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2005 (8) TMI 307 - ITAT HYDERABAD-BPenalty levied u/s 271(1)(c) - For Concealment Of Income - HELD THAT:- The very fact that the income returned in response to notice u/s 148 was assessed on protective basis shows that on the date of filing revised return, the assessing officer has not detected concealment of income of assessee. The returns of income were filed by the assessee voluntarily and co-operated with the Assessing Officer in all respects in completion of assessment. Section 271(1)(c) of the Act gives discretion to the assessing officer to exonerate an assessee from levy of penalty, even in a case where the assessee concealed income or furnished incorrect particulars of income. No doubt mere filing of revised return will not automatically protect an assessee from levy of penalty but, in a given case, where an assessee comes forward with clean breast though after detection, and files returns of income offering additional income and expresses remorse for his past conduct unhesitantly, the assessing officer may have to exercise the, discretion in favour of such assessee as otherwise the expression 'may' in section 271(1)(c) remains a dead letter if it is understood that in a case of admitted concealment penalty is automatic. At least in some exceptional cases, discretion vested in the officer should be used to drop proceedings. In our considered view, the case before us is a more befitting case to exercise such discretion, particularly in view of the fact that at the time of filing revised returns, the Assessing Officer has not made up his mind to add the income in assessee's hand but assessee voluntarily offered it to tax and thus it cannot be said to be a case of declaring the income after detection by department. However, considering the peculiar circumstances of the case we deem it a fit case for cancelling the penalty and we direct the Assessing Officer accordingly. In the result, the appeals filed by the assessee are allowed.
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