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Issues Involved:
1. Legality of the penalty levied under section 22(1)(d) of the Karnataka Agricultural Income-tax Act, 1957. 2. Justification for the delay in issuing the penalty notice. 3. Validity of the revisional authority's order under section 35 of the Act. Detailed Analysis: 1. Legality of the Penalty Levied under Section 22(1)(d) of the Act: The primary issue concerns the legality of the penalty of Rs. 1,00,517 levied under section 22(1)(d) of the Karnataka Agricultural Income-tax Act, 1957. The assessee, a partnership firm engaged in coffee planting and other cash crops, filed a return for the assessment year 1989-90 indicating a net loss of Rs. 70,12,091.25. However, the return was filed late and lacked complete information as required by law. The return only indicated the figure of Rs. 70,12,091.25 as a loss without detailed particulars. The assessee later admitted that the actual expenditure was Rs. 8,73,942.50, significantly lower than the initially claimed Rs. 94,64,000. The court noted that the assessee did not file a revised return and only provided accurate details after a notice was issued by the authorities. The court held that the act of furnishing different figures towards agricultural expenses was not voluntary and indicated a deliberate attempt to furnish inaccurate particulars, justifying the penalty under section 22(1)(d). 2. Justification for the Delay in Issuing the Penalty Notice: The assessee argued that the notice for penalty was issued almost three years after the finalisation of the assessment, indicating a lack of immediate consequence or satisfaction by the assessing authority. The court examined section 22 of the Act, which does not specify that the satisfaction for penalty must be recorded during the assessment proceedings. The court referred to the decision in CIT v. S. V. Angidi Chettiar [1962] 44 ITR 739, where the Supreme Court held that satisfaction for penalty could be reached during assessment proceedings and the actual levy could occur later. The court concluded that the time gap between the assessment order and the penalty notice did not vitiate the proceedings, as the satisfaction of the authority was evident from the show-cause notice issued. 3. Validity of the Revisional Authority's Order under Section 35 of the Act: The revisional authority, exercising powers under section 35 of the Act, set aside the appellate order and restored the penalty imposed by the assessing officer. The assessee contended that the revisional authority did not record its satisfaction for the penalty and that the penalty proceedings were initiated without proper justification. The court held that the revisional authority had the power to correct an erroneous appellate order prejudicial to the interests of the Revenue. The court emphasized that the levy of penalty serves as a deterrent to ensure compliance with the Act and discourage non-compliance. The revisional authority's action to restore the penalty was deemed justified and within its jurisdiction. Conclusion: The court dismissed the revision petition, confirming the order of the revisional authority. The court found no reason to interfere with the penalty imposed, as the assessee's conduct indicated a deliberate attempt to furnish inaccurate particulars. The penalty proceedings were upheld as valid, and the revisional authority's order was confirmed.
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