Where an assessee wrongly classified the gain on the sale of a depreciable asset as a long-term capital gain but, upon noticing the error, filed a revised computation and paid the entire tax before the assessment order was passed, the levy of penalty under section 271(1)(c) was not justified. The High Court held that a mere making of a claim that is not sustainable in law, by itself, does not amount to furnishing inaccurate particulars of income. Since all primary facts were correctly disclosed in the return and no information was found to be factually incorrect, the incorrect legal claim could not attract penalty for furnishing inaccurate particulars. (AY. 2010-11)