Petitioner had declared 101442.5 gms. of gold under VDI Scheme, 1997. During search operation in petitioner’s son’s residence, 2034.1 gms. of gold found was claimed to be out of 101442.5 gms. declared by petitioner in Assessing Officer imposed penalty under section 271(1)(c). Commissioner (Appeals) deleted penalty holding that Gold jewellery was received by assessee during her marriage could not be ruled out and, therefore, no concealment was established beyond doubt.  Tribunal being of view that assessee had not discharged her burden of explaining source with plausible evidence confirmed penalty levied by Assessing Officer.  High Court held that one more opportunity could be given to assessee to go before Assessing Officer to re-do reconciliation by affording an explanation.The Assessing Officer passed a consequential order deleting penalty. PCIT   initiated proceedings under section 263 to impose penalty. The assessee filed  writ petition and  submitted that there was a merger of order passed by Asstt. Commissioner AO and, therefore, there was no scope for invoking section 263 to revise assessment.  High Court merely gave a fresh opportunity to assessee to explain case afresh. Assessing Officer had passed a consequential order stating that case does not attract penalty since additional income towards investment in jewellery was offered only to purchase peace with department. Since there was no merger of order of AO with CIT(A), no case was made out for interfering with order passed by PCIT, petition is dismissed. (SJ) (AY. 2012-13)