Law:

Section:

Section 277 of the income-tax act, 1961-Offences and prosecutions-False statement in verification-assessee-company had filed a list of raw material lying with it but it later filed another list of the same in response to a query from ito-both lists were signed by petitioner who was assessee's director-there was a discrepancy in lists on account of which ito made additions to assessee's income-on appeal, both aac and tribunal accepted assessbe's explanation regarding discrepancy in two lists and deleted addition made by ito-However, before AAC's decision, ITO instituted complaint against petitioner under section 277-whether, in view of aforesaid decision of aac and tribunal concerning impugned addition, no prosecution lay against petitioner under section 277 and hence proceedings under said section had to be quashed-held, on facts, yes Facts In the course of the assessment proceedings for the year 1973-74, the ITO, having found that the assessee-company had purchased machine components worth Rs. 34,102 from its allied concern on 26-3-1973, which did not find place in the list of raw material lying with the assessee in the factory, required the assessee to furnish a copy of the list of raw materials, which was accordingly submitted by the assessee's new accountant on 2-2-1976. However, on further scrutiny of the assessment records, the ITO found that the assessee had already filed one such list of materials lying in the factory and the same contained entirely different particulars of the articles lying in the factory from the list subsequently submitted by the assessee on 2-2-1976. In particular, machine components worth Rs. 34,102 purchased by the assessee from its allied concern were omitted in the original list of raw materials. On account of this material discrepancy, the ITO examined the managing director (petitioner) of the assessee, who had signed the lists, their chartered accountant, and the new accountant. All of them confirmed the genuineness and correctness of the original list and stated (i) that the components of the value of Rs. 34,102 had been duly sold before the end of the relevant financial year; (ii) that the new accountant had prepared the…

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