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Section 140A(3) of the income-tax act, 1961-Penalty-For non-payment of self-assessment tax-Whether tribunal was justified in setting aside penalty levied upon assessed under section 140A(3) on grounds (i) that due to paucity of funds, assessee could not pay tax and (ii) that ito had not given any reason for levying penalty-Held, on facts, yes Facts The ITO levied penalty under section 140A(3) upon the assessee on the ground that the assessee did not pay tax on the basis of the returned income within the due date. On appeal, the Tribunal held that the imposition of penalty for failure to perform the statutory obligation was a matter of discretion, which had to be exercised judicially. It further held that the authority competent to impose penalty would be justified in refusing to impose the minimum penalty, when there was technical or venial breach of provisions of the Act, Thus, the Tribunal having found that due to paucity of funds the assessee could not pay the tax and that the ITO had not given any reason for levying penalty upon the assessee held that no penalty was leviable upon the assessee. On reference : Held There was no legal infirmity in the order of the Tribunal and, therefore, the Tribunal was justified in holding that no penalty under section 140A(3) was leviable upon the assesses. IT REFERENCE NO. 455 OF 1975. Case referred to Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC). H.K. Dhar and R.P. Prasad for the Applicant. R.N. Bajoria and S.K. Chakraborty for the Respondent. JUDGMENT SUHAS CHANDRA SEN, J.-The Commissioner applied to the Tribunal for referring three questions of law under section 256(1) of the Income-tax Act, 1961 ('the Act'). The Tribunal referred only the following question to this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in…

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