Penalty under section 271(1)(c) fails when the assessment additions are deleted and no concealment is shown.

Penalty under section 271(1)(c) could not stand because it was entirely dependent on assessment additions that had already been deleted by the Tribunal, so the foundation for concealment or inaccurate particulars disappeared. The article also notes that a claim of expenses supported by an audit report, even if ultimately unsustainable, does not by itself establish concealment or furnishing of inaccurate particulars. On that basis, the penalty order was set aside and the assessee succeeded.

---

---

Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable after the additions made in the assessment order had been deleted, and whether the claim of expenses supported by audit report could justify penalty.

Analysis: The penalty was found to be wholly dependent on the assessment order. Since the additions made in the assessment were already deleted by the Tribunal, the foundation for penalty no longer survived. The claim of expenses was also held to be covered by the principle that a mere unsustainable claim does not by itself amount to concealment or furnishing of inaccurate particulars.

Conclusion: The penalty order was set aside and the issue was decided in favour of the assessee.

Final Conclusion: The assessee succeeded and the penalty proceedings arising from the assessment did not survive.

Ratio Decidendi: Penalty under section 271(1)(c) cannot survive when the very additions on which it is based are deleted, and a bona fide claim unsupported by concealment does not amount to furnishing inaccurate particulars.

---