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2007 (4) TMI 220 - KARNATAKA HIGH COURTPenalty levied u/s 271(1)(c) - concealment of income on the cost of purchase of machinery - Whether the Tribunal was right in law in holding that making a false claim of depreciation, extra shift allowance, investment allowance, etc., neither amounts to concealment of income, nor furnishing of inaccurate particulars to attract penalty u/s 271(1)(c)? - HELD THAT:- We are of the view that the Assessing Officer cannot be said to have committed any error particularly in the light of the false information for the purpose of benefits in terms of the Act. The same was challenged before the appellate authority. The appellate authority has chosen to dismiss the same thereby confirming the findings of the Assessing Officer. Surprisingly, when the matter was taken to the Tribunal, the Tribunal has failed to look into the matter for the purpose of false information in terms of section 271(1)(c) in its order. On the other hand, the Tribunal condones the conduct by holding that the claim was made on the basis of the certificate issued by the factory manager. The Tribunal forgot to notice that when the claim was made on the basis of installation, the machinery had not even left the premises of the seller. The defence of factory manager's certificate can never be considered. Even otherwise, it cannot be said that the certificate of the factory manager would come to the aid of the assessee in a matter like this. In fact the Tribunal has chosen to rely on its decision rendered in T. Ashok Pai v. Asst. CIT[1994 (7) TMI 109 - ITAT BANGALORE] In the case on hand, it is not counsel/agent but it is the factory manager, who has issued the certificate. The assessee is bound by the act of his servants/factory manager as well. In these circumstances, we are of the view that the Tribunal has committed a serious legal error in the case on hand. The assessing authority after noticing the conduct has given a detailed finding with regard to the matter in his order. He has also commented upon the certificate issued by the auditor. We have no hesitation in reversing the order of the Tribunal and thereby restoring the order of the assessing authority. Section 271(1)(c) has to be strictly applied in the larger interest of discipline in filing correct returns by the assessee. In these circumstances, this appeal is accepted. Questions of law are answered in favour of the Revenue.
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