INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Furnishing of inaccurate particulars Disallowance of certain expenses under section 40(a)(ia)--AO was of the view that assessee had violated provisions of section 40(a)(ia) as expenses claimed in profit and loss account were credited either to the payee's account or some other account. assessing officer, then, initiated penalty proceedings under section 271(1)(c) on the ground that assessee had furnished inaccurate particulars by not considering the disallowances as per the provisions of section 40(a)(ia) for the defaults in non-deduction of tax. Assessee contended that it had not concealed any facts and the disallowance out of expenses was made by applying the provisions of section 40(a)(ia) or furnishing of inaccurate particulars of income and there was no evidence of any concealment of income on the part of assessee. Held: In the present case, assessee had furnished all the relevant material facts along with its return of income. The audit report in the statutory form was also annexed to the return of income by assessee. Assessee had filed an explanation which could not be said to be not bona fide. Merely because certain disallowance had been made due to some provision of law, it could not be said that assessee was guilty of concealment of income or furnishing of inaccurate particulars of income. Therefore, penalty levied under section 271(1)(c) was deleted.