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4. The Ld. CIT(A) considered the explanation of the assessee, deleted the penalt y with regard to the surrendered amount of Rs. 45 lakhs. His findings in para 5 of the appellate order are reproduced as under:-

"5. I have considered the facts of the case and it becomes apparent that the assessee having made the disclosure of Rs. 45 Lacs paid the due taxes in the form of advance tax and did not make any specific retraction, but failed to include the disclosed amount in the return of income leading to claim of refund of Rs. 11,96,888/-. The issue of non disclosure did not come to the focus of the AO till 24/12/2008 when specific query on disclosure was raised. The assessee responded by filing a revised return on 26/12/2008 by including the disclosure amount or Rs. 45 lacs. The AR is basically claiming that the mistake of not disclosing the surrendered amount in the return of income was intentional and not intended to retract the disclosure made. It has further been established that the copy of capital account and cash flow statement was filed with the A.O. on 16/12/2008 though the assessee was confronted on the issue of non disclosure by the AO on 24/12/2008. The analysis of above detailed facts and sequence of events shows that there has been a bonafide omission on the part of the assessee / assessee's counsel and the same has been rectified by filing a revised return which is considered valid u/s 139(5). It is important to appreciate here the state of mind of the assessee at the time of filing of the original return which is clearly intended to owner the disclosure made during the course of search operation as necessary taxes had been paid and no retraction had been made. Further necessary entries in the books of account evidencing the fact of disclosure of Rs. 45 Lacs had also been made and submitted during the course of assessment proceeding even before any issue about this raised by the assessee. This means that and unintentional mistake that had crept in while filing the return of income had been rectified within the time permissible as per provision of section 139(5). The revised return so filed can not be ignored by the AO in determining the assessee's liability for imposition of penalty u/s 271(1)(c). Since there is no difference between assessed income and valid revised return filed by the assessee, there is no case for imposition of penalty. As such the same is deleted."

9. We have heard the rival submissions and considered the material available on record. It is not disputed that assessee has made surrender of Rs. 45 lakhs during the course of search on 10.8.2006 itself and surrender was within the knowledge of the Revenue Department. The assessee never retracted from the surrender so made during the course of search. The assessee also made such surrender while his statement was recorded during search u/s 132(4) of the Income Tax Act. The assessee in pursuance of his surrender also deposited the advance tax of Rs. 15 lakhs in three installments of Rs. 5 lakhs each on 14.9.2006, 12.12.2006 and 15.3.2007. Thus, all facts were disclosed to the Revenue Department in pursuance to the surrender of Rs. 45 lakhs that assessee made during the course of search. The assessment year under appeal is 2007-08 and the due date of filing of return u/s 139(1) did not expire on the date of the surrender made by the assessee. The Ld. DR filed the copy of the order sheet to show that Assessing Officer asked for explanation of the assessee on 24.12.2008 as to how the amount of Rs. 45 lakhs have been accounted for in the return of income. The Ld. Counsel for the assessee, however, submitted that in the original return of income field on 3.9.2007, the assessee individual could not show the surrender of Rs. 45 lakhs but advance tax of Rs. 15 lakhs paid on surrendered amount of Rs. 45 lakhs has been disclosed in the computation of income filed with the original return of income. The Ld. Counsel for the assessee also pointed out as per the order sheet dated 24.12.2008, pointed out by Ld. DR the assessee has filed cash flow chart and balance sheet on 16.12.2008 before Assessing Officer wherein the surrendered income had been reflected and the copy of the same is filed at pages 6 & 7 of the paper book. It would, therefore, show that prior to the order sheet dated 24.12.2008, the Assessing Officer did not raised any query on this issue and prior to that the assessee had already declared and disclosed that Rs. 45 lakhs had already been disclosed to the Revenue Department is also accounted for in the cash flow statement (capital account) and the balance sheet. The assessee, therefore, disclosed all the particulars of the surrender of amount as well at the stage of the assessment. The assessee on realizing the mistake has immediatel y filed the revised return on 26.12.2008 including the surrender amount of Rs. 45 lakhs in the return of income. Such was an inadvertent mistake on the part of the assessee because the fact of the surrender of Rs. 45 lakhs was already disclosed before the Assessing Officer prior to the assessment as well as the assessment stage before the Assessing Officer detects any mistake. Revised return filed by the assessee u/s 139(5) was also valid return of income field in accordance with law. Thus, it is not a case of detection of anything by the Assessing Officer prior to filing of the revised return by the assessee. The Assessing Officer was having all facts and information on record of surrender of Rs. 45 lakhs and payment of tax on the same before filing the original return of income. 9.1 The Hon'ble Madras High Court in the case of CIT v. S.I. Paripushpam [2001] 249 ITR 550 (Mad.) held that 'there was no evidence on the basis of which the Department could contend that the assessee had fraudulently or willfully or negligently concealed the income. The assessee's agreeing to the addition of the amount by itself did not establish fraud or willful neglect without something more. Hence the Tribunal was justified in cancelling the penalty levied under section 271(1)(c) of the Income-tax, 1961.' 9.2 The Hon'ble Gujarat High Court in the case of C IT v. Union Electric Corporation [2006]281 ITR 266 (Guj.) held that 'penalty was imposed on the assessee in the assessment year 1981-82. The Tribunal after hearing the parties came to the conclusion that the debt entry was a solitary instance in which the cost of wires was shown as "consumable stores" and the assessee failed to recover the same from the sister concern. The assessee had come forward with a request to disallow the same on account of apparent mistake and the request was made by the assessee during the course of assessment proceedings before the Assessing Officer had detected this fact. The tribunal, therefore, held that the bona fides of the assessee were evident and in such case imposition of penalty was not warranted. On a reference: