Penalty for concealment not leviable where regular books existed and section 144 assessment alone did not prove inaccurate particulars.

Penalty under section 271(1)(c) was held inapplicable where the assessee maintained regular books of account and there was no finding that they were false or manipulated. The mere fact that assessment was completed under section 144, even with a difference of more than twenty per cent between returned and assessed income, did not by itself establish concealment or furnishing of inaccurate particulars. In the absence of fraud, gross neglect or wilful neglect, the Explanation to section 271(1)(c) was not attracted, and the penalty could not be sustained.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessee had maintained regular books of account and the assessment was completed under section 144 of the Income-tax Act, 1961.

Analysis: The returned income and the assessed income differed by more than twenty per cent, but the assessee's books were regularly maintained and there was no finding that they were false or manipulated. The mere fact that the assessment was made under section 144 did not by itself establish concealment or furnishing of inaccurate particulars. On the facts, no fraud or gross or wilful neglect could be attributed to the assessee so as to attract the Explanation to section 271(1)(c).

Conclusion: Penalty was not leviable and the assessee succeeded on the penalty issue.

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