K.C. SRIVASTAVA, A.M. This is Departmental appeal against order of AAC cancelling penalty imposed under s. 18(1)(c) of WT Act. penalty had been imposed by WTO on ground that assessee had not disclosed her investment w i t h M/s Bhatia Brothers to extent of Rs. 25,000. After original assessment had been mad, WTO made reassessment and it is stated that proceedings were opened under s.17 of WT Act. WTO held that wealth to extent of Rs.25,000 having been concealed, penalty under s.18(1)(c) was leviable. Before AAC it was pointed that assessee filed another return on 31st July, 1980 after original assessment had been completed and in this return investment of Rs.25,000 with M/s Bhatia Brothers had been disclosed. It was contended before AAC that assessee voluntarily disclosed this wealth without Department issuing notice. It was also contended that W T O did not actually issue any notice under s.17 and therefore, reassessment proceedings were illegal. It was also pointed out that show cause notice under s. 18(1)(c) was not served on appellant before imposing penalty. It was also brought to notice of AAC that assessee was old widow of 75 years and there could be no intention to conceal as tax involved was only Rs.250. AAC made enquiries in matter and found that there was no notice under s. 17 on record and there was no mention of issue of this notice either on order-sheet or anywhere else. WTO only referred to assessment order where mention of s. 17 had been made. WTO had also stated before AAC that in view of provisions of s. 42(c) of IT Act, this error should be ignored and proceedings should be upheld to be valid. AAC however, finding no note or notice on record held that there was no evidence to show that notice under s. 17 was actually served or issued to assessee to regularise proceedings. AAC also gave finding that assessee herself came forward to disclose this asset and it was not detected by WTO. Considering all these facts AAC held that this was not fit case for imposing penalty and thus he allowed assessee's appeal. We have heard ld. departmental Representative and we have also perused relevant records. We find that there is no noting on file to indicate that notice under s. 17 had actually been issued. There is also no notice under s.17 on record. It is open to assessee to challenge validity of assessment in penalty proceedings and after it is found that assessment itself was not valid in law, penalty can be cancelled. As there is nothing before us to rebut finding of ld. AAC that proceedings had not been regularised by issue of notice under s.17, we uphold his inference that assessment made was not in accordance with law. In such circumstances question of imposing penalty under s. 18(1)(c) could not arise. AAC has also given finding that assessee has disclosed wealth without it being detected by Department. It is true that if there is concealment in original return, assessee cannot plead that penalty should not be imposed for concealment only because asset is shown in another return. However, having regard to facts and circumstances of this case, we uphold order of AAC cancelling penalty is upheld. appeal is dismissed. *** WEALTH-TAX OFFICER v. SMT.AGYA KAUR