Bona fide tax claim and unchanged returned income do not, by themselves, justify concealment penalty.

Penalty under section 271(1)(c) was held unsustainable where the assessee's returned income matched the assessed income and the dispute arose only from a bona fide tax position. The assessee had claimed presumptive taxation under section 44BBB, relying on its understanding that no permanent establishment existed in India and on a certificate issued under section 197. As the issue concerned tax computation and rate, not concealment of income or furnishing of inaccurate particulars, the penalty was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the assessee's returned income and assessed income were the same and the tax position was taken on a bona fide interpretation of the applicable provisions.

Analysis: The penalty had been levied because the assessee's claim of taxation on a presumptive basis under section 44BBB was not accepted and the income was ultimately taxed at a higher rate. The record showed that the assessee had acted on a bona fide understanding regarding the absence of a permanent establishment in India and had also relied on a certificate issued under section 197. The difference concerned the tax computation and rate, not any enhancement of returned income. A mere unsustainable claim does not, by itself, amount to concealment of income or furnishing of inaccurate particulars, and penalty cannot follow automatically in such circumstances.

Conclusion: The penalty under section 271(1)(c) was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: Where the returned income remains unchanged and the assessee's claim is made on a bona fide view of the law, disallowance of that claim or a different tax computation does not, without more, justify penalty for concealment or furnishing inaccurate particulars.

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