The AO reopened the case of the Assessee u/s 147 of the Act on the basis of information received from the Investigation Wing that the assessee had made transactions in penny stock scrips of T during the previous year. In response, the assessee filed his ROI declaring an additional income on account of income earned on transfer of shares of T. The AO passed a reassessment order accepting the ROI without any variation. He further initiated penalty u/s 271(1)(c) of the Act in view of the fact that had the proceedings u/s 147 of the Act not been initiated, the assessee would not have offered the correct income for taxation and levied penalty at 100% of the tax sought to be evaded. The CIT(A) upheld the order of the AO. The ITAT observed that the ROI filed by the Assessee, in response to S. 148 notice, included the income earned from transfer of shares of T. This ROI was accepted by the AO without any variation and hence, the AO was directed to delete the entire penalty u/s 271(1)(c). (AY.2012-13)