Penalty for return omission requires deliberate concealment, not merely an inadvertent mistake in wealth disclosure.

Penalty for non-disclosure of an assessee's share in a partnership firm's reserve fund was held not leviable where the omission appeared inadvertent, the revised return was filed promptly after discovery, and the surrounding circumstances did not show deliberate concealment or an intent to evade tax. The decision emphasises that a mere omission in the return is insufficient for penalty unless the facts establish conscious defiance of law or a conscious attempt to evade lawful tax liability. On the balance of probabilities, the conduct did not justify penal action.

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Issues: Whether penalty under Section 18(1)(c) of the Wealth-tax Act was leviable for non-disclosure of the assessee's share in the reserve fund of a partnership firm in the return of net wealth.

Analysis: The omission was held to be inadvertent rather than deliberate. The revised return was filed promptly after the omission came to notice, and the additional wealth-tax liability was marginal compared with the severity of the penal consequence. On the balance of probabilities, the surrounding circumstances did not indicate defiance of law or an intent to evade tax.

Conclusion: Penalty was not leviable; the assessee succeeded on the issue.

Ratio Decidendi: Mere omission in a return does not attract penalty unless the surrounding circumstances establish deliberate concealment or a conscious attempt to evade lawful tax liability.

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