JUDGMENT G. P. Singh, C.J 1. This is a reference made by the Income-tax Appellate Tribunal under section 256 (1) of the Income-tax Act, 1961 referring for our answer the following question of law :- "Whether on the facts and in the circumstances of the case the Tribunal was right in law in canceling the penalty of Rs. 2000 levied under section 140-A (3) of the Income-tax Act, 1961 ?" 2. The assessee M/s Vrajlal Manilal and Co. filed its return of income for the assessment year 1965-66 on 28th June 1965. The assessee should have paid a sum of Rs. 17,837 as tax in accordance with the return on or before 27th July 1965 under section 140-A (1) of the Act. The assessee, however paid Rs. 9456 on 9th August 1967 and Rs. 2000 on 11th March 1970, leaving a balance of Rs. 6381 still payable under section 140-A (1) of the Act. The Income-tax Officer by order dated 23rd March 1972 levied a penalty of Rs. 2000 under section 140-A (3) for the assessee's failure to pay the amount of Rs. 17,837 as required by section 140-A (1). The order imposing penalty was upheld in appeal by the Appellate Assistant Commissioner. The assessee preferred a further appeal to the Appellate Tribunal. The Tribunal allowed the appeal and cancelled the penalty on the ground that section 140-A (3) was unconstitutional and void. In holding so, the Tribunal relied upon the decision of the Madras High Court in A. M. Sali Maricar and another Y. Income-tax Officer 90 ITR 116 Mad, 3. Section 140-A, as in force at the relevant time, read as follows: "140-A. Self assessment-(l) Where a return has been furnished under section 139 and the tax payable on the basis of that return as reduced by any tax already paid under any provision of this Act exceeds five hundred rupees, the assessee shall pay the tax so payable within thirty days of furnishing the return. (2) After a regular assessment under section 143 or section 144 has been made any amount paid under sub section (1) shall be deemed to have been paid towards such regular assessment. (2) After a regular assessment under section 143 or section 144 has been made any amount paid under sub section (1) shall be deemed to have been paid towards such regular assessment. (3) If any assessee fails to pay the tax or any part there of in accordance with the provisions of sub-section (1), he shall unless a regular assessment under section 143 or section 144 has been made before the expiry of the thirty days referred to in that sub- section, be liable, by way of penalty, to pay such amount as the Income-tax Officer may direct, and in the case of a continuing failure, such further amount or amounts as the Income-tax Officer may, from time to time, direct, so, however, that the total amount of penalty does not exceed fifty percent of the amount of such tax or part, as the case may be : Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard." 4. The learned Standing Counsel for the Department argued that the Tribunal had no jurisdiction to go into the constitutional validity of section 140-A (3) and that it ought to have acted on the assumption that the said provision is valid. It is, no doubt true that the Tribunal and other authorities under the Income-tax Act which are creatures of the Act have no jurisdiction to enquire into the validity of any provision of the Act. Indeed it has been held that even the High Court and the Supreme Court are not competent to go into the constitutional validity of any prevision of the Act in a reference proceeding [See M/s K. S. Venkataraman auu Co. (P) Ltd. V. State of Madras AIR 1966 SC 1089 , and Commissioner of Income tax. Madhya Pradesh v. M/s Straw Products Ltd AIR 1966 SC 1113 p.1116. The position is, however, different when a provision of the Act is declared unconstitutional by a High Court in its writ jurisdiction under Article 226 before the appeal is heard by the Tribunal. In such a case the Tribunal being bound by it the ruling of the High Court has to give effect to it. In so doing the Tribunal does not itself declare a provision unconstitutional but only ignores the provision which has already been declared to be unconstitutional by a superior authority. In such a case the Tribunal being bound by it the ruling of the High Court has to give effect to it. In so doing the Tribunal does not itself declare a provision unconstitutional but only ignores the provision which has already been declared to be unconstitutional by a superior authority. As the Madras High Court had declared section 140-A(3) unconstitutional in Sali Maricar's case and as there was no contrary ruling available at the time when the Tribunal decided the appeal, it was bound to give effect to that decision. The Bombay High Court in Commissioner of Income-tax Vidarvha v. Smt. Godavaridevi Saraf 113 ITR 589 Bom, has taken the same view and we fully agree with it. 5. The further question, however, is whether we can in the reference before us, differ from the view taken by the Madras High Court especially when in the meantime two other High Courts, namely, Andhra Pradesh and Calcutta, have dissented from the view taken in Sali Maricar's case [See Kashiram v. Income-tax Officer. E ward 1017 ITR 825 AP and Gunny Exporters Pvt. Ltd. v. I. T. O. and others 1976 TLR 603 Cal, This question was not argued