ITO 9(3)(2), MUMBAI V. SMITH & SHARKS PROJECTS (I) P.LTD, MUMBAI

ITA 3687/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9164 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNA MURTHY
• Assessee Lawyers: R R LINGSUR
• Keywords: Reasonable cause; Bad and doubtful debts; Right to appeal; Condonation of delay
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT (MZ) AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO. 8490/M/2011 ASSESSMENT YEAR: 2007-2008 M/S. SMITH & SHARKS PROJECTS (I) PVT. LTD., 201/202, SONAL LINK HEAVY INDL. ESTATE, LINK ROAD, MALAD (W), MUMBAI 400 062. PAN: AABCS6733L VS. INCOME TAX OFFICER-9(3)(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. (APPELLANT) (RESPONDENT) I.T.A. NO. 3687/M/2011 ASSESSMENT YEAR: 2007-2008 INCOME TAX OFFICER-9(3)(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS. M/S. SMITH & SHARKS PROJECTS (I) PVT. LTD., 201/202, SONAL LINK HEAVY INDL. ESTATE, LINK ROAD, MALAD (W),MUMBAI 400 062. PAN: AABCS6733L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.R. LINGSUR, AR REVENUE BY : SHRI V. KRISHNAMURTHY, DR DATE OF HEARING: 29.11.2012 DA TE OF ORDER: 7.12.2012 O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO CROSS APPEALS UNDER CONSIDERATION. T HE ASSESSEES APPEAL RELATES TO MERITS OF ADDITIONS AND IS AGAINST THE O RDER OF CIT (A)-20, MUMBAI DATED 20.6.2011 FOR AY 2007-2008. WHEREAS, THE REVENUES APPEAL IS IN CONNECTION WITH THE PENALTY ORDER U/S 271(1)(C) OF THE ACT AND IS A GAINST THE ORDER OF THE CIT (A) DATED 14.3.2011 FOR THE SAME AY 2007-2008. BUT THE SUBJECT MATTER IN BOTH THE APPEALS RELATES TO THE ADDITION OF RS. 14.82 LAKHS AND CONCEALMENT PENALTY THEREON. WE SHALL TAKE UP EACH OF THE APPEAL IN THE FOLLOWIN G PARAGRAPHS. ITA NO. 8490/M/2011 (BY ASSESSEE) 2. IN THIS APPEAL ASSESSEE RAISED THE FOLLOWING EFFE CTIVE GROUNDS: 2 1. LD CIT (A) ERRED IN NOT ADMITTING THE APPEAL ON THE GROUND THAT AS BEING OUT OF TIME IGNORING THE PETITION FILED BY TH E COMPANY CONDONING DELAY. 2. LD CIT (A) FURTHER ERRED IN NOT ALLOWING THE APP ELLANTS CLAIM FOR BAD DEBTS AT RS. 14,82,000/-. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING INCOME OF RS. 9,82,390/- AND TH E SAME WAS SCRUTINISED U/S 143(3) OF THE ACT DETERMINING THE ASSESSED INCOME A T RS. 25,06,745/- VIDE ORDER DATED 23.12.2009. AGGRIEVED WITH THE INCREASE IN ASSESSMENT, ASSESS EE FILED AN APPEAL BEFORE THE CIT (A) AND IT WAS FILED BELATEDL Y ON 12.1.2011 . WHILE ADJUDICATING THE SAID APPEAL OF THE ASSESSEE, CIT ( A) MENTIONED THAT THE ASSESSEE WAITED TILL THE RECTIFICATION APPLICATION U/S 154 O F THE ACT WAS DISMISSED