COMMISSIONER OF INCOME TAX Vs. H M LALWANI

JUDGEMENT

(1.) WE have heard Mr. Sundeep Bhandawat, learned counsel for the Revenue, and Mr. Shiv Prakash, learned counsel for the respondent-assessee.

(2.) 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 :

(3.) 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 Bench of this court dated October 24, 1979, rendered in D. B. Civil Income-tax Reference Application No. 65 of 1978--CIT v. Jaipur Electro P. Ltd. [1990] 183 ITR 476 (Raj) (Appex-I). In the said case, there was a delay in payment of due amount, as such the penalty was imposed by the Income-tax Officer. ON the basis of the material available on the record, the Tribunal found that there was no justified reason to inflict the penalty.