Late filing penalty under wealth-tax law follows the provision in force when default first occurs, not a later amendment.

Late filing penalty for wealth-tax returns was governed by the law in force when the return first became due, because the default was complete on that date and was not a continuing default. Where the defaults had already accrued before the amendment of section 18(1)(a) with effect from 1 April 1969, the amended provision could not be applied retrospectively to increase the penalty. Penalty therefore had to be computed under section 18(1)(a) of the Wealth-tax Act as it stood before amendment, and the issue was answered in favour of the assessee and against the department.

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Issues: Whether penalty for late filing of wealth-tax returns, where the defaults occurred before the amendment of section 18(1)(a), had to be computed under the unamended provision or under the amended provision that came into force on 1 April 1969.

Analysis: The return due date in each assessment year marked the point at which default became complete. The default was not a continuing default. Therefore, the law in force on the date when the return first became due governed the penalty, and the later amendment with effect from 1 April 1969 did not apply to defaults that had already accrued before that date.

Conclusion: Penalty was required to be calculated under section 18(1)(a) of the Wealth-tax Act as it stood prior to amendment, and the question was answered in the affirmative and against the department.

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