Since facts of both these appeals are identical and same, these were heared together and are disposed of by this consolidated order for sake of convenience. First appeal is in respect of levy of penalty in sum of Rs. 712 for late filing of return whereas second is in respect of levy of penalty for concealment under s. 271(1)(c) in sum of Rs. 1,378, both having been confirmed by AAC. assessee is teacher and assessment year involved in 1978-79. During year under consideration, he had gifted sum of Rs. 10,000 to hi aunt (father s sister) which, though subjected to gift-tax, Revenue did not accept origin and initiated proceedings for Income-tax assessment. From date when assessee was obliged to file return under s. 139(1), it was away by 26 months and for addition of Rs. 10,000, which was not only made by ITO and also sustained by AAC, ITO felt that not only return was late but it was case of concealment and he initiated proceedings for both and levied penalty of Rs. 712 for late filing of return and Rs. 1,378 for concealment. When is came before AAC, he confirmed both. ld. counsel for assessee Mr. D.S. Gupta submitted that it is case where there is no explanation or at most rejection of explanation and, therefore, no penalty was warranted. About late filing return, he over and again submitted that nothing be ker case of bona fide belief than one because assessee genuinely gave gift of Rs. 10,000 and could not be u n d e r impression that he is liable to tax. Regarding concealment, he submitted that explanation, if read with proviso given thereunder, is also taken into consideration, it no more survives to be case for levy of penalty for concealment. ld. Departmental Representative Mr. C.L. Jain, on other hand, relied on orders of two lower authorities and submitted both penalties are in order specially so in light of explanation inserted w.e.f. 1st April, 1976. Penalty for concealment and also for late filing of return, deserve to be sustained. After taking into consideration rival submissions and looking to facts that at most assessee was unable to explain source of Rs. 10,000, it cannot be said that it was case of concealment, so far as concealment penalty is concerned. Perusal of orders of two lower authorities in respect of both penalties, are mainly based on fact that assessee pocketed addition of Rs. 10,000 after stage of AAC whereas his first appeal was dismissed. Explanation with proviso made thereunder is available in order of ITO and we don t reproduce same here again. So far late filing of return is concerned, we are with ld. counsel for assessee on plea that it was case of bona fide belief as assessee could not think of filing return simply because he had gifted sum of Rs. 10,000 to some one. Regarding concealment, again it is, at most, matter in respect of which assessee has no explanation, or, in other words, explanation which has been rejected because assessee s contention was that it was out of cash lying at home out of his savings that he made gift. In quantum proceedings, assessee lost matter on many reason such as he has not given gift to his real sister, i.e., assessee aunt, to whom assessee had given gift etc. All these possibilities and question s posed by Revenue, cannot be enough for sustenance of penalty either for late filing of return or for concealment. Once we look to explanation, which finds place in ITO s order of penalty for concealment and also go through proviso given thereunder, we find that proviso takes assessee out of mischief, of explanation and assessee, therefore, should not have been visited by concealment penalty as well. Both penalties, are, therefore, cancelled. In result, both appeals are allowed. *** SUDESH KUMAR GOEL v. INCOME TAX OFFICER