2017 (8) TMI 930 - HC - Income Tax

Levy of additional penalty on the petitioner for belated payment of agricultural income tax - Held that - Admittedly, in the instant case, the petitioner had remitted the penalty, and it is only on account of the alleged mistake committed by the Department, there is an additional demand. Therefore, this is a fit case, where, the Special Commissioner should have exercised his discretion, as provided under the proviso to section 16-A 5 of the Act and waived the penalty. That apart, as of now, the Tamil Nadu Agricultural Income Tax Act has been repealed and the petitioner-Company is also not in existence. Therefore, this Court is inclined to interfere with the matter and grant appropriate relief. Accordingly, both the Writ Petitions are allowed and the impugned orders are set aside and the petitioner is granted waiver of additional penalty and interest as demanded by the second respondent

Summary

Issues: Challenge of orders for levy of additional penalty on belated payment of agricultural income tax for assessment years 1997-98 and 1998-99.

The judgment pertains to the challenge of orders passed by the Special Commissioner and Commissioner of Agricultural Income Tax regarding the levy of additional penalty on the petitioner for belated payment of agricultural income tax for the assessment years 1997-98 and 1998-99. The petitioner had initially remitted the advance tax, which was accepted by the Agricultural Income Tax Officer. Subsequently, a notice was issued levying penalty for belated remittance of tax, which was paid by the petitioner. However, a further sum was demanded due to an alleged calculation mistake. The petitioner sought waiver, which was partially granted by the Special Commissioner, reducing interest and penalty by 25% for both years.

The judgment referred to Section 16-A (5) of the Tamil Nadu Agricultural Income Tax Act, 1955, which allows for the recovery of a penalty if the tax is not paid on time. The provision also empowers the Commissioner to reduce or waive the penalty if there was a sufficient reason for the delay in payment. In this case, the petitioner had already remitted the penalty, and the additional demand was due to a mistake by the Department. The court found it appropriate for the Special Commissioner to exercise discretion and waive the penalty, especially considering the repeal of the Act and the non-existence of the petitioner-Company. Consequently, the court allowed both Writ Petitions, set aside the impugned orders, and granted waiver of the additional penalty and interest as demanded by the second respondent, without imposing any costs.