COMMISSIONER OF INCOME TAX Vs. VALLIAPPA TEXTILES

JUDGEMENT

(1.) REVENUE is before us aggrieved by the order dtd 5-3-2001 of the tribunal in the case on hand in CP No. 1282/1999. The assessing officer levied a penalty under Section 271(1)(c) of the Act for concealment of income on the cost of purchase of machinery amounting to Rs. 14,65,669.80. The penalty levied is Rs. 8,00,000/- for concealment. Aggrieved by the same. An appeal was filed before the Commissioner of Income Tax appeal. Commissioner agreed with the levy of penalty and confirmed the same. Assessee filed an appeal before the tribunal. The tribunal cancelled the penalty levied by the assessing officer on the ground of no concealment in terms of the Act. REVENUE aggrieved by the same filed a Miscellaneous Petition to rectify the errors. The tribunal rejected the same. Thereafter assessee sought for a reference to this Court. After hearing, the tribunal has no chosen to refer the following questions of law: Whether on the facts and in the circumstances of the case, particularly having regard to the fact that the assessee withdrew its claim for depreciation, extra shift allowance and investment allowance etc., only after it was confronted with full evidence with regard to the fact that the impugned machinery had not even reached its premises before the close of the relevant accounting year and only after exhausting itself in proving genuineness of its claim, the tribunal was right in law in cancelling the penalty under Section 271(1)(c) on the ground that the levy was not justified as the false claim was made on the strength of the certificate issued by the Factory Manager and there was nothing to show that the assessee included these machineries in its fixed assets?

(2.) 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 under Section 271(1)(c)? 2. Heard the learned Counsel for the parties and perused the material on record.