1996 (4) TMI 111

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.... of the Revenue. The solitary question referred to this court for its opinion is : " Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in cancelling the order levying penalty under section 140A(3) ? " The material facts are as follows : The assessee, which is a firm, filed returns of income for the assessment years 1973-74 and 1974-75 on August 14, 1....

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....te Tribunal considered the submission of the assessee and relying on documents produced by it, cancelled the order of penalty. The Tribunal, however, allowed the request of the Department to refer the aforementioned question of law to this court for its opinion. Section 140A(1) of the Income-tax Act provides, inter alia, that where any tax is payable on the basis of any return required to be fu....

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....rticulars of his income or furnished any inaccurate particulars of such income, he may impose penalty on him. From a bare reading of section 271, it is manifest that even where the conditions as envisaged therein are satisfied, the Assessing Officer has discretion in the matter. The word "may" leaves no room for doubt that imposition of penalty is discretionary. It appears from the order of the....