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Levy of penalty under section 18(1)(a) of the Wealth-tax Act, 1957 for delayed submission of wealth tax returns. Detailed Analysis: The judgment by the High Court of MADRAS involved a common issue regarding the levy of penalties under section 18(1)(a) of the Wealth-tax Act, 1957 for delayed submission of wealth tax returns by the assessee. The Tribunal referred the question of whether the penalties were warranted in the circumstances of the case. The cases related to assessment years 1963-64 to 1969-70, where the Wealth-tax Officer initiated penalty proceedings due to delays in filing returns. The assessee, a minor for most of the relevant period, cited reasons such as lack of clarity about wealth extent and assistance from the official trustee for the delay. The Wealth-tax Officer levied penalties for the assessment years from 1962-63 onwards, leading to appeals by the assessee and the Department to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, while acknowledging no reasonable cause for the delay, reduced the penalties based on precedent. The Tribunal, after considering the submissions, noted that the assessee was a minor for most of the default period and that there was no intention to avoid tax payments. The Tribunal found the delay to be technical or venial, citing the Hindustan Steel Limited v. State of Orissa case. The Tribunal held that the breach, if any, was not substantial enough to warrant penalty under section 18(1)(a). The Department appealed the Tribunal's decision, arguing that the burden of showