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Dharmendra Textile Processor (166 Taxman 65) the penalty being a civil liability, it is a fit case for imposition of penalty. Aggrieved, assessee carried the matter in appeal before the CIT(Appeals) but without any success. Learned CIT(Ap peals) confirmed the penalty and observed as follows :-

"2.4. 1 h av e carefully c onsidered va ri ous judicial p ron oun cem ent s cited ab ov e and th e decisi on taken by my p redecessor CIT(A) in his order no. 559 /CIT( A)-XXIV/37(4)/08-09 d at ed 25.02 .2010. In the instant case, th e appell ant has f ailed to furni sh satisf actory expl anati on s reg arding the credit of Rs.1,00,000 /- which has b een sh own as adv anc e f rom Visw as & Visw as duri ng F.Y. 2005-0 6. In ab sence of satisf actory expl an ations, th e Assessing Officer h as t reated it as un expl ain ed cash credit u/s. 68 and ad ded it to th e t otal inc ome of the app ellant. No appeal has b een filed before th e ITAT ag ain st the CIT(A)'s order. Th e H on'ble Supreme Court in th e case of Union of India v s. Dh armend ra Textiles Proc essors [2008] 30 6 ITR 277 h as view ed as f oll ow s:

3. The assessee is not satisfied and is in further appeal before us.

4. We have heard the rival contentions, perused the material on record, and duly considered factual matrix of the case as also the applicable legal position.

5. We find that the assessee had received the advance from customer by cheque and the refund was also made by cheque as evident from the documents produced before us in the paper book. When learned Departmental Representative's attention was drawn to the same, he did not have much to say beyond placing reliance on the orders of the authorities below. We have also noted that even after Hon'ble Supreme Cou rt's decision in the case of Dharmendra Textile Processors (supra), there is no change in the position that when assessee has a reasonable explanation, even when he is not able to establish factual elements embedded therein to the hilt, the penalty u/s. 271(1)(c) cannot be imposed. We may refer to a coordinate Bench's decision in the case of Kanbery Software India Pvt. Ltd. -vs.- DCIT (31 SOT 153) in this regard which has, at length explained the limited impact of Hon'ble Supreme Court's decision in the case of Dharmendra Textile Processors (supra). Therefore, not only that the authorities below were in error on facts but also on the legal position. In our considered view, the assessee's explanation of having received the money as customer advance, whether or not acceptable in quantum proceedings, was a reasonable explanation so far penalty p roceedings I . T. A . N o . : 1 2 1 0 / K o l . / 2 0 11 A s s e s s m e nt y e a r : 2 0 0 6- 0 7 were concerned. We are, therefore, of the considered view that it was not a fit case for imposition of penalty u/s. 271(1)(c) and we, therefore, direct the Assessing Officer to delete the impugned penalty. The assessee gets the relief accordingly.