1976 (2) TMI 19

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..... 69 ? " The facts of the case may be briefly stated as follows: The assessee filed returns of income for the three assessment years 1966-67, 1967-68 and 1968-69 on December 31, 1966, September 12, 1967, and September 27, 1968, respectively. Under the provisions of section 140A of the Income-tax Act, 1961, the assessee was required to pay self-assessment taxes on the basis of its return of income within thirty days from the date of submission of the returns. The assessee in the instant case failed to pay the taxes on the basis of self-assessment. So proceedings for imposition of penalty under section 140A(3) of the Income-tax Act, 1961, were initiated. Notice was issued requiring the assessee to show cause why penalty under that section s .....

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..... question and that the Appellate Assistant Commissioner was justified in confirming the penalties. On the above facts the above-mentioned question of law has been referred. Mr. B. P. Saraf, the learned counsel appearing on behalf of the assessee, has submitted that the Income-tax Officer committed an error of law in rejecting the cause shown by the assessee on the ground that the assessee should have made provision for payment of taxes before investing money in heavy construction works which were undertaken by the assessee during the relevant assessment years. The precise submission of the learned counsel is that instead of considering the reasons given by the assessee for non-payment of the taxes, the Income-tax Officer has given a serm .....

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..... any such penalty, the assessee shall be given a reasonable opportunity of being heard." Going through the provisions of section 140A, it is found that if after submitting a return the assessee does not pay the tax on the basis of the self-assessment made in the return submitted, within thirty days from the date of submission of the return, he is liable to penalty, which may be up to fifty per cent. of such tax. The proviso to the section lays down that before levying such penalty the assessee must be given a reasonable opportunity of being heard. Considering the language of the section, it is found that the Income-tax Officer, has a discretion to levy penalty. Since it is provided in the section itself that before levying the penalty the .....

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