Judgment 1. These references under Sec. 256(1) of the Income-tax Act, 1961, are at the instance of the Revenue. The solitary question referred to this court for its opinion is : "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in cancelling the order levying penalty under Sec. 140A(3) ?" 2. The material facts are as follows : The assessee, which is a firm, filed returns of income for the assessment years 1973-74 and 1974-75 on August 14, 1973, and September 23, 1974, respectively. For the assessment year 1974-75, a revised return was filed on January 13, 1975. After adjustment of advance tax, etc., self-assessment tax amounting to Rs. 1,71,943 and Rs. 1,61,292 was payable under Sec. 140A of the Income-tax Act. The assessee informed the Income-tax Officer on September 15, 1973, about his inability to pay the tax on account of financial stringency. The Income-tax Officer refused the prayer and initiated penalty proceedings. The show-cause filed by the assessee was rejected in due course and penalty was levied amounting to Rs. 25,000 and Rs. 15,000, respectively, for the two years. The Commissioner of Income-tax (Appeals) upheld the orders on appeal by the assessee. On further appeal by the assessee, the Income-tax Appellate Tribunal considered the submission of the assessee and relying on documents produced by it, cancelled the order of penalty. The Tribunal, however, allowed the request of the Department to refer the aforementioned question of law to this court for its opinion. 3. Sec. 140A(1) of the Income-tax Act provides, inter alia, that where any tax is payable on the basis of any return required to be furnished under Section 139 or Sec. 148, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee is liable to pay such tax, together with interest, if payable. Sub-sec. (3) of that section lays down that where any assessee fails to pay the tax or interest or both, without prejudice to any other consequence he will be deemed to be "an assessee in default" in respect of the tax or interest or both remaining unpaid in which event "all the provisions of this Act" are to apply accordingly. The provision in regard to, the imposition of penalty is contained in Sec. 271 of the Act. The provision in regard to, the imposition of penalty is contained in Sec. 271 of the Act. Clause (c) of Sec. 271(1) provides that if the Assessing Officer is satisfied that any person has failed to comply with the notice or has concealed the particulars of his income or furnished any inaccurate particulars of such income, he may impose penalty on him. 4. From a bare reading of Sec. 271, it is manifest that even where the conditions as envisaged therein are satisfied, the Assessing Officer has discretion in the matter. The word "may" leaves no room for doubt that imposition of penalty is discretionary. It appears from the order of the Tribunal that in coming to a favourable conclusion it relied on documents produced by the assessee such as the statement showing the cash position in the State Bank of India and the Canara Bank showing, according to it, that the financial position of the assessee at the relevant time was not good. The Tribunal in reversing the order of the Income-tax Officer as also the Commissioner of Income-tax (Appeals) found that the said two authorities had relied on the closing cash balance which could not provide a safe basis for ascertaining the actual financial condition of the assessee. 5. It would thus appear that the finding of the Tribunal is based on documents. If the Assessing Officer possesses a discretion under Sec. 271(1)(c) of the Act to impose penalty, it cannot be denied that the appellate authority including the Tribunal also possess the same discretion. Once this jurisdiction is conceded to the Tribunal, the rest of the dispute is concluded by finding of fact. In this proceeding it is not open to this court to either go behind the finding of fact or to see the adequacy of the material on which the finding is based. Consequently, we do not find any error in the order of the Tribunal. 6. In the result, the question is answered in the affirmative, that is, in favour of the assessee and against the Revenue, There will be no order as to costs.