This appeal of assessee for asst. yr. 2003-04 is directed against order of learned CIT(A) dt. 4th Dec., 2006, which emanates from penalty order dt. 25th July, 2006 under s. 271(1)(c) of IT Act, 1961. facts leading to this appeal are that assessee filed return of income on 17th Oct., 2003 and assessment was passed on 25th Jan., 2006. assessee is proprietor of M/s Jyoti Studio and is engaged in studio photography, outdoor photography, video cassettes, album, etc. survey under s. 133A was conducted and during this survey assessee surrendered total amount of Rs. 1,09,859 (Rs. 93,126 on account of excess stock and Rs. 16,733 on account of excess cash). assessee also claimed long-term capital loss of Rs. 89,210 on account of sale of residential house situated at Bhopalpura, Udaipur. surrendered amount was not shown by assessee in his return of income. A O also queried about value of house sold during year. Therefore, assessee revised his original return of income by incorporating amount of R s . 1,09,859 and also declared capital gains of Rs. 1,32,967 as per provisions of s. 50C of Act. Assessment order was completed on 25th Jan., 2006 at total income of Rs. 4,12,120 including capital gain of Rs. 1,32,967 and AO also initiated penalty proceedings under s. 271(1)(c) for concealment of taxable income and for furnishing inaccurate particulars of income. After show causing and hearing assessee, learned AO levied penalty of Rs. 1 lakh on total income, according to AO, concealed at Rs. 3,33,036. This penalty was confirmed by learned CIT(A) vide order dt. 25th July, 2006. assessee has raised this second appeal. I have heard both sides and have also perused relevant material on record. It has been contended by learned Authorised Representative Sh. N.R. Meratia that impugned additions, on basis of which penalty under s. 271(1)(c) has been levied were made on estimate basis, and when additions are based alone on estimation, no such penalty can be levied. It has also been argued that s. 50C came into operation only w.e.f. 1st April, 2003 and was applicable to asst. yr. 2004-05, whereas assessment order (sic-year) under consideration is 2003-04 only. Even otherwise it was recent change and assessee had disclosed all relevant facts, is other argument of learned Authorised Representative. As far as statement of assessee is concerned, it has been submitted that it does not have any legal force as it has not been properly recorded. It is not clear as to who recorded this statement. On other hand, case of Department is that all relevant additions which are based on surrender, are result of query made by AO and cannot be taken as voluntary disclosure by way of revised return, which was non est in eyes of law having not been filed within permitted time. According to learned Departmental Representative assessee has furnished inaccurate particulars of income and thus penalty under s. 271(1)(c) is exigible. I have cogitated entire material available on record in light of rival submissions. well settled principle of law is that parameters for levy of penalty and for making quantum additions operate in separate and distinct spheres. It is also trite law that penalty is not exigible only on account of estimated additions. Undoubtedly, assessee did not file appeal against impugned quantum additions. Before levying penalty under s. 271(1)(c) of Act either concealment of taxable income or furnishing of inaccurate particulars of income has to be established to hilt by learned AO, failing which case for levy of penalty would not be made out. use of word may in s. 271(1)(c), admits, reasonable cause and sufficient reasons to exonerate defaulter from levy of this penalty. concerned AO has to visualize entire sequence of facts before coming to conclusion that case of penalty is made out. If and only if AO can conclude that assessee has knowingly and/or verily concealed income either directly by furnishing inaccurate particulars of income, penalty under s. 271(1)(c) can be levied. AO has to examine minutest nuisances of facts and figures of given case. There cannot be straightjacket formula to fit in assessee for such penalty. It depends upon facts of particular case. whole hog of facts and circumstances including nature of business, explanation of assessee, manner of addition and other host of factors, have to be taken into consideration. AO is not obliged to impose penalty, automatically, in each case of such defaults. Discretion given to him has to be exercised judiciously. Yes, in cases where return is revised as result of detection by Department, revised return cannot be treated as voluntary but still ingredients of addition do admit sufficient and plausible reasons to extenuate default. It depends on facts and circumstances of given case whether penalty can be levied or not. In given case learned CIT(A) has simply mentioned that assessee has revised return after constant legal pursuit by way of issuing show-cause notices, penalty levied by AO is to be confirmed. But, I beg to differ from above finding because learned CIT(A) has not at all considered written submissions of assessee even after incorporating same, verbatim, in order. assessee is doing photography service and was oblivious of surrender made during survey. Immediately after query was made in this regard, he filed revised return and did not contest quantum addition as well. assessee first obtained copy of his statement made during survey and then without loss of time revised his return of income. He got copy of statement on 26th July, 2004 and filed revised return on 14th Dec., 2004. AO did not take cognizance of revised return as original return was also delayed because it was not filed within time prescribed under s. 139(1). However, AO considered income shown in revised return for assessment purposes. assessee surrendered income of Rs. 1,09,859 on account of stock and cash and Rs. 1,32,967 on account of long-term capital gains under s. 50C of Act and paid taxes accordingly. It has been brought to my notice that alleged statement of assessee is not signed by anyone from side of Department, which according to Authorised Representative cannot be taken into account at least for purpose of penalty proceedings. Reliance has been placed on decision of this Bench given in case of Mangilal vs. ITO in ITA No. 40/Jd/2003 (asst. yr. 2000-01) order dt. 13th Oct., 2006, wherein it has been held that when statement is not signed by any authorized officer to declare that statement was read over and accepted as correct (in short RO & AC ), it does not have any evidentiary value. learned Authorised Representative has also placed reliance on decision of Hon ble Supreme Court given in case of CIT vs. Suresh Chandra Mittal (2001) 170 CTR (SC) 182: (2001) 251 ITR 9 (SC) wherein it has been held that concealment cannot be inferred, ipso facto, from surrender or addition but it has to be proved by Department. For non- filing of appeal against surrendered income reliance has been placed on decision of Narender Kumar vs. ITO (2005) 94 TTJ (Jd) 156. For making wrong claim which is subsequently withdrawn, reliance has been placed on decision of this Bench given in case of Devi Dass Sukhani vs. ITO (2006) 101 TTJ (Jd) 551. Insofar as estimated addition is concerned, in my view, law is settled that no penalty under s. 271(1)(c) can be levied. Sec. 50C was introduced w.e.f. 1st April, 2003 and was new section which was applicable from asst. yr. 2003-04 only and this being very first year, in such circumstances, default of assessee to declare long-term capital gains cannot lead to levy of such penalty. cumulative effect of all above facts makes out just and sufficient cause for absolving assessee from visiting such penalty. Accordingly, I set aside order of learned CIT(A) and order to cancel/delete impugned penalty of Rs. 1 lakh. In result, appeal of assessee is allowed. *** PRAKASH CHAND NAHAR v. INCOME TAX OFFICER