Inadvertent computational errors corrected during assessment preclude penalty for furnishing inaccurate particulars; penalty deleted on these facts.

Where an assessee's omission in the original return stems from inadvertent computational errors and the assessee voluntarily and promptly files a revised computation during assessment that results in no discrepancy between the revised offered income and the income determined by the assessing officer, penalty for furnishing inaccurate particulars cannot be sustained; the penalty is deleted and the appeal allowed. The analysis emphasises that corrections made during assessment after notice, demonstrable mistakes (double claim, misclassification) and consistent supporting records establish absence of conscious or deliberate furnishing of inaccurate particulars and warrant benefit of doubt and relief from penalty.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 can be sustained where an assessee, having made inadvertent computational errors in the original return, files a revised computation during assessment offering additional income and there is no variation between the revised offered income and the income ultimately determined by the Assessing Officer.

Analysis: The facts record an upward variation of income offered by the assessee in the revised computation and the income determined by the Assessing Officer by the same amount. The revisions arose from computational mistakes including double claim of interest and misclassification of amounts, and were corrected during the assessment proceedings after notice under section 142(1) of the Income-tax Act, 1961. The record shows allowance of brought forward losses at figures inconsistent with the original computation, supporting the existence of multiple inadvertent computational errors. Where the additional income is voluntarily offered in the assessment proceedings and the assessee demonstrates that the omission was due to inadvertence and promptly rectified, the facts align with principles permitting benefit of doubt. Judicial precedents addressing imposition of penalty for inaccurate particulars when genuine mistakes are rectified during assessment support treating such corrections as indicating absence of conscious and deliberate furnishing of inaccurate particulars.

Conclusion: Penalty under section 271(1)(c) of the Income-tax Act, 1961 is not sustainable on these facts; the penalty is deleted and the appeal is allowed in favour of the assessee.

Ratio Decidendi: Where an assessee establishes that an omission in the original return arose from inadvertent computational errors and the assessee voluntarily and promptly files a revised computation during assessment resulting in no variation between the revised offered income and the income determined by the Assessing Officer, penalty under section 271(1)(c) of the Income-tax Act, 1961 cannot be imposed for furnishing inaccurate particulars.

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