1985 (8) TMI 52 - HC - Wealth-tax

Court rules penalty under Wealth-tax Act based on law at return due date, not subsequent amendments.

The High Court held that the penalty under section 18(1)(a) of the Wealth-tax Act should be calculated based on the law prevailing on the due date of ... Penalty, Wealth Tax Issues: Calculation of penalty under section 18(1)(a) of the Wealth-tax Act based on the law prevailing on the due date of filing the return of wealth.Analysis:The judgment pertains to a case where the assessee filed the return of wealth for the assessment year 1966-67 after the due date. The Wealth-tax Officer imposed a penalty for the delay in filing the return. The Appellate Assistant Commissioner found a reasonable cause for the delay up to September 30, 1970, but not beyond that date. The Income-tax Appellate Tribunal held that the penalty should be calculated based on the law prevailing on the date the assessment order was passed, not on the date of the amendment to the law. The Tribunal referred the question of law to the High Court, which had already decided a similar issue in a previous case, stating that the penalty should be computed based on the law in force on the due date of filing the return. The High Court reiterated that the default under section 18(1)(a) is committed when the return is not filed by the due date, and the penalty should be determined based on the law prevailing on the due date. The court held that the penalty in this case should be calculated based on the law in force on June 30, 1966, the due date for filing the return, and not on the amended provisions that came into effect on April 1, 1969. The judgment emphasized that the penalty must be calculated afresh in accordance with the law prevailing on the due date of filing the return. The decision favored the assessee, and each party was directed to bear its own costs.