Waiver of penalty and interest for belated agricultural income tax payment was justified where sufficient cause and departmental error were shown.

The proviso to Section 16-A(5) of the Tamil Nadu Agricultural Income Tax Act, 1955 allows the Commissioner to reduce or waive penalty for belated payment where sufficient cause for delay is shown. The text states that the assessee had already paid the tax and penalty, and the further demand arose from an apparent departmental mistake. On those facts, the discretion to grant relief should have been exercised, particularly because the levy had been satisfied and grounds for waiver existed. The additional penalty and interest were therefore liable to be waived.

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Issues: Whether additional penalty and interest levied for belated payment of agricultural income tax could be waived under the proviso to Section 16-A(5) of the Tamil Nadu Agricultural Income Tax Act, 1955.

Analysis: The statutory scheme permits recovery of penalty for default in timely payment, but the Commissioner is empowered to reduce or waive the penalty where sufficient reason exists for the delay. The petitioner had already remitted the tax and penalty, and the further demand arose from an alleged departmental mistake. In these circumstances, the discretion to waive ought to have been exercised, especially when the levy had already been satisfied and the assessee's case disclosed grounds for relief.

Conclusion: The demand for additional penalty and interest was liable to be waived.

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