Penalty base under wealth-tax law follows the demand notice tax, not the later outstanding balance.

Penalty under the Wealth-tax Act is computed by reference to the tax stated in the demand notice, not the amount remaining outstanding when the penalty order is later made. The provision was treated as having the same language and effect as the corresponding income-tax penalty rule, so the expression referring to tax payable was linked to the tax specified in the notice of demand issued under section 156. The operative consequence is that the penalty base is fixed by the demand notice itself, rather than by any later reduction in the outstanding balance.

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Issues: Whether penalty under section 18(1)(a) of the Wealth-tax Act, 1957 is to be computed with reference to the tax mentioned in the demand notice or with reference to the tax outstanding on the date of the penalty order.

Analysis: The provision in the Wealth-tax Act was treated as identical in language to the corresponding income-tax penalty provision. The controlling interpretation was that the expression referring to the amount of tax payable links the penalty to the tax for which a demand notice is issued under section 156 of the Income-tax Act, 1961. The amount relevant for penalty is therefore the tax shown in the demand notice, not the balance outstanding when the penalty order is later passed.

Conclusion: Penalty under section 18(1)(a) is to be imposed with reference to the tax mentioned in the demand notice, not the tax outstanding on the date of the penalty order.

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