leviable where the assessee's failure to make a suo motu disallowance of unpaid interest arose from a bona fide and inadvertent error. The relevant particulars were already disclosed in the statutory audit report, annual report, and return-related documents, and the omission to add back the amount was treated as a non-contumacious mistake. On those facts, there was no intention to conceal income or furnish inaccurate particulars, so the concealment penalty was not attracted. The principle in Price Waterhouse Coopers was applied, while Mak Data P. Ltd. was distinguished.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable for the assessee's failure to make a suo motu disallowance of unpaid interest under section 43B(e), when the relevant particulars had been disclosed in the audit report and return-related documents.

Analysis: The disclosed materials showed that the amount in question was reflected in the statutory audit report and annual report filed with the return. The omission to add back the amount was treated by the fact-finding authorities as an inadvertent mistake, supported by the assessee's immediate rectification petition and the surrounding circumstances. On these facts, the conduct was held not to be contumacious and not indicative of an intention to conceal income or furnish inaccurate particulars. The decision in Mak Data P. Ltd. was distinguished, while the principle in Price Waterhouse Coopers Private Limited was applied.

Conclusion: Penalty under section 271(1)(c) was not attracted, and the assessee was held not liable for concealment or furnishing inaccurate particulars.

Ratio Decidendi: Where a wrong claim arises from a bona fide and inadvertent error, and the relevant particulars are otherwise disclosed, penalty for concealment or furnishing inaccurate particulars is not exigible under section 271(1)(c).

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