Section 276C of the Income Tax Act

Mens rea is a necessary ingredient to attract penalty under Section 271(1)(c) of the Income Tax Act, as 'inaccurate' signifies a deliberate act or omission by the assessee. Clause (iii) of Section 271(1) grants discretionary jurisdiction to the assessing authority regarding penalty amounts.

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.

For the imposition of penalty under section 271(1)(c), the specific conditions laid down in the section must be demonstrably met. The assessee's filed return is the primary document for furnishing income particulars, and inaccuracies therein are crucial for penalty imposition.

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.

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.