K. A. THANIKKACHALAM J.

At the instance of the assessee, the Tribunal referred the following two questions for the opinion of this court under section 256(1) of the Act.

"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in confirming the penalty imposed under section 140A(3) of the Income-tax Act ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the decision of the Madras High Court in Sali Maricar's case 1973 (90) ITR 116 would not apply to the provisions of section 140A after the amendment made with effect from April 1, 1976 ?"

The assessee's major income was from the firm, Viswanathan Textiles. The assessee filed his return of income for the assessment year 1976-77 on February 17, 1977, declaring a total income of Rs. 68, 575. This was accepted by the Income-tax Officer and the assessment was completed in November, 1977. The Income-tax Officer noticed that the assessee had not paid the self-assessment tax as required under section 140A(1) of the Act and so under sub-section (3) of section 140A, the assessee is liable to pay penalty. A show-cause notice was issued by t