Penalty for inaccurate particulars fails without evidence of deliberate concealment or culpable conduct.

Penalty under Section 271(1)(c) was held unsustainable where the Revenue did not establish by evidence that the assessee deliberately furnished inaccurate particulars of income. The assessment had been reopened after the return under Section 139, but the penalty record still lacked material showing culpable conduct or proved mens rea. The appellate review under Section 250 did not remedy that deficiency. On that basis, the penalty was deleted in favour of the assessee.

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Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was sustainable for alleged furnishing of inaccurate particulars of income.

Analysis: The assessee had filed a return under Section 139 of the Income-tax Act, 1961 and the assessment was later reopened under Section 148 of the Income-tax Act, 1961. In the penalty proceedings, neither the Assessing Officer nor the appellate authority established by evidence that the assessee had deliberately and wilfully furnished inaccurate particulars of income. Penalty under Section 271(1)(c) of the Income-tax Act, 1961 is not automatic and requires a foundation of material showing culpable conduct. The record did not the necessary mens rea had been proved, and the appellate examination under Section 250 of the Income-tax Act, 1961 did not cure that defect.

Conclusion: The penalty was not sustainable and was deleted, in favour of the assessee.

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