Penalty not to be levied if tax not deducted by relying on certificate issued by CA In Commissioner of Income Tax vs. Filtrex Technologies (P.) Ltd., the High Court held that payment made without deducting tax at source on basis of certificate issued by Chartered Accountant, was a bona fide mistake and hence, assessee was not liable to penalty for concealment of income. Penalty not to be levied if tax not deducted by relying on certificate issued by CA.  Facts: The assessee being a company was engaged in the manufacture of carbon blocks used in water purifying filters. It filed its return of income for the assessment year 2006-07. During the assessment proceedings, the AO disallowed the amount paid for technical services to M/s. Filtres Holding Pte. Ltd., Singapore. The AO treated the said amount as concealment of income and furnishing of inaccurate particulars of income. Thus, AO initiated proceedings for levy of penalty under Section 271(1) (c) of the Act. On appeal, CIT (A) and Tribunal allowed the appeal of assessee concluding that has neither concealed the income nor furnished inaccurate particulars of income. On this, appeal was made to the High Court. Held: The Court observed that the assessee has made payments to three different foreign parties. Out of which two payments were held not liable for TDS. The payment made to Singapore Company was held to be liable for deduction of tax. Regarding this, the assessee argued that the said payment was made by relying on the certificate issued by the Chartered Accountant. In addition, no violations were reported in Form No. 3CD. In this case, the Chartered Accountant has given a certificate to the effect that the assessee was not liable to deduct tax at source while making the payment to Singapore Company. The assessee acted on the basis of the certificate issued by the expert and therefore, it shall be incorrect to conclude that the assessee has deliberately concealed the income or furnished inaccurate particulars of the income. To support this, assessee has filed Form 3CD along with the return of income in which the Chartered Accountant has not reported any violation by the assessee. Thus, no disallowance was attracted under section 40(a) (ia). Hence, the Court concluded that penalty shall not be levied as failure to deduct tax by the assessee was a bona fide mistake and therefore, assessee has neither concealed the income nor furnished inaccurate particulars of income. _________________________________________________________________