and examined by the Bombay High Court in Godavaridevi's case. The decision of the Madras High Court which was the only relevant decision at the time when the Tribunal decided the appeal was binding on the Tribunal but that decision is not binding on us. The question referred to us is whether the Tribunal was "right in law" in canceling the penalty. The relevant law which the Tribunal ought to have applied has remained unchanged, for the ruling of the different High Courts dealing with the validity and effectiveness of section 140-A (3) are merely expositions of that law. As we are required to decide whether in law the Tribunal was right in deciding as it did, we have necessarily to examine whether the ruling of the Madras High Court, which was followed by the Tribunal, correctly laid down the law. As we are required to decide whether in law the Tribunal was right in deciding as it did, we have necessarily to examine whether the ruling of the Madras High Court, which was followed by the Tribunal, correctly laid down the law. The learned counsel for the assessee submitted that as the Madras ruling was the only ruling available at the time when the Tribunal decided the appeal and as the Tribunal was bound to follow that ruling, the Tribunal was right in canceling the penalty and we cannot examine the question whether that ruling correctly laid down the law., We are unable to agree with this argument. As already explained by us, we have to decide whether the Tribunal was right in law in cancelling the penalty. The relevant law has remained unchanged. The Madras ruling is merely an exposition of that law and as that ruling is not binding on us, we can ourselves see as to what is the correct legal position. The High Court in dealing with a reference is not pinned down to the rulings available or the interpretation in vogue at the time when the Tribunal decided the case and it is the High Court's duty to answer the point of law referred after taking into account all relevant material up to date. It is true that the question relating to the constitutional validity of a provision of the Act cannot ordinarily be examined in a reference but the position is different when, as in the instant case, the constitutional validity has already been examined by three High Courts under Article 226 and one of them has declared the provision to be invalid, In the circumstances of the instant case, it is not possible to decide the reference without going into the question of constitutional validity. 6. We now come to the question whether section 140-A (3) was rightly held to be unconstitutional by the Madras High Court. The reasoning of the Madras High Court is that every citizen has a fundamental right to retain his income after payment of taxes and that levy of penalty under section 140 A (3) is confiscatory of property for non-payment of tax in time and is an unreasonable restriction on the fundamental right to hold property guaranteed under Article 19 (1) (f). With great respect, we are unable to agree with this reasoning. With great respect, we are unable to agree with this reasoning. Section 140-A (1) requires the assessee to pay the tax on the basis of the return within thirty days of its furnishing. To make the evasion of this provision unprofitable, section 140-A (3) authorises the Income-tax Officer to impose penalty not exceeding 50% of the amount of tax. It will be seen that the Income-tax Officer has a discretion which he has to exercise judicially after notice to the assessee. The amount of penalty which the Income-tax Officer can impose within the maximum limit would depend upon the facts and circumstances of each case. Further, the Income-tax Officer is not bound to impose penalty in every case and if good grounds are shown for not depositing the tax within the time allowed under section 140-A (1), he can decide not to impose any penalty. It is well settled that even if a minimum penalty is prescribed, the authority competent to impose the penalty is justified in refusing to impose penalty when there is a technical or venial breach of the provision or where the circumstances show that the assessee in good faith believed that he was not liable to act in the manner prescribed by the statute-Hindustan Steel Ltd. v. State of Orissa 83 ITR 26 SC, Having regard to the discretion conferred upon the Income-tax Officer, which has to be reasonably exercised the provision of penalty under section 140-A (3) cannot be held to be confiscatory and unreasonable. The penalty is in the nature of additional tax for securing compliance that the tax is paid within the time allowed under section 140-A (1). The assessee's income is no doubt, his property but the assessee can retain that property only subject to the right of the State to recover taxes and a reasonable provision made to secure payment of tax on due date cannot be held to be infringement of the right to hold property. The view taken by us is in line with the view taken by the Andhra Pradesh and Calcutta High Courts, In our opinion, section 140-A (3) is not unconstitutional. 7. For the reasons given above, our answer to the question referred is that the Tribunal was not right in law in cancelling the penalty. There shall be no order as to costs of this reference.