Concealment or inaccurate particulars must be proved before a Section 271(1)(c) penalty is sustained; penalty deleted.

Deletion of a penalty under Section 271(1)(c) is affirmed where authorities find no specific incorrect particulars or suppression in the return; mere assertion that a claimed loss is unsustainable, speculative or a valuation loss does not automatically amount to concealment or furnishing of inaccurate particulars. The analysis applies the principle that penalty provisions are to be strictly construed and requires positive findings that particulars in the return were incorrect or suppressed before invoking the penalty; absent such findings the penalty cannot be sustained, leading to dismissal of the Revenue appeal in favour of the assessee.

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Issues: Whether the penalty under Section 271(1)(c) of the Income-tax Act, 1961 levied for alleged concealment of income and furnishing of inaccurate particulars in respect of claimed business losses was rightly deleted by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal.

Analysis: The question was examined on the facts and in law with reference to the return filed and the findings of the Assessing Officer, the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal. Precedents establish that section 271(1)(c) requires either concealment of particulars of income or furnishing of inaccurate particulars of income; mere claiming of an item or a claim unsustainable in law does not by itself constitute inaccurate particulars. The authorities below recorded that no specific detail in the return was shown to be incorrect, nor was there evidence of suppression of particulars; the Assessing Officer's treatment of the loss as speculative or a valuation loss did not automatically establish concealment or inaccurate particulars. The courts relied on the principle that penalty provisions must be strictly construed and that absence of findings showing incorrect or erroneous particulars in the return precludes invocation of section 271(1)(c).

Conclusion: The deletion of the penalty under Section 271(1)(c) is upheld; the appeal by the Revenue is dismissed, which is in favour of the assessee.

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