Penalty liability under Wealth-tax law follows the return due date, not the first day of the assessment year.

Penalty under section 18(1)(a) of the Wealth-tax Act, 1957 was linked to the law in force on the date the default occurred, namely the last date for filing the return, rather than the first day of the assessment year. Where the return for the relevant assessment year was due on 30 June 1968 and was filed late, the statutory position on that due date governed both liability to penalty and its quantum. The commencement of the assessment year was treated as irrelevant because the operative event for penalty purposes was the failure to file by the prescribed deadline.

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Issues: Whether penalty under section 18(1)(a) of the Wealth-tax Act, 1957 had to be governed by the law in force on the first day of the assessment year or by the law in force on the date when the return was actually due.

Analysis: The return for the assessment year 1968-69 was due on 30 June 1968, and the return was filed late. The relevant basis for determining liability to penalty was held to be the date on which the default occurred, namely the last date for filing the return, and not the first day of the assessment year. The commencement of the assessment year was treated as irrelevant because the operative event for penalty purposes was the statutory date of default.

Conclusion: The provisions of section 18(1)(a) of the Wealth-tax Act, 1957 as they stood on 30 June 1968 governed the levy and quantum of penalty.

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