JUDGMENT 1. The revenue has preferred this appeal challenging the order passed by the Tribunal which has set aside the penalty imposed by the Assessing Officer under section 271 (1) (c) of the Income Tax Act, 1961 ('the Act'). The assessee is a wholesale dealer in silk sarees. He had not. filed any returns. A survey was conducted in the premises of the assessee. During such survey they found that the assessee had been operating a bank account No. 1732 in Amanath Cooperative Bank, H. Siddaiah Road, Bangalore, in the name and style of M/s Chintamani Sarees. The assessee was also carrying on business under the name and style of M/s Hind Saree Collection. Both are proprietary concerns of the assessee. The said bank accounts and the amounts deposited in the said bank did not find a place in the regular books of account. However, after the said survey the assessee filed a return of income for the assessment year 2000-01 on 25.10.2000 declaring a total income of Rs.18,25,180/-. 2. The assessing authority took up the case for scrutiny/assessment under Section 143(3) of the Act. The assessee had claimed expenses at. 2%. However, the assessing authority reduced to 1.5%. Consequently the total assessed income became Rs.19.89,820/- as against the income declared by the assessee in a sum of Rs.18,25,180/-. The assessee accepted the order of assessment and paid taxes. It is thereafter proceedings were initiated under Section 271(1)(c) of the Act for recovery of penalty. The assessing authority held but for the DDIT (Inv) noticing the assessee maintaining a concealed bank account the assessee would not have come forward to pay the additional tax. Therefore, the assessee has clearly contravened the provisions of the Act attracting penalty leviable under Section 271(1)(c) of the Act. He levied penalty in a sum of Rs.5,87,512/-. 3. Aggrieved by the same the assessee preferred an appeal to the Commissioner of Income Tax (Appeals) who confirmed the said order and dismissed the appeal. Against the said order the assessee preferred an appeal to the Tribunal. The Tribunal held that it is a well established principle that concealment penalty cannot be levied on the disallowance of expenses made on estimate basis. Hence, it held the conditions stipulated under Section 271 (1) (c) are not fulfilled in the instant case and therefore the appeal was allowed, the orders were set aside. The Tribunal held that it is a well established principle that concealment penalty cannot be levied on the disallowance of expenses made on estimate basis. Hence, it held the conditions stipulated under Section 271 (1) (c) are not fulfilled in the instant case and therefore the appeal was allowed, the orders were set aside. Aggrieved by the said order the revenue is in appeal. 4. This appeal was admitted on 5.3.2007 to consider the following substantial questions of law : - (1) Whether the Tribunal was correct in holding that no penalty under Section 271(1)(c) of the Act can be levied despite the fact that the assessee came forward to file a return only after a survey disclosing a sum of Rs.16,15,702/- and on scrutiny it was found that the assessee had claimed an expenses of Rs.5,87,512/-which was not in a position to substantiate and consequently penalty had been correctly levied? (2) Whether the Tribunal was correct in holding that no penalty can be levied if the return of income is filed within time and expenses claimed by the assessee are disallowed in the course of regular assessment? 5. Section 271(1)(c) provides that, if the Assessing Officer in the course of any proceedings under this Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty. In addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times the amount of tax sought to be evaded by reason of the concealment of particulars of his income. In the instant case the return is filed after the survey. In the return filed the assessee has declared a total income of Rs.18,25,180/- for the assessment year 2000-01 on 25.10.2000 within the time prescribed under law. The return filed was taken up for scrutiny under Section 143(3) of the Act. As is clear from the order of the assessing authority nowhere it is stated whether any income has been concealed by the assessee which is brought to tax. Similarly it is nobody's case that the assessee has furnished inaccurate particulars. The order discloses the assessee had claimed 2% expenses. However, the assessing authority has accepted 1.5% as the expenses on the estimated turnover. Similarly it is nobody's case that the assessee has furnished inaccurate particulars. The order discloses the assessee had claimed 2% expenses. However, the assessing authority has accepted 1.5% as the expenses on the estimated turnover. It is because of this reduction in the percentage of expenses the total income has gone up to Rs.19,89,820/-. In other words it is nobody's case that in the return filed by the assessee that he has concealed income or that the particulars furnished in the income are inaccurate. It is because of the disallowance of the expenditure the total amount representing total income is enhanced to the extent of disallowance. Therefore, the conditions which are to be fulfilled before section 271(1)(c) is attracted do not exist. Therefore, the Tribunal was right in holding that there is no concealed income which attracts the provision of penalty. As the question whether the income was concealed or not is purely a question of fact and the Tribunal has recorded a finding that there is no concealment of income, in our view no substantial question of law do arise for consideration. Even otherwise, the substantial questions of law which are framed at the time of admission are answered in favour of the assessee and against the revenue. Accordingly, the appeal is dismissed.