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2018 (9) TMI 1829 - AT - Income TaxPenalty u/s 271(1)(c) - case selected for scrutiny - on the specific queries raised by the AO during the proceedings and subsequent hearings that the asssesee has admitted that it had wrongly claimed deductions on account of provision for slow moving inventory and on account of doubtful debts written off - HELD THAT:- This is not a case of the assessee suo moto and voluntarily offering to tax an amount being doubtful debts written off and being provision for slow moving inventory written back. It was only on the case being selected for scrutiny and on the specific queries raised by the AO during the proceedings on 25.02.2005 and subsequent hearings that the asssesee has admitted that it had wrongly claimed deductions on account of provision for slow moving inventory and on account of doubtful debts written off. The contention of the assessee that it was under a belief that these provisions in question were disallowed in the earlier AY is not believable for the reason that, it is a matter of record that that assesee has not suo moto disallowed these provisions in the computation of income filed by it for the earlier Assessment Year. On the one hand wrong computations of income were filed for the earlier A.Y. The claim that on a belief that the assessee had suo moto disallowed provisions for the earlier year, deductions of the writebacks were claimed as not taxable in this year is not believable on the facts of this case. The order of assessment in this case has been framed with reference to revised return filed by the assesee and hence, in our view, the concealment of income or furnishing of inaccurate particulars of income have to be viewed with reference to this revised return of income and not to the original return of income as the revised return of income is a valid return of income. We are of the considered view that on the facts of this case the Explanation given by the assessee is not bonafide and the claims made are not inadvertent mistakes. The assessee in our view has furnished inaccurate particulars of income and hence penalty u/s 271(1)(c ) has been rightly levied by the Ld.AO and it has rightly been confirmed by the Ld.CIT(A). Coming to the initiation of penalty proceedings, the AO had initiated penalty proceeding at page 6 of his order which, in our view is valid initiation of proceedings. AO was right in levying penalty u/s 271(1)(c ) of the Act on the ground that the assessee has furnished inaccurate particulars of income and the First Appellate Authority has rightly upheld this order. - Decided against assessee
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