Concealment penalty fails when quashed reassessment removes the underlying additions and eliminates surviving tax sought to be evaded.

Penalty for concealment or furnishing inaccurate particulars cannot survive when the reassessment orders and the consequential quantum additions forming its foundation have been quashed. As no addition remained and no tax sought to be evaded survived under the relevant statutory explanation, levy of penalty under Section 271(1)(c) was unjustified. The penalty deletion was therefore sustained.

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Issues: Whether penalty for concealment or furnishing inaccurate particulars can survive where the reassessment proceedings and consequential quantum additions have been quashed.

Analysis: The reassessment orders forming the foundation for the penalty proceedings had already been quashed in the assessee's quantum appeals. Consequently, the additions on which the penalty was founded did not subsist. In the absence of any surviving tax sought to be evaded within the meaning of the statutory explanation, levy of penalty was not justified.

Conclusion: Penalty under Section 271(1)(c) was not leviable; the deletion of penalty was sustained in favour of the assessee.

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