This appeal by assessee relates to assessment year 1997-98 and i s directed against levy of penalty of Rs. 11,10,500A imposed on it under section 271(1)(c) of Income-tax Act. 2. assessee is company. During year ended 31-3-1997, it received Rs. 25,23,500 from 15 persons as share application money. In assessment made under section 144 on 28-3-2003, amount was added as unexplained cash credit under section 68 of Act on ground that genuineness of transactions was not proved and assessee did not render any evidence in support of receipt of share application money. assessee carried matter in appeal before CIT (Appeals) but without any success and further appeal to Tribunal was also dismissed by order dated 23-2-2005 in ITA No. 1670/Delhi/2004. 3. After order of Tribunal, Assessing Officer issued notice under section 274 read with section 271(1)(c) calling upon assessee to explain why penalty could not be levied for concealment of income in respect of cash credit added under section 68. assessee objected on ground that Assessing Officer did not record any satisfaction in assessment order to effect that assessee concealed its income or furnished inaccurate particulars thereof and that further opportunity should be given to enable assessee to submit its explanation. In further opportunity given to assessee, it was pleaded that penalty proceedings be kept in abeyance since assessee had filed appeal to Honble Delhi High Court under section 260A against order of Tribunal. Assessing Officer overruled assessees objection and held that cash credits were non-genuine and by making claim that they were genuine assessee had concealed its income as also furnished inaccurate particulars thereof. He accordingly imposed minimum penalty under section 271(1)(c) which was confirmed by CIT (Appeals), Hence present appeal. 4. first contention raised before us on behalf of assessee was that Assessing Officer has not recorded any satisfaction in assessment order to effect that assessee concealed its income or furnished inaccurate particulars thereof and penalty is, therefore, invalid on this ground alone. On merits, it has been contended that at best it could be case of assessees inability to prove share application monies in manner required by department and that departmental authorities have ignored vital evidence which assessee adduced before CIT (Appeals) in appeal against assessment order. It was submitted that findings in assessment proceedings are not conclusive for purpose of levying penalty for concealment and in penalty proceedings, there has to be reappraisal of entire evidence afresh in order to determine guilt of assessee. It was contended that evidence adduced before CIT (Appeals) which had also been sent to Assessing Officer was completely not taken into account by Assessing Officer while levying penalty which is contrary to well established principles. Our attention in this connection is drawn to entire evidence compiled in paper book. It was contended finally that impugned orders suffer from infirmity of non-application of mind. It was, therefore, pleaded that penalty should be cancelled. 5. Mr. Pandey, learned CIT DR contended that reaching of satisfaction under section 271 was administrative action in which form is not important and only substance matters and if assessment order is read as whole without giving undue importance only to operative part thereof it would be clear that Assessing Officer can be said to have reached t h e requisite satisfaction. On merits, he submitted that assessee never produced details in support of share application monies before income-tax authorities and its conduct was thus contumacious for which penalty w s imposable. He pointed out that addition has been confirmed by Tribunal which is k point in support of levy of penalty. He further pointed out that evidence adduced by assessee in support of receipt of share application monies does not stand test of normal course of human conduct and probabilities and assessee was trying to pass off its own monies in guise of share application monies from agriculturists who did not have wherewithal to find such resources. He, therefore, pleaded that penalty was rightly imposed and should be sustained. 6. On careful consideration of facts and rival contentions, we are of view that penalty is not justified. On question of satisfaction, we are inclined to accept submissions of learned counsel for assessee. Though Assessing Officer would appear to have reached satisfaction that "alleged share holders are fictitious identities or men of straw as held by Kerala High Court who had been created by company in order to substantiate investment made in share application money" in his letter dated 7-3-2003 addressed to assessee and referred to in paragraph 5.6 of assessment order, in operative portion of assessment order, Assessing Officer appear to have climbed down from that position and was less sure of his satisfaction, which is clear from his observation in paragraph 58(b) of assessment order that "Under above circumstances, genuineness of transactions are doubtful". He has further added that "genuineness of transactions were not proved", These observations are ambiguous and if seems to us that though Assessing Officer started with premise that share application monies were fictitious, ultimately he merely stated that genuineness of transactions was doubtful or was not proved. There is difference between two sets of expressions, namely, "fictitious" on one hand and "doubtful" and "not proved" on other hand. Thus, while concluding his reasoning and making addition Assessing Officer would appear to have abandoned his earlier view that monies were received from fictitious persons and seems to have settled for less k expressions. It is, therefore, somewhat difficult to assert that Assessing Officer did reach satisfaction in course of assessment proceedings that assessee concealed its income or furnished inaccurate particulars thereof. last line in assessment order to effect that penalty proceedings under section 271(1)(c) have been initiated separately does not also amount to recording of requisite satisfaction. In our opinion, case falls within ratio of judgments of Honble Delhi High Court in CIT v. Ram Commercial Enterprises Ltd. [2000] 246 ITR 568. We accordingly cancel penalty on this ground. 7. Even on merits, we are satisfied that it cannot be said that assessee concealed its income or furnished inaccurate particulars thereof. Though assessee did not comply with all directions of Assessing Officer in course of assessment proceedings and could produce only five or six share applicants before Assessing Officer, all confirmations, addresses, evidence to prove identity, certificates from chartered accountants, evidence of allotment of shares, etc. in respect of all applicants were adduced before CIT (Appeals) who admitted same and sent them to Assessing Officer for remand report. In his remand report dated 23-12-2003, Assessing Officer stated that no comments can be offered at this stage without necessary verification CIT (Appeals) and Tribunal had confirmed additions but perusal of para 15 of order of Tribunal shows that this aspect of matter, namely, that assessee adduced all evidence in support of share application monies before CIT (Appeals) and he had admitted them and sent to Assessing Officer for remand report does not appear to have been highlighted. If is well settled that findings rendered in assessment proceedings though they constitute good evidence do not constitute conclusive evidence in penalty proceedings. During penalty proceedings, there has to be reappraisal of very same material on basis of which addition was made and if further material is adduced by assessee in course of penalty proceedings, it is all more necessary that such further material should also be examined in attempt to ascertain whether assessee concealed his income or furnished inaccurate particulars thereof. In present case, evidence adduced before CIT (Appeals) in appeal against assessment order has not been examined by Assessing Officer or CIT (Appeals) while dealing with penalty proceedings against assessee for concealment of income. If this evidence is taken into account it would appeal1 that it cannot be asserted that receipt of share application monies is totally unsupported. We find that assessee had filed confirmation from all share applicants, proof of share allotment to them, evidence for proving their identity, certificates from chartered accountants showing distinctive numbers of shares allotted to applicants, etc. These ought to have been considered by departmental authorities while dealing with penalty proceedings for concealment of income. They have, however, omitted to do so, They have merely relied on findings in assessment proceedings without independently examining evidence adduced by assessee in course of assessment proceedings both before Assessing Officer as well as CIT (Appeals). Their orders thus suffer from basic infirmity, Explanation 1 to section 271(1)(c) is also not attracted since assessee has adduced whatever evidence was in its possession which has not been found to be false unsubstantiated. All that, can be said is that income-tax authorities were not satisfied with such evidence. That does not amount to proof that assessee concealed its income or furnished inaccurate particulars thereof. We accordingly accept submissions made on behalf of assessee and cancel penalty imposed on it. appeal is allowed with no order as to costs. *** Vijay Power Generators Ltd. v. Income-tax Officer, Ward 17(3), New Delhi