The Tribunal held that penalty had been levied by the Assessing Officer on the basis of two disallowances made by the Assessing Officer. The Tribunal had deleted the disallowance under section 10AA of the Act. Merely, because the point had been agitated before the High Court, penalty could not be levied. As on date the addition did not stand and the penalty to that extent had been correctly deleted by the Commissioner (Appeals). With respect to disallowance of loss on option premium allocated to the special economic zone unit the Tribunal had remanded the matter to the Assessing Officer. If in the set-aside proceedings, the Assessing Officer was satisfied that there was concealment of income or furnishing of inaccurate particulars of income, he had the power to initiate penalty proceedings. However, at the present stage, there was no infirmity in the order of the Commissioner (Appeals) deleting the penalty under section 271(1)(c) of the Act. (AY. 2011-12)