These three appeals have been filed by Revenue for asst. yrs. 1980-81 to 1982-83 against common order of AAC cancelling penalties levied under s. 271(1)(c) of IT Act. facts leading to above appeals are that assessee did not file any return for asst. yrs. 1980-81 to 1982-83. premises of assessee were searched by Department under s. 132 of IT Act on 26th Feb., 1982. Thereafter, settlement was arrived at between assessee and CIT on 4th Aug., 1982 and assessee agreed to be assessed on income of Rs. 81,000 for two years i.e. for asst. yrs. 1980-81 and 1981-82 and at Rs. 19,000 for asst. yr. 1982-83. Accordingly, assessee filed returns for three years on 12th Aug., 1982 showing above income. above returns were accepted by ITO. ITO also initiated proceeding under s. 271(1)(c) of IT Act and levied penalties at rates of 50 per cent of tax sought to be evaded and computed amounts of penalties imposable at Rs. 17,250, Rs. 15,813 and Rs. 660 respectively in three years under appeal. These penalties, according to ITO, were levied as per directions given by CIT vide his order No. BC.X/471/SP/1982-83 dt. 4th Aug., 1982 under s. 273A of IT Act. base given for imposing penalty for asst. yr. 1980-81 was as follows: "Since assessee has not filed any return voluntarily before detecting concealment entire amount assessed for this year i.e. Rs. 81,000 has been taken as concealment and penalty under s. 271(1)(c) at 50 per cent as per CIT's order has been levied on it." Similar orders were passed in other two years. On appeal, AAC cancelled above penalties as according to her, there was no concealment of income in returns filed by assessee. Revenue has challenged above orders cancelling penalties before us. Shri S.K. Srivastava, ld. Departmental Representative pleaded that penalties were imposed on basis of agreement arrived at between assessee and Department consequent to which, directions referred to by ITO were issued by Commissioner under 273A of IT Act directing ITO to levy penalties at 50 per cent of tax sought to be evaded. Thus order passed by ITO should be read not only as orders passed under s. 271(1)(c) o f IT Act but also as perused under s. 73A of IT Act. orders under s. 273A in view of sub-s. (5) of above section are final and could not be called in question by any Court. Thus, according to Departmental Representative, assessee had no right to challenge above penalties and AAC had no jurisdiction to entertain appeals much less cancel penalties imposed by ITO. assessee, according to Departmental Representatives, was estopped by his Act and conduct from challenging orders levying agreed penalties. ld. Departmental Representatives also argued that assessee would not have filed returns showing agreed income if raid had not taken place on its premises and that income reflected in books of account was much less than what was later on shown on agreed basis. Thus on Act and conduct of assessee, levy of penalties was justified. Shri V.H. Patil, on behalf of assessee argued that assessee never agreed to levy of penalty under s. 271(1)(c) of IT Act for three years under appeal. There were no returns when agreement was arrived at with CIT on 4th Aug., 1982 and, therefore, question of any concealment of income or furnishing of any inaccurate particulars of income was not there when settlement was arrived at. Consequently, CIT gave no directions under 273A in his order dt. 4th Aug., 1982 to impose penalties under s. 271(1)(c) of IT Act for three years under appeal. ld. Counsel for assessee also pointed out that under s. 273A Commissioner is given direction to waive penalties and interest which are imposable chargeable under other provisions of IT Act and no penalty can be levied under s. 273A of IT Act. assessee had statutory right to challenge order of ITO levying penalty under s. 271(1)(c) of IT Act and there can be no estoppel against statute. Shri Patil concluded his argument by saying that when no returns were filed upto 4th Aug., 1982, when settlement was arrived at with CIT, question of concealing any income or furnishing any particulars of income did not arise and returns filed by assessee having been accepted by Department, no penalty under s. 271(1)(c) was imposable and penalties imposed by ITO were rightly cancelled by AAC. We have carefully considered rival contentions of parties. We agree with submissions made on behalf of assessee and find no force in arguments advanced by ld. Departmental Representatives. Departmental Representatives had conceded that Expln. 3 to s. 271(1) was not applicable in this case. It is also not in dispute that returns for three years under appeal were filed by assessee only on 12th Aug., 19982 and income shown in those returns were accepted by ITO. Now, when no concealment have been detected in returns submitted by assessee, question of imposing penalties under s. 271(1)(c) of IT Act does not arise and AAC was right in cancelling penalties levied by ITO. We also find force in submission of Shri Patil that assessee agreed to levy of penalty at 50 per cent of tax sought to be evaded for asst. yr. 1978-79 for which return stood filed by assessee prior to date of settlement and not for three years under appeal. This is emply clear from figures of total liabilities of tax and penalties mentioned in statement considered by CIT before arriving at settlement with assessee. In working of tax, interest and penalties payable by assessee, penalties imposable only for asst. yr. 1978-79 under s. 271(1)(c) was taken into consideration. Total figure inclusive of penalty imposable for asst. yr. 1978-79 under s. 271(1)(c) worked out to Rs. 6,39,886 for which assessee sought relief from Commissioner under s. 273A of IT Act. In para 6 of his directions under s. 273A(4) of IT Act 4th Aug., 1982 CIT has stated that if all penalties and penal interest leviable in case of both firms and partners are levied, total tax effects will be Rs. 6,40,000 in round figures. CIT has also mentioned that it was beyond capacity of assessee to pay tax and penalties amounting to Rs. 6,40,000. He, therefore, allowed certain reliefs to assessee under s. 273A of IT Act. From above document, it is abundantly clear that CIT had issued directions to levy penalty at 50 per cent of tax sought to be evaded under s. 271(1)(c) of IT Act only for asst. yr. 1978-79 and not for three years under appeal. At any rate, when no concealment of income or furnishing of inaccurate particulars of income have been detected, question of imposing penalty under s. 271(1)(c) of IT Act could not arise. Sub-s. (5) of s. 273(a) of IT Act has no application in this case. We also agree with Shri Patil that there can be no estoppel against statute and assessee had statutory right to challenge orders levying penalties on assessee under s. 271(1)(c) of IT Act. For above reasons, we find no merit in these appeals of Revenue and hold that AAC was right in cancelling penalties imposed by ITO. In result these appeals are dismissed. *** SEVENTH INCOME TAX OFFICER v. NEESHA PLAST INDUSTRIES