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TMI Blog2013 (4) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... ken into consideration Section 273-B of the Act, while upholding the penalty. The section provides that no penalty shall be impossable on the person or the assessee, as the case may be, for any failure referred to Section 271-C if he proves that there was reasonable cause for the said failure. Authorities were under legal obligation to consider the explanation given by the petitioner. We are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner is a State Government Department and is doing the work of construction of the roads and maintaining the government buildings through its Contractors. It has awarded work contract to the registered contractors. It appears that the Income Tax Department initiated proceedings for short deduction of tax at source for financial years 1989-90, 1990-91 1991-92. In reply to the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the petitioner is a department of State of U.P. and there is no personal interest of the Officer that the mistake has occurred as the petitioner was not well aware about relevant provisions of law. As soon as, the petitioner came to know that there is a short deduction of tax at source, the petitioner deposited the interest as well as the tax amount. In reply, Shri Chopra, learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r affidavit was granted but till date no counter affidavit has been filed by the respondents. There being no denial of the above fact, we take it that the petitioner has deposited the tax and interest as well. Now the question of levy of penalty remains. Looking to the fact that the petitioner is a part of State Government, we find that there was sufficient cause for short deduction of tax at so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r levying the penalty under Section 271-C of the Act has been made out as cause shown by the petitioner is sufficient. The impugned orders cannot be allowed to stand and are hereby quashed. The impugned penalty order dated 06.01.1994 for the financial years 1989-90, 1990-91 1991-92 is hereby, set aside. In the result, the writ petition succeeds and is allowed. No order as to costs. - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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