Penalty for concealment cancelled where additions arose from accounting mistakes, not deliberate suppression or inaccurate particulars.

Penalty under section 271(1)(c) was found unsustainable because the gross profit addition stemmed from an arithmetical mistake in treating the closing stock figure as gross profit, while the trading account and profit and loss account were already before the assessing authority. The sundry debtors issue was also treated as an accounting error, and the record did not show deliberate suppression, contumacious conduct, or intent to defraud the revenue. On those facts, the matter was characterised as inadvertent error rather than concealment or furnishing of inaccurate particulars, and the penalty was cancelled.

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Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was sustainable on the facts of the case.

Analysis: The addition relating to gross profit arose from an apparent arithmetical mistake in carrying the closing stock figure as gross profit, while the trading account and profit and loss account were already before the assessing authority. The omission regarding sundry debtors was also treated as a mistake in accounting, and the facts did not disclose any deliberate suppression, contumacious conduct, or intent to defraud the revenue. On these materials, the case was treated as one of inadvertent error rather than concealment or furnishing of inaccurate particulars.

Conclusion: The penalty was not justified and was cancelled.

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