Concealment or furnishing inaccurate particulars: penalty not leviable where survey surrender was disclosed and accepted in assessment.

Where amounts admitted during a survey were recorded in books, declared in the return filed within time and treated as business income in a regular assessment under Section 143(3), penalty under Section 271(1)(c) cannot be imposed absent proof of concealment or furnishing of inaccurate particulars; penal provisions require strict construction and cannot rest on presumption or conjecture. The analysis concludes that surrender followed by timely disclosure and acceptance in assessment negates exigibility of penalty, and the Revenue's appeal against deletion of the penalty fails in favor of the assessee.

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Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 can be levied where income surrendered during survey was disclosed in the return filed within time and accepted as business income in the regular assessment under Section 143(3) of the Income-tax Act, 1961.

Analysis: The facts show admission of undisclosed stock and cash during survey under Section 133A of the Income-tax Act, 1961, the amounts were recorded in the books, declared in the return filed for the relevant assessment year and treated as business income in the assessment completed under Section 143(3) of the Income-tax Act, 1961. No separate additions were made under Sections 68 to 69D of the Income-tax Act, 1961 and the assessing officer did not dispute the source or classification of the disclosed amounts as business income. Penal liability under Section 271(1)(c) of the Income-tax Act, 1961 requires proof of concealment or furnishing of inaccurate particulars; penal provisions are to be strictly construed and cannot be imposed on the basis of mere presumption, surmise or conjecture. Judicial authorities applying similar facts hold that where surrender in survey is followed by disclosure in the return filed within time and acceptance in assessment, penalty under Section 271(1)(c) is not exigible.

Conclusion: Penalty under Section 271(1)(c) of the Income-tax Act, 1961 deleted; appeal by the Revenue dismissed in favour of the assessee.

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