Penalty for concealment not leviable where transfer pricing adjustment was debatable and all relevant facts were disclosed.

Penalty under section 271(1)(c) was not leviable on transfer pricing adjustment for corporate guarantee fee or on disallowance of education cess and secondary higher education cess. The corporate guarantee fee addition had been sustained in quantum only on an estimated arm's length price basis and was treated as debatable, so there was no material showing concealment of income or furnishing of inaccurate particulars. For the cess disallowance, the relevant facts had been fully disclosed, and mere non-pressing of the quantum ground did not by itself justify penalty. The penalty deletion was upheld.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable on the additions relating to transfer pricing adjustment for corporate guarantee fee and disallowance of education cess and secondary higher education cess.

Analysis: The addition on account of corporate guarantee fee was sustained in quantum only on an estimated determination of arm's length price, and the issue was treated as debatable. On that footing, there was no material to show concealment of income or furnishing of inaccurate particulars. As to education cess and secondary higher education cess, the relevant facts had been disclosed, and mere non-pressing of the quantum ground did not automatically attract penalty. The absence of suppression of facts or false particulars meant that the statutory conditions for penalty were not satisfied.

Conclusion: Penalty under section 271(1)(c) was not leviable on either addition, and the deletion of penalty was upheld.

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