Bona fide claim on a debatable lease premium issue cannot justify concealment penalty where the quantum dispute is pending in appeal.

Penalty under section 271(1)(c) was not sustainable where the underlying disallowance of proportionate amortised lease premium was still debatable, because the jurisdictional High Court had already admitted the assessee's appeal on the same quantum question as a substantial question of law. On those facts, the claim could not be treated as concealment or furnishing of inaccurate particulars merely because it was rejected in assessment. The ITAT quashed the penalty, holding that a bona fide claim on a pending and arguable quantum issue does not, by itself, attract concealment penalty.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable when the underlying disallowance on lease premium had already been admitted by the jurisdictional High Court as a substantial question of law.

Analysis: The penalty arose from the disallowance of the assessee's claim for proportionate amortised lease premium. The quantum dispute was not final, because the jurisdictional High Court had already admitted the assessee's appeal on the very question whether the lease premium constituted revenue expenditure and whether a proportionate deduction was allowable. Where the underlying issue is pending as a substantial question of law, the claim cannot be treated as a settled concealment or furnishing of inaccurate particulars. The making of such a claim, by itself, does not attract penalty when the claim is debatable and supported by bona fide contest on the quantum issue.

Conclusion: Penalty under section 271(1)(c) was held not leviable and was quashed in favour of the assessee.

Ratio Decidendi: Penalty for concealment or furnishing of inaccurate particulars is not sustainable where the very quantum issue giving rise to the addition has been admitted by the High Court as a substantial question of law, because the issue remains debatable and the claim cannot be treated as furnishing inaccurate particulars merely for being rejected in assessment.

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