TaxTMI 
TaxTMI 
2020 (4) TMI 89
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....of depreciation on non-existing assets, provisions for doubtful debts and prior period expenses. The AO initiated the penalty proceedings u/s 271(1)( c) of the Act in respect of these three additions and levied the penalty vide order dated 30-03-2017 passed u/s 271(1)( c) of the Act. The assessee challenged the action of the AO regarding levy of penalty u/s 271(1)(c) of the Act before the ld. CIT(A). The ld. CIT(A) deleted the penalty levied by the AO in respect of the additions made on account of depreciation on non-existing assets and prior period expenses on the ground that these two additions were deleted by the Tribunal in the quantum appeal. The penalty levied in respect of doubtful debts was confirmed by the ld. CIT(A) as the said....
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....e Jurisdictional High Court, however the findings of this Tribunal on these issues have not been disturbed by the Hon'ble Jurisdictional High Court till date. Therefore, in the facts and circumstances of the case when additions/ disallowances were deleted by this Tribunal then the penalty deleted by the ld. CIT(A) does not require any interference. Thus both the grounds raised by the Revenue are dismissed. 4.1 The assessee in its appeal has raised the following ground:- ''Under the facts and circumstances of the case, the ld. CIT(A) has erred in confirming the levy of penalty u/s 271(1)(c) of I.T. Act, 1961 of Rs. 10,41,34,400/- on account of disallowance of provisions for doubtful debts which is bad in law.'' 4.2 The ld.....
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....ide belief of the assessee about the allowability of the claim of provisions for bad and doubtful debts but the claim of the assessee is patently wrong and unacceptable. The ld. DR further submitted that despite the fact such claim of the assessee is not permissible under the Act which amounts to furnishing the inaccurate particulars of income. The ld. DR relied on the orders of the authorities below qua this issue 4.4 We have considered the rival submissions as well as the relevant materials available on record. During the course of assessment proceeding, the AO made the disallowance of provision for bad and doubtful debts in para 7 of assessment order as under:- ''7. Provisions for Doubtful Debts On verification of....
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....e in its reply stated that the sum has been debited as bad and doubtful provision for dues from consumer but actually it is write off of outstanding of permanent disconnected consumer. Thus it transpires from the assessment order that the assessee has disclosed this fact before the AO and the AO himself has noted the fact from the profit and loss account of the assessee. Though the provision for bad and doubtful debts are not allowable claim until and unless it is actually written off and the said addition was confirmed by the Tribunal in quantum appeal in ITA No. 371/JP/2016 for the Assessment Year 2010-11 vide order dated 28-08-2017 (M/s. Ajmer Vidyut Vitran Nigam Ltd vs ACIT, Circle - 2, Ajmer) by observing at para 48 as under:- ....
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....der the normal provisions of the Act. The rule of consistency therefore equally applies to the assessee company. In the entirety of facts and circumstances of the case, we are of the view that the AO has rightly disallowed the provision for doubtful debts and which has rightly been confirmed by the ld CIT(A). In the result, the ground of the assessee is dismissed.'' Thus from the findings of the AO as well as Tribunal in the quantum proceedings, it is clear that it is not a case of furnishing inaccurate particulars of income or concealment of particulars of income but the claim of the assessee is regarding provision for bad and doubtful debts being outstanding dues from the electricity disconnection consumers. Once the assessee has pr....