Penalty for under-reporting attributable to misreporting applies...

Penalty for under-reporting attributable to misreporting applies where inadmissible deductions are claimed against interest income from nationalised banks and dividend income. The statutory protection based on a bona fide explanation is confined to under-reported income and does not extend to under-reporting resulting from misreporting. Once the Assessing Officer classifies the conduct as misreporting and applies the corresponding charge, penalty follows at the prescribed rate. Payment of tax and interest after disallowance in scrutiny assessment, while penalty proceedings remain pending, does not constitute voluntary disclosure or establish a bona fide mistake. The penalty for misreporting was sustained and the appeal dismissed.