2001 (9) TMI 23

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nted a contract amounting to Rs.88,92,248 from MACT College, Bhopal. Out of this, the assessee had sub-contracted the work of Rs.39,36,075 to Zenith Engineers, Bhopal, on two per cent. profit and the remaining work was completed by Guliani Construction Company, in which the assessee is a partner. The Assessing Officer found that the total contract amount received by the assessee was more than Rs.40 lakhs, as such he should have filed a return along with the audit report under section 44AB of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). Penalty proceedings were initiated under section 271B. A notice under section 271B was issued on December 20, 1991. The Income-tax Officer passed an order under section 271B of the Act to ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... furnish a report of such audit as required under section 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent. of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less." A reading of the aforesaid provision makes it clear that the imposition of penalty is not mandatory. The word used is "may". A discretion is conferred on the authority to impose penalty or not to impose it. That the provision with respect to imposition of penalty is not mandatory, is further fortified by the statutory provision contained in section 273B ....