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Issues involved:
1. Interpretation of section 271(1)(c) of the Income-tax Act regarding inaccurate particulars of income. 2. Validity of penalty imposed under section 271(1)(c) for furnishing inaccurate particulars and false claims of depreciation. Issue 1: Interpretation of section 271(1)(c) of the Income-tax Act regarding inaccurate particulars of income. The case involved the assessee, engaged in hiring cylinders, who claimed depreciation on cylinders and computers. The Assessing Officer found discrepancies in the claimed depreciation amounts leading to understatement of income. The Tribunal initially upheld the penalty for inaccurate particulars related to cylinders but set aside the penalty for false claims on computers. The Revenue sought a direction to the Tribunal to refer questions of law to the High Court. The High Court noted the Tribunal's failure to consider the correct provisions of law and the omission of the relevant Explanation to section 271(1)(c) from April 1, 1976. The High Court found that a question of law arose from the Tribunal's order due to the incorrect application of the law. Issue 2: Validity of penalty imposed under section 271(1)(c) for furnishing inaccurate particulars and false claims of depreciation. The Assessing Officer imposed a penalty under section 271(1)(c) on the assessee for furnishing inaccurate particulars about the sale value of cylinders and false claims of depreciation on computers. The Commissioner of Income-tax (Appeals) upheld the penalty, but the Tribunal varied in its decision. The Tribunal canceled the penalty related to cylinders but remanded the case back to the Assessing Officer for the penalty on false claims of depreciation on computers. The High Court directed the Tribunal to refer a question on the cancellation of the penalty for the High Court's opinion, highlighting the need for a legal assessment of the Tribunal's decision. The High Court disposed of the petition, emphasizing the importance of legal interpretation in penalty imposition under section 271(1)(c) for the assessment year in question. This detailed analysis covers the interpretation of section 271(1)(c) of the Income-tax Act in relation to inaccurate particulars of income and the validity of penalties imposed for furnishing inaccurate particulars and false claims of depreciation, as discussed in the judgment delivered by the High Court of Delhi.
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