BY THE CIT (A) ON 17.8.2010 AND THEREAFTER LAPSE OF 4 MONTHS, ASSESSEE FILED THE REGULAR APPEAL AGAINST THE ORDER OF THE AO ON 12.1.2011 . THUS, WHILE THE ASSESSMENT ORDER WAS DATED 23.12.2009, THE APPEAL AGAINST THE SAID ASSES SMENT ORDER WAS FILED ONLY ON 12.1.2011 I.E. WITH A GAP OF 13 MONTHS. THE REASON GIVEN FOR THE DELAY IS SAID TO BE THE WRONG ADVICE OF CHARTERED ACCOUNTANTS (CAS) WHO SAID TO HAVE SUGGESTED THAT THE ASSESSEE NEEDS TO EXHAUST THE REMEDY AVAILABLE U/S 154 OF THE ACT BEFORE FILING THE APPEAL BEFORE THE CIT (A) ON THE ASSESSMENT ORD ER OF THE AO. AFTER GRANTING OPPORTUNITY TO THE ASSESSEE, CIT (A) DID NOT CONDO NE THE DELAY IN FILING THE APPEAL AND DID NOT ADMIT THE SAME BY RELYING ON THE OLD LE GAL MAXIM LAW FAVOURS THE VIGILANT. SINCE THE CIT (A) DID NOT ADMIT THE APPEAL, THE IS SUE ON THE MERITS OF THE ADDITION OF RS. 14.82 LAKHS MADE ON ACCOUNT OF BAD DEBTS WAS ADJUDICATED BY HIM. 4. AGGRIEVED WITH THE NON-ADMISSION OF THE APPEAL A S WELL AS THE NON- ADJUDICATION ON ACCOUNT OF ISSUE OF BAD DEBTS, ASSE SSEE FILED THE PRESENT APPEAL BEFORE US. THE PRESENT APPEAL IS ALSO FILED BELATED LY WITH THE DELAY OF 98 DAYS. AT THE OUTSET, ON THE PRELIMINARY ISSUE OF CONDONATION OF DELAY, LD COUNSEL BROUGHT OUR ATTENTION TO THE ASSESSEES LETTER DATED 30.11.2011 I.E. THE PETITION FOR CONDONATION OF DELAY AS WELL AS THE AFFIDAVIT OF SHRI N.P. MANI , MD OF THE COMPANY. IN THE SAID PETITION. SHRI N.P. MANI, MANAGING DIRECTOR OF THE COMPANY MENTIONED THAT THE ASSESSEE WAS ILL-ADVISED BY THE CAS IE M/S. ANIL THAKARAR & CO AND M/S. BHARAT & CO TO FIRST EXHAUST THE RECTIFICATION ROUTE U/S 154 OF TH E ACT AND FINALLY THE ASSESSEE FILED THE APPEAL BEFORE THE CIT(A) ONLY ON 12.1.2011 REJECTING THE ADMISSION OF THE 3 APPEAL BY THE ASSESSEE. THIS ORDER WAS RECEIVED BY THE ASSESSEE ON 09.07.2011 AND THE SAME WAS SENT TO THE SAID CAS FOR NECESSARY ACTION ON THEIR PART. ON SEEING THEIR INACTION IN THE MATTER, THE ASSESSEE ENGAGED OTHER CAS NAMELY M/S. R.R. LINGSUR & ASSOCIATES, WHO FINALLY FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL WITH THE DELAY OF 98 DAYS. RELEVANT PARAGRAPHS FROM THE PETITION ARE EXTRACTED HERE FOR THE SAKE OF COMPLETENESS OF THE ORDER. AS ADVISED BY ITS EARLIER CHARTERED ACCOUNTANTS M/S . ANIL THAKARAR & CO AND M/S. BHARAT & CO, APPELLANT COMPANY FILED RECTIFICATION APPLICATION U/S 154 OF THE ACT INSTEAD OF PREFERRING APPEAL UNDER SECTI ON 246A OF THE ACT. AFTER ALMOST LAPSE OF TWELVE MONTHS FROM THE RECEIPT OF THE ORIGINAL ORDER U/S 143(3) OF THE ACT, BASED ON THE ADVICE OF ITS ERSTW HILE CA, APPELLANT COMPANY PREFERRED