Penalties under Wealth Tax Act based on tax in demand notice, not outstanding tax. Tribunal to reconsider.

The High Court of Allahabad held that penalties under section 18(1)(a) of the Wealth Tax Act should be imposed based on the tax mentioned in the demand notice, not the outstanding tax at penalty imposition. The Tribunal's cancellation of penalties was deemed incorrect, and it was directed to reconsider based on this interpretation. One question was left unanswered due to pending facts, and each party was ordered to bear their own costs.

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The High Court of Allahabad held that penalty under section 18(1)(a) of the Wealth Tax Act should be imposed with reference to the tax mentioned in the demand notice, not the tax outstanding at the time of penalty imposition. The Tribunal's cancellation of penalties was deemed incorrect. The Tribunal was directed to reconsider based on this interpretation. The court returned one question unanswered due to pending facts. Each party will bear their own costs.

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