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2016 (6) TMI 29 - ITAT DELHI

2016 (6) TMI 29 - ITAT DELHI - TMI - Penalty u/s 271(1)(c) - provision for bad and doubtful debts claimed - Held that:- The impugned order passed by the CIT (A) confirming the penalty order is not sustainable in the eyes of law as the assessee has claimed provision for bad and doubtful debts due to inadvertent and bonafide mistake and voluntarily revised the income by offering the said amount of ₹ 4,59,714/- for taxation. Consequently, the impugned order passed by CIT (A) is hereby set asi .....

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ppeals)-VI, New Delhi confirming the order passed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter the Act ) qua the assessment year 2009-10 on the grounds inter alia that :- 1.a That the Ld. CIT (A) - VI erred both in facts and in law while sustaining the penalty of ₹ 1,56,154/- under section 271 (1)(c) levied by the assessing officer for alleged concealment of income of ₹ 4,59,714/-. 1.b That while imposing penalty under section 271(1)(c) th .....

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, the facts of this case are : the assessment of the assessee was completed at ₹ 1,19,49,400/- u/s 143(3) of the Act by disallowing the provision for doubtful debts to the tune of ₹ 4,59,714/-. Consequently, the AO initiated the penalty proceedings u/s 271(1)(c) of the Act and assessee was called upon to explain, who has filed comprehensive submissions. The AO on the basis of material on record came to the conclusion that since concealment of income and furnishing of inaccurate parti .....

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lty of ₹ 1,56,154/- u/s 271(1)(c) of the Act. 3. Assessee carried the matter before the ld. CIT (A) who has dismissed the appeal vide impugned order. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. The ld. AR .....

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necessary details; that though the amount was written off during the financial year 2009-10, the assessee has not claimed the deduction in the relevant AY 2010-11 u/s 36(vii) and as such, the assessee has no intention of claiming any benefit twice. However, on the other hand, the ld. DR for the revenue relied upon the penalty order passed by the AO as well as order passed by the ld. CIT (A). 6. Undisputedly, the assessee claimed deduction for provision for doubtful debts amounting to ₹ 4,5 .....

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urnished inaccurate particulars of income and thereby concealed the income during the AY 2009-10? 8. The assessee has taken a consistent stand that she has inadvertently claimed deduction for provision for doubtful debts to the tune of ₹ 4,59,714/- due to bonafide mistake of her accountant, which has not been believed by the AO and has made an addition of ₹ 4,59,714/- by returning findings to the following effect :- DISALLOWANCE OF PROVISION FOR DOUBTFUL DEBTS During the year under c .....

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11.2011 submitted as under:- "it is submitted that the assessee has .filed its income tax return for the AY 2009-10 at taxable income of ₹ 11489690/-. The assessee while filing the income tax return has inadvertently claimed deduction for provision for doubtful debts amounting to ₹ 459714/-. It is submitted that the mistake was bonafide and genuine and it was made by the accountant of her proprietorship concern. Further we submit that the debts in respect of which the above said .....

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e tax return of the assessee be treated as revised. Further, we request that the deduction for debts written off be allowed to the assessee from taxable income of assessment year 2010-11." During the course of asstt. proceedings, assessee has filed a revised computation of total income. The reason for filing of revised computation of income is stated that wrong claim of provision for doubtful debts. The revised computation of income cannot be accepted as per the Hon'ble Supreme Court .....

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ing to ₹ 459714/- and provisions of act whereby provisions are not allowable being unascertained liability. Hence amount of ₹ 459714/- is hereby disallowed and added back to the income of the assessee company. 9. The plea of inadvertent mistake raised by the assessee has also not been accepted by the CIT (A) who has affirmed the findings returned by the AO. 10. A perusal of the balance sheet for AY 2008-09, lying at pages 5 to 10 of the paper book, schedule VI apparently shows that t .....

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turn filed for the AY 2010-11 twice. This fact goes to prove that the provision for doubtful debts amounting to ₹ 4,59,714/- has been claimed by the assessee during the year under consideration due to inadvertent and bonafide mistake. So, we are of the considered view that candid admission made by the assessee during assessment proceedings and the fact that he has not claimed any such deduction during the AY 2010-11 go to prove that it is merely an inadvertent and bonafide mistake and does .....

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