APPEAL BEFORE THE CIT (A) AGAINST THE ORD ER PASSED U/S 143(3) OF THE ACT. THE LEARNED CIT (A) DID NOT ADMIT THE APPE AL ON THE GROUND THAT IT IS BARRED BY LIMITATION IGNORING THE PETITION FOR COND ONING THE DELAY FILED BY THE APPELLANT COMPANY. AN AFFIDAVIT FILED BY THE APPEL LANT COMPANY IN THIS REGARD WAS ALSO NOT CONSIDERED BY THE LEARNED CIT (A). CO PY OF THE SAID AFFIDAVIT IS ENCLOSED TO THIS PETITION. THE SAID ORDER OF THE LEARNED CIT (A) WAS RECEIVED BY THE APPELLANT COMPANY ON 9 TH JULY, 2011. COPY OF THE SAID ORDER WAS SENT TO TH E ERSTWHILE CA OF THE APPELLANT COMPANY FOR NECESSARY ACTION ON THEIR PAR T. HOWEVER, THEY DID NOT TAKE ANY ACTION ON THE MATTER FOR THE REASONS KNOWN TO THEM.. ON REALIZING THE FACT THAT ITS ERSTWHILE CA ARE NOT TAKING ANY CORRECTIVE STEPS IN THIS REGARD THE APPELLANT COMPANY APPROACHED ITS PRESENT CA M/S. R.R. LINGSUR & ASSOCIATES, BEING REPRESENTED MR. RAMAKRISHNA R. LINGSUR. ON ADVICE RECEIVED FROM ITS PRESENT CA, TH E APPELLANT COMPANY IS PERFORMING THIS APPEAL BEFORE YOUR HONOURS. THE ONLY POINT OF GRIEVANCE IN THE SAID APPEAL IS N ON ALLOWANCE OF CLAIM OF BAD DEBTS BY THE AO. THE APPELLANT COMPANY IS OTHE RWISE HAVING CASE ON MERITS BUT DUE TO NEGLIGENCE ON THE PART OF ITS ERSTWHILE CA , IT COULD NOT SUBMIT THE APPEAL IN TIME. IT IS CAREFULLY SUBMITTED THAT FOR WRONG ADVICE AND NEGLIGENCE OF ITS ERSTWHILE CA, APPELLANT COMPANY SHOULD NOT BE DENIE D THE JUSTICE WHICH OTHERWISE IS DUE TO IT. NON ADMISSION OF THE SAID APPEAL MAY INVITE AVOIDABLE FINANCIAL HARDSHIPS TO THE APPELLANT COMPANY. IT CA N BE SEEN FROM THE ABOVE THAT THE APPELLANT COMPANY WAS PREVENTED FROM SUFFI CIENT / GENUINE GROUNDS FOR NOT FILING THE PRESENT APPEAL IN TIME AND HENCE YOUR HONOURS ARE REQUESTED TO CONDONE THE DELAY OF 98 DAYS IN FILING THE PRESENT APPEAL AND ADMIT THE SAME. 5. FROM THE ABOVE WRITE UP, THE ASSESSEE ADMITS THA T THERE IS NEGLIGENCE IN FILING APPEAL BEFORE THE CIT(A) AND ALSO IN FILING APPEAL BEFORE THE ITAT. REFERRING TO THE DELAY IN FILING APPEAL BEFORE THE CIT(A), ASSESSEE HAS RAISED THE POINTING FINGER AGAINST HIS ERSTWHILE CAS NAMELY M/S ANIL THAKARAR & CO AND M/S. K. BHARAT & CO 4 AND MENTIONED THAT THE NEGLIGENCE IS ATTRIBUTABLE T O THEM. WHEN THE SAME SHOULD CONSTITUTE REASONABLE CAUSE FOR ADMISSION OF THE AP PEAL, THE CIT(A) ERRED IN NOT ADMITTING THE APPEAL. ASSESSEE HAS NOT FILED ANY AF FIDAVIT FROM HIS ERSTWHILE CAS OWNING THE RESPONSIBILITY OF INACTION IN FILING APP EALS BELATEDLY BEFORE THE CIT(A). THEN, REFERRING TO THE 98 DAYS DELAY IN FILING APPE AL BEFORE THE ITAT, ASSESSEE REPEATED THE ALLEGATION OF NEGLIGENCE