2002 (1) TMI 13

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....he respondent-assessee. The instant application has been made under section 256(2) of the Income tax Act, 1961, seeking following reference for our opinion arising from the order of the Tribunal dated June 12, 1996: "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is legally justified in confirming the order of the Commissioner of Income-tax (App....

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.... of Rs. 1,13,000. On appeal, the Commissioner of Income-tax (Appeals) found substance in the explanation given by the assessee to the effect that he was not in a position to pay the self-assessment tax. Considering the material on record, the Commissioner of Income-tax (Appeals) deleted the penalty. On an appeal by the Revenue, the Tribunal after elaborate discussion, confirmed the finding of ....

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....being heard." On reading of sub-section (3) of section 140A it clearly appears that the discretion of imposing penalty is vested in the assessing authority. The word used "may" is significant. It gives discretion to the assessing authority to inflict or not to inflict penalty, considering the facts and circumstances of the case. The order of the Tribunal is based on the judgment of the Division ....