Penalty under section 271(1)(c) cannot follow a quantum addition alone without independent proof of concealment.

Penalty under section 271(1)(c) is not justified merely because an addition toward unexplained cash credits is sustained in quantum proceedings. The assessee had furnished relevant details and supporting evidence, and the mere rejection of that explanation in assessment did not by itself establish concealment or furnishing of inaccurate particulars. Quantum and penalty proceedings operate independently, so the statutory ingredients for penalty must be separately proved. On this basis, the penalty was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable on the basis of an addition made towards unexplained cash credits.

Analysis: The assessee had furnished relevant details and supporting evidence, but the assessing authority did not accept the explanation. Mere confirmation of an addition in quantum proceedings does not automatically justify penalty, since quantum and penalty proceedings operate independently and the conditions for penalty must be separately satisfied.

Conclusion: The penalty was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: An addition sustained in quantum proceedings does not ipso facto warrant penalty under section 271(1)(c) of the Income-tax Act, 1961 unless the ingredients of concealment or furnishing of inaccurate particulars are independently established.

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