AGAINST HIS C AS. NEITHER THE PETITION FOR CONDONATION FOR DELAY NOR THE AFFIDAVIT OF SRI N.P. MANI REFERS TO THE EFFORTS INITIATED BY THE ASSESSEES ACCOUNTING/LEGAL DEPARTMENT IN PU RSUING THE CAS TO COMPLY WITH THE PROCEDURES OF FILING APPEALS IN TIME. ASSESSEE HAS NOT FILED ANY AFFIDAVIT FROM HIS ERSTWHILE CAS OWNING THE RESPONSIBILITY OF INACTION IN FILING APPEALS BELATEDLY BEFORE THE CIT(A). THE AFFIDAVIT OF N.P. MANI DOES NOT ENL IST THE EFFORTS MADE BY THE ASSESSEE IN PURSUING FILING THE APPEAL IN TIME. FU RTHER, IN THE AFFIDAVIT DATED 19.3.2011, IT WAS MENTIONED THAT THE DELAY SHOULD B E CONDONED IN VIEW OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. INDIAN GOSPEL FELLOWSHIP TRUST (2011) 331 ITR 283. LD COUNSEL AL SO MENTIONED THAT THE MANAGING DIRECTOR OF THE COMPANY IS A TECHNOCRAT AND HE IS N OT WELL VERSED WITH THE LEGAL PROCEDURES. THEREFORE, CAS HAS RENDERED WRONG ADVI CE TO THE ASSESSEE AND THEIR NEGLIGENCE SHOULD SUFFICIENT REASON FOR CONDONATION OF DELAY AND IN ADMITTING OF THE APPEAL BY THE CIT(A). FURTHER, THE ASSESSEE CLAIMS THE SAME INACTION OF THE CAS CONSTITUTE A SUFFICIENT / GENUINE GROUNDS FOR NOT F ILING THE PRESENT APPEAL BEFORE ITAT IN TIME AND THE ASSESSEE REQUESTS FOR CONDONIN G THE DELAY OF 98 DAYS IN FILING THE PRESENT APPEAL AND ADMIT THE SAME. 6. ON THE OTHER HAND, LD DR FOR THE REVENUE NARRATE D THE FACTS LEADING DELAY OF MORE THAN ONE YEAR IN FILING THE APPEAL BEFORE THE CIT (A) AND THE DELAY OF 98 DAYS BEFORE THE TRIBUNAL AND MENTIONED THAT THE ASSESSEE IS GIVEN THE RIGHT OF APPEAL AND SAID RIGHT HAS NOT BEEN AVAILED ADMITTEDLY DUE TO N EGLIGENCE. ALLEGATION OF NEGLIGENCE OF THE CAS ARE NOT SUBSTANTIATED BY THE ASSESSEE AND IN SUCH CIRCUMSTANCES, IT IS MERELY A CASE OF CONVENIENTLY SHIFTING THE RESPONSIBILITY OF FILING APPEAL IN TIME TO THE CAS. HE ALSO MENTIONED THAT THE CAS HAVE NOT CONCURRED WITH THE ALLEGATION OF THE ASSESSEE. WHERE THERE IS NO A FFIDAVIT ATLEAST FROM HIS ERSTWHILE CAS, IN ALTERNATIVE, THE ASSESSEE SHOULD BE HELD RE SPONSIBLE FOR THE DELAY IN FILING THE 5 APPEAL BEFORE THE CIT(A) AND THE TRIBUNAL. THEREFOR E, THERE IS NO CASE FOR CONDONATION OF DELAY EITHER BY THE CIT(A) OR TRIBUN AL. LD DR ALSO MENTIONED THAT IT IS A CASE OF REPEATED DELAY AND THE ASSESSEE IS A H ABITUAL DEFAULTER OF LEGAL PROCEDURES AND HE DOES NOT DESERVE LENIENT APPROACH THE TRIBUNAL. