Taxpayer Avoids Penalty for Voluntary Disclosure of Income Before Reassessment; ITAT Cites Good Faith Effort.

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....The ITAT held that penalty u/s 271(1)(c) was not imposable on the assessee. The assessee had voluntarily paid tax on income from sale of shares three years prior to initiation of reassessment proceedings, establishing bona fides under Explanation 1(B) to Section 271(1)(c). Alternatively, since the income was included in the return filed in compliance with notice u/s 148 and accepted by the AO without any addition/disallowance, no penalty could be imposed in absence of any amount added/disallowed to attract the deeming provisions of Explanations 1 and 4 to Section 271(1)(c). The ITAT relied on precedents holding that penalty u/s 271(1)(c) cannot be imposed where the income is voluntarily disclosed in the return and accepted by the AO without any concealment.....