Bona fide clerical error in purchase totals did not justify penalty for concealment of income.

An incorrect totalling of purchases was treated as a clerical or arithmetical mistake rather than concealment of income or furnishing of inaccurate particulars. The record showed no mala fide intent, contumacious conduct, or deliberate suppression of income, and the absence of a balance sheet for the relevant year weakened any inference of intentional error in account preparation. On that basis, penalty under section 271(1)(c) was not justified and the cancellation of 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 was leviable for an incorrect totalling of purchases, or whether the mistake was bona fide and did not amount to concealment of income or furnishing of inaccurate particulars.

Analysis: The discrepancy in the purchase totals was treated as a clerical or arithmetical mistake. The record did not show any mala fide intent, contumacious conduct, or deliberate suppression of income. It was also noted that no balance sheet had been prepared and filed for the relevant year, weakening the inference that the error must have been detected as intentional during preparation of accounts.

Conclusion: Penalty was not warranted under section 271(1)(c), and the cancellation of penalty was upheld in favour of the assessee.

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