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDE R OF THE REVENUE AND CONSIDERED RELEVANT FACTS LEADING TO THE DOUBLE REQ UESTS FOR THE CONDONATION OF DELAY BEFORE THE CIT(A) AND HONBLE TRIBUNAL. THERE IS NO DISPUTE ON THE FACTS AS WELL AS ON THE ISSUE OF EXISTENCE OF NEGLIGENCE IN FILING A PPEALS IN TIME BEFORE THE CIT(A) AND TRIBUNAL. CORE ISSUE WHICH IS RELEVANT FOR ADJU DICATION RELATES TO IF THE SAID NEGLIGENCE IS ATTRIBUTABLE TO THE ASSESSEE OR TO TH E CAS IE M/S. ANIL THAKARAR & CO AND M/S. BHARAT & CO AND FURTHER, THE SAID NEGLIGEN CE CONSTITUTES SUFFICIENT GROUND FOR CONDONING THE DELAY. 8. IN THIS REGARD WE HAVE PERUSED THE AVAILABLE MATE RIAL PLACED BEFORE US. IT IS AN ADMITTED POSITION THAT THE ASSESSEE DOES NOT HAV E EVIDENCE TO SUGGEST THAT THE CAS ACCEPTED THE ALLEGATION OF NEGLIGENCE. FURTHER, THE CAS HAVE NOT FILED AN AFFIDAVIT OWNING THE RESPONSIBILITY OF THE STATED N EGLIGENCE IN FILING APPEAL IN TIME BEFORE US AND ALSO THE CIT(A). SIMILARLY, THERE IS NO EVIDENCE PLACED BEFORE US TO SUGGEST THAT THE CAS HAVE GIVEN ADVICE TO EXHAUST F IRST THE REMEDY AVAILABLE U/S 154 OF THE ACT. THIS IS NOT THE FIRST YEAR OF COMMENCEM ENT OF BUSINESS OF THE ASSESSEE THAT IT IS NOT WELL VERSED WITH THE INCOME TAX PROCE DURES. IN OUR OPINION, THE ASSESSEE-COMPANY IS LED BY A TECHNOCRAT IS NO DEFEN SE AS HE HAS GOT A TEAM OF EMPLOYEES TO RENDER THE LEGAL ADVISE AND TO COMPLY WITH THE PROCEDURE OF LAW. ASSESSEE HAS NOT FILED ANY EVIDENCE IN THE FORM OF BOARD RESOLUTIONS IF ANY TO SUGGEST THAT THE COMPANY APPLIED ITS MIND ON THE IS SUE OF FOLLOWING THE ADVISE OF THE CAS TO FIRST EXHAUST THE REMEDY AVAILABLE U/S 154 O F THE ACT. IN OUR OPINION, NO COUNSEL SHALL ADVISE HIS CLIENT AGAINST THE FILING OF REGULAR APPEAL, WHEN THE LAW IS UNAMBIGUOUS IN SUCH MATTERS. LD COUNSEL HAS NOT INF ORMED THE BENCH OF ANY EVIDENCE TO SUGGEST THAT THE STATED NEGLIGENCE IS A TTRIBUTABLE TO THE CAS ONLY. IT IS ALSO A FACT THE ALLEGED NEGLIGENCE CONTINUED EVEN A FTER THE RECTIFICATION WAS 6 DISMISSED BY THE CIT(A) AS EVIDENT FROM THE DATE OF THE ORDER OF CIT (A) AND THE DATE OF FILING OF APPEAL. 9. NOW, WE SHALL DEAL WITH THE ISSUE OF DELAY OF 98 DAYS IN FILING APPEAL BEFORE US. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE S ENT THE COPY OF THE ORDER OF THE CIT(A) IN THE MONTH OF JULY 2011 TO THE SAME CAS AN D THEY HAVE NOT ACTED UPON IT. THE ASSESSEE HAS TO OUTSOURCE THE SERVICES OF PRESE NT CAS NAMELY M/S. R.R. LINGSUR & ASSOCIATES, WHO FILED THE PRESENT APPEAL BEFORE T HE TRIBUNAL. THE CASE OF THE ASSESSEES COUNSEL BEFORE IS THAT M/S ANIL THAKARAR & CO AND M/S. K. BHARAT & CO IE ERSTWHILE CAS HAVE CONTINUED TO BE NEGLIGENT TILL M /S. R.R. LINGSUR & ASSOCIATES GOT INTO THE JOB OF FILING APPEALS. IN RESPONSE TO THE QUERY FROM THE BENCH REGARDING THE DUTIES AND VIGILANT APPROACH OF THE ASSESSEE, LD CO UNSEL HAS NOTHING TO COMMENT. IN OUR OPINION, THE ASSESSEE IS NOT TRANSPARENT. IT IS NOT KNOWN WHY THE ASSESSEE CONTINUED TO RELY ON THE CAS, WHO ARE DECLARED NEGL IGENT AS EVIDENT FROM THE EXPERIENCE WITH THE APPEAL BEFORE CIT (A). IN THE CO NDONATION PETITION BEFORE THE CIT(A), THE ASSESSEE ALLEGED THAT M/S ANIL THAKARAR & CO AND M/S. K. BHARAT & CO ARE NEGLIGENT. IN THAT CASE, WHY THE ASSESSEE CONT INUED TO DEPEND ON SUCH NEGLIGENT CAS OR WHY ASSESSEE FAILED TO PURSUE WITH THE SAME CAS TO FILE THE PRESENT APPEAL BEFORE THE TRIBUNAL IN TIME. IS NOT THE ASSE SSEE RESPONSIBLE FOR THE DELAY IN FILING APPEAL? IN OUR OPINION, THE ANSWER IS AFFIRMA TIVE AND IS AGAINST THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE OPINION, T HE EXPLANATION GIVEN BY THE ASSESSEE IS NOT SUBSTANTIATED AND THE ASSESSEE DOES NOT HAVE ADEQUATE/SUFFICIENT GROUND FOR CONDONATION OF DELAY IN FILING APPEAL BE FORE US. THE CAS-CENTRIC REASONS GIVEN BY THE ASSESSEE ARE NOT SUBSTANTIATED AND THE REFORE, NOT SUSTAINABLE. HENCE, THE APPEAL FILED BELATEDLY BY THE ASSESSEE SHOULD N OT BE ADMITTED. THUS, THE PRELIMINARY GROUND RAISED BY THE ASSESSEE RELATING TO CONDONATION IS DISMISSED. CONSEQUENTIALLY, THE ADJUDICATION OF OTHER ISSUES O N MERITS BECOMES ACADEMIC AND, THEREFORE, DISMISSED AS NOT ADMITTED. WE ORDER ACCO RDINGLY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED AS NOT ADMITTED. 7 I.T.A. NO. 3687/M/2011 (BY REVENUE) 11. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF THE CIT (A)-20, MUMBAI DATED 14.3.2011 FOR THE ASSESSMENT YEAR 2007 -2008. THE MAIN ISSUE IN THIS APPEAL RELATES TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT OF RS. 4,98,841/-. 12. BRIEFLY STATED RELEVANT FACTS THAT LEAD TO THE LEVY OF PENALTY U/S 271(1)(C) ARE THAT THE ASSESSEE DEBITED AN AMOUNT OF RS. 16,50,42 8/- ON ACCOUNT OF DOUBTFUL DEBTS AND AN AMOUNT OF RS. 14,82,000/- IS PART OF T HE SAID DEBIT WRITTEN OFF AGAINST M/S. MAGNUM INFRA PROJECTS P. LTD. AO DISALLOWED T HE SAID CLAIM OF DEDUCTION STATING THAT THE ASSESSEE FAILED TO FULFILL THE CON DITIONS ENVISAGED U/S 36(1) OF THE ACT AND INITIATED THE PENALTY BY ISSUE OF STATUTORY NOT ICES. IN RESPONSE TO THE PENALTY NOTICES, ASSESSEE SUBMITTED THAT THE ASSESSEE IS NO T SUPPOSED TO ESTABLISH THAT THE DEBT HAS BECOME BAD AND NON-RECOVERABLE AND RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT JUDGMENT IN THE CASE OF TRF LIMITED V S. CIT (323 ITR 397) (SC). IT IS ALSO SUBMITTED BEFORE HIM THAT WHEN ALL THE PART ICULARS REGARDING CLAIM OF BAD DEBTS WERE DISCLOSED, WHEN THE SAID PARTICULARS ARE NOT CORRECT PENALTY IS NOT EXERCISABLE U/S 271(1)(C) OF THE ACT. ON CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE, CIT (A) GRANTED RELIEF BY HOLDING THAT TH E ASSESSEE IS NOT DOUBTFUL IN MATTERS OF DISCLOSURE OF PARTICULARS OF INCOME AND HAVE NOT FURNISHED INACCURATE PARTICULARS. BY RELYING ON THE HONBLE APEX COURT JUDGMENT IN THE CASE OF CIT VS. ATUL MOHAN BINDAL (317 ITR 1) (SC) AND CIT VS. RELI ANCE PETRO PRODUCTS PVT. LTD (322 ITR 158), CIT (A) DELETED THE PENALTIES. AGGRI EVED WITH THE SAME, REVENUE FILED THE PRESENT APPEAL BEFORE US. 13. BEFORE US, LD DR FOR THE REVENUE ARGUED STATING THAT THE CIT (A) ERRONEOUSLY RELIED ON THE JUDGMENTS OF THE APEX COURT IN THE CA SES OF RELIANCE PETRO PRODUCTS P. LTD. (SURPA) AND ATUL MOHAN BINDAL (SUPRA), WHICH ARE DISTINGUISHABLE ON FACTS. 14. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE FURNISHED ALL THE PARTICULARS REGARDING THE DOUBTFU L DEBTS / BAD DEBTS. HE ALSO MENTIONED THAT THE ASSESSEE NEED NOT TO ESTABLISH T HAT THE DEBTS IN QUESTION 8 BECOME BAD AND IRRECOVERABLE AND RELIED ON THE CITE D JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LIMITED (SUPRA). 15. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORD ERS OF THE REVENUE ON THE FACTS AVAILABLE BEFORE US. IT IS AN UNDISPUTED FAC T THAT THE ASSESSEE DISCLOSED BAD DEBTS IN THE RETURN FILED BEFORE THE ASSESSING AUTH ORITY. THE AO DISALLOWED THE CLAIM HOLD THAT THE SAID DEBTS HAVE NOT BECOME BAD AND AR E NOT EVIDENCED AS IRRECOVERABLE DEBTS. IN OUR OPINION, THIS LINE OF A RGUMENT IS NOT SUSTAINABLE IN LAW IN VIEW OF PLETHORA OF JUDGMENTS IN FORCE. THE ASSESSE E IS NO LONGER UNDER OBLIGATION TO PROVE THAT THE DEBTS IN QUESTION ARE BAD AND IRRECO VERABLE. FURTHER, THERE IS NO BAR ON THE ASSESSEE IN WRITING OFF THE BAD DEBTS OF THE YEAR AS ALLOWABLE EXPENDITURE WHEN THE CORRESPONDING CREDITS ARE SHOWING IN THE A CCOUNTS OF THE YEAR. IT IS FOR THE BUSINESSMEN TO MANAGE HIS AFFAIRS AND ACCOUNTS IN S UCH A WAY WHICH ARE SUITED TO HIS BUSINESS. CONSIDERING THE FACT THAT THE ASSESS EE HAS DISCLOSED THE RELEVANT FACTS NECESSARY FOR MAKING ASSESSMENT, THE ALLEGATION OF CONCEALMENT DOES NOT HAVE STRENGTH TO STAND. THEREFORE, WE ARE OF THE OPINIO N THAT THE ORDER OF THE CIT (A) DELEING THE PENALTY SHOULD NOT CALL ANY INTERFERENC E. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF DECEMBER, 2012. SD/- SD/- (D. MANMOHAN) (D. KARUNAKARA RAO) VICE PRESIDENT ACCOU NTANT MEMBER DATE : 7.12.2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR E, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// 9 BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI