“Section 271(7)”

Penalty under section 271(1)(c) for furnishing inaccurate particulars cannot be imposed for a mere disallowance, bona fide mistake, or inadvertent error, especially when relevant facts are disclosed in the tax audit report. The levy of penalty requires proof of intent to conceal income or furnish false particulars.

Penalty under Section 271(1)(c) is not attracted when there is a genuine difference of opinion on a point of law between the assessee and the Assessing Officer. Such cases fall outside the scope of Explanation 1 to Section 271(1)(c).

An assessee should be granted the benefit of a declaration filed at the appellate stage, even if delayed, as appeals are a continuation of assessment proceedings. The delay in filing declarations under section 206C(1A) should not be a ground to deny the benefit to the assessee.

A thing is done in 'good faith' if it is done honestly, irrespective of whether negligence was involved. This is guided by Section 3(22) of the General Clauses Act.