Bona fide exemption claim based on pending registration application does not by itself justify penalty for concealment.

Penalty under section 271(1)(c) of the Income-tax Act, 1961 was held unsustainable where a charitable trust claimed exemption under section 11 on the basis of a registration application already filed before the return and disclosed to the Revenue. The trust's claim was made on a bona fide understanding that registration would relate back to the commencement date, and the delay in grant of registration was not attributable to the assessee. On those disclosed primary facts, the claim could not be treated as concealment of income or furnishing of inaccurate particulars, and the penalty was deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was justified where the assessee, a charitable trust, claimed exemption under section 11 on the basis of a pending application for registration under section 12A.

Analysis: The application for registration was filed before the return of income and was on record with the Revenue when the claim for exemption was made. The subsequent effective date of registration was fixed by the authority only upon disposal of the application, and the delay in granting registration could not be attributed to the assessee. The claim was made on a bona fide understanding that registration would relate back to the date of commencement, and there was no material to establish concealment of income or furnishing of inaccurate particulars.

Conclusion: Penalty under section 271(1)(c) was not sustainable and was rightly deleted.

Ratio Decidendi: Where the assessee's claim is made on a bona fide basis and all primary facts supporting the claim are disclosed on record, a mistaken claim for exemption does not by itself amount to concealment of income or furnishing of inaccurate particulars warranting penalty under section 271(1)(c) of the Income-tax Act, 1961.

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