Late gift-tax return after notice does not cure default; deemed gifts still had to be disclosed on time.

A deemed gift under section 4 of the Gift-tax Act, 1958 remained within the assessee's charging and return-filing obligation under sections 3, 2(xii) and 13(1). Filing the return only after notice under section 13(2) and before assessment did not cure the earlier failure to file within the prescribed time, and section 14 did not remove the statutory consequence of that default. The Tribunal's finding that there was no reasonable cause was treated as binding and not shown to be perverse. The default under section 17(1)(a) was therefore made out, and the penalty was upheld.

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Issues: Whether the assessee was liable to penalty under section 17(1)(a) of the Gift-tax Act, 1958 for not filing the gift-tax return within the time prescribed, and whether the later return filed in response to notice or the explanation offered constituted a valid defence.

Analysis: A gift that falls within section 4 of the Gift-tax Act, 1958 remains a gift made by the assessee himself and is included within the charging and definitional scheme of sections 3 and 2(xii) of the Act. The obligation to file a return under section 13(1) therefore applies to such a transaction. Filing a return only after notice under section 13(2) and before completion of assessment does not erase the earlier default under section 13(1), and section 14 does not negate the statutory consequence of non-compliance with the original time limit. The analogous provisions of the Income-tax Act, 1922 and the Income-tax Act, 1961 did not assist the assessee, and the Tribunal's finding that there was no reasonable cause was treated as binding and, in any event, was not shown to be perverse.

Conclusion: The default contemplated by section 17(1)(a) was made out and the penalty was rightly upheld.

Ratio Decidendi: A return filed after the statutory due date and only in response to notice does not wipe out the default already committed in failing to file the return within time, and a transaction deemed to be a gift remains within the assessee's obligation to disclose it in the gift-tax return.

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