Law:

Section:

Section 140A(3) of the Income-tax Act, 1961 [as it stood prior to 1-4-1976] - Penalty - For non-payment of sell-assessment tax - For assessment year 1974-75, assessee-firm filed its return on 24-5-1975 but did not pay tax due on sell-assessment within 30 days thereafter as required under section 140A(1) -ITO imposed penalty for default of non-payment of tax due as per return until 31-3-3976 - He imposed a further penalty for continued default of assesses till 3-9-1977, on which date a final order of assessment was passed -Whether when requirements of section 140A(1) were amended with effect from 1-4-1976, penalty for period after said amendment could be imposed upon assessee -Held, no - Whether since power conferred upon ITO under section 140A(3) [as it stood prior to 1-4-1973] was discretionary and of doubtful validity, Tribunal was justified in cancelling penalty imposed for period prior to 31-3-1976 - Held, yes Facts For the assessment year 1974-75, the assessee-firm filed its return of income on 24-5-1975 but did not pay the tax due on self-assessment within 30 days thereafter as required under section 140A(1). Consequently, the ITO imposed a certain amount of penalty upon the assessee for the default of the non-payment of the tax due as per the return until 31-3-1976. He imposed a further penalty for the continued default of the assessee till 3-9-1977, on which date a final order of assessment was passed. On appeal, the Tribunal cancelled the penalty for the period after 1-4-1976 in the light of the amendment of section 140A as per the Taxation Laws (Amendment) Act, 1975, that had come into force on 1-4-1970. It also cancelled the penalty relating to the earlier period up to 31-3-1976. On reference : Held In the instant case, the proceedings related to the assessment year 1974-75, the return in respect of which was filed on 24-5-1975. Section 140A(1) as it stood on that date required the assessee to pay the tax due on self-assessment within 30 days from 24-5-1975. The requirement of section 140A(1) after its amendment that came into force on 1-4-1976 was totally different and the assessee could not be held liable to penalty as per the amended provision of…

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