Bona fide valuation on expert advice cannot by itself trigger penalty for inaccurate particulars when primary facts are fully disclosed.

Penalty under section 271(1)(c) is not automatic and requires proof of concealment, furnishing of inaccurate particulars, or a false or non-bona fide explanation. Where the assessee disclosed all primary facts, relied on a registered valuer, and the dispute arose only from differing expert opinions on market value, the mere existence of an alternative valuation did not establish inaccuracy or suppression. The omission to annex certain papers was also insufficient, because no undisclosed sale instance was relied upon. The penalty was therefore not exigible, and the assessment-based penalty orders were set aside.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the assessee disclosed all primary facts but adopted a valuation of capital asset based on a registered valuer's opinion, and whether the explanation offered by the assessee was bona fide so as to exclude concealment or furnishing of inaccurate particulars.

Analysis: Penalty under section 271(1)(c) is not automatic and is attracted only when the Revenue establishes concealment or furnishing of inaccurate particulars, or when the statutory explanation is triggered on the requisite facts. A mere difference between two valuation reports does not, by itself, establish that the assessee furnished inaccurate particulars. The assessee had disclosed the property, the basis of valuation, and had relied on a registered valuer; the dispute arose from divergent expert opinions on market value as on 1 April 1981. The material did not show that the assessee had suppressed a fact necessary for valuation, or that the valuation method adopted was wholly unsupported by law. The omission to annex certain papers, where no sale instance was in fact relied upon, was not enough to establish deliberate furnishing of inaccurate particulars. The penalty proceedings, being penal in nature, required a clear finding that the explanation was false or not bona fide, which was absent.

Conclusion: The penalty was not exigible and the finding that the assessee furnished inaccurate particulars could not be sustained.

Final Conclusion: The assessment-based penalty orders were set aside because the valuation dispute reflected a bona fide difference of expert opinion and not a proven case of concealment or inaccurate particulars.

Ratio Decidendi: A bona fide valuation adopted on expert advice, where all primary facts are disclosed, does not amount to furnishing inaccurate particulars merely because the Revenue adopts a different valuation; penalty under section 271(1)(c) requires proof of a false or non-bona fide explanation or conscious suppression of material facts.

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