Bona fide tax claims and full disclosure defeat concealment penalty where no false particulars were shown.

Penalty under section 271(1)(c) was not leviable where the assessee had disclosed all primary facts and made claims under section 42 and for higher depreciation on a bona fide interpretation of the contract and statute. Mere disallowance of those claims did not establish concealment or furnishing of inaccurate particulars, because there was no finding that the particulars filed were false or incorrect. A bona fide explanation supported by full disclosure took the case outside Explanation 1. The penalty was deleted for both disallowances.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable for the assessee's claim of deduction under section 42 and its alternative claim for higher depreciation on the land based drilling platform.

Analysis: The assessee had disclosed all primary facts in the return and the claims were made on a bona fide interpretation of the contractual and statutory provisions. The original assessment had accepted both claims, and the controversy concerned only the sustainability of the claims in law. Mere rejection of a claim, without a finding that the particulars furnished were false, incorrect, or inaccurate, does not by itself attract penalty. A bona fide explanation supported by disclosure of all material facts also takes the case outside the mischief of concealment under Explanation 1.

Conclusion: Penalty under section 271(1)(c) was not leviable and was deleted in respect of both disallowances.

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