Penalty under Section 271(1)(c) fails after quantum additions are deleted and no concealed income survives.

Penalty under Section 271(1)(c) could not survive where the corresponding quantum additions in search-related assessments were deleted in appeal. Once the additions ceased to exist, there was no remaining basis to treat any income as concealed or to allege furnishing of inaccurate particulars. The penalty order was entirely dependent on additions that no longer survived, so deletion of the penalty was upheld in favour of the assessee.

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Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 survives after deletion of the corresponding quantum additions for Assessment Years 2011-12 and 2012-13.

Analysis: The penalty arose from additions made in search-related assessments. The quantum additions were subsequently deleted in appeal. Once the additions ceased to exist, there remained no income that could be treated as concealed income or as income in respect of which inaccurate particulars had been furnished. The penalty order was thus dependent entirely on additions that no longer survived.

Conclusion: The penalty under Section 271(1)(c) could not be sustained and the deletion of penalty was upheld in favour of the assessee.

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