Section 276C of the Income Tax Act

To attract penalty under Section 271(1)(c), *mens rea* is essential for furnishing inaccurate particulars, signifying a deliberate act or omission by the assessee; further, Section 271(1)(iii) grants discretionary power to the Assessing Authority regarding the penalty quantum.

The Supreme Court clarifies the scope of penalty under Section 271(1)(c), holding that for its applicability, conditions stated in the provision must strictly exist, and making an incorrect claim in law does not automatically amount to furnishing inaccurate particulars of income.

For the applicability of Section 271(1)(c) penalty, the Assessing Officer must be satisfied that the assessee concealed income or furnished inaccurate particulars; however, this satisfaction is not required to be recorded in a particular manner or reduced to writing.

An assessee's agreement to an addition or voluntary disclosure of income does not automatically establish concealment for levying penalty under Section 271(1)(c). While such agreement may arise from various reasons like avoiding litigation, the assessee must still discharge the burden of proving that the addition was not due to concealment.

For a penalty to be imposed under Section 271(1)(c) of the Income Tax Act, all statutory conditions specified in that section must explicitly exist. The liability arises when the particulars of income disclosed in the return of income are found to be inaccurate.

Penalty for furnishing inaccurate particulars is not attracted merely because some items are not included in the tax return or the return contains incorrect statements, provided these transactions are fully incorporated and reflected in the assessee's account books.

Where an assessee agrees to the inclusion of certain amounts discovered from accounts, and such amounts are considered his income, the levy of penalty is justified without requiring further evidence of concealment.

Income disclosed in a return filed in response to a notice under section 153C, following a search, which was not disclosed in the original return, constitutes a clear case of concealment attracting penalty under section 271(1)(c). Explanation 5 to section 271(1)(c) need not be invoked in such circumstances.