Penalty for estimated survey disclosure mismatch deleted where returned income was based on accounts and no concealment was shown.

Penalty for concealment or furnishing inaccurate particulars was held unsustainable where the addition arose only from a difference between an estimated gross profit disclosed during survey and the gross profit returned on the basis of accounts. The reported figures were filed after examination of the books, and the survey disclosure was only an estimate. On those facts, the mismatch by itself did not establish concealment of income or inaccurate particulars, so section 271(1)(c) 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 leviable where the addition arose only from a difference between gross profit estimated during survey and gross profit returned on the basis of accounts.

Analysis: The addition was made solely because the gross profit declared in the return was lower than the rate indicated during survey. The survey disclosure was on an estimated basis, whereas the return was filed after examining the accounts. On these facts, the mismatch did not establish concealment of income or furnishing of inaccurate particulars. A mere difference between an estimated survey offer and the figures disclosed in the return, without more, was insufficient to justify penalty.

Conclusion: Penalty under section 271(1)(c) was not leviable and was deleted, in favour of the assessee.

Ratio Decidendi: Penalty for concealment or inaccurate particulars cannot be sustained when the addition rests only on a variance between an estimated survey disclosure and the income returned on the basis of accounts, without evidence of concealment.

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