Held that  the quantum appeal challenging the addition on the basis of which penalty proceedings under section 271(1)(c) of the Act had been initiated was still pending before the Commissioner (Appeals). When quantum appeal against the assessment order making addition on account of disallowance is still pending before the Commissioner (Appeals), the penalty proceedings were not sustainable. The order passed by the Commissioner (Appeals) is   set aside and the Assessing Officer granted liberty to proceed in accordance with law after the decision of the quantum appeal pending before the Commissioner (Appeals). (AY.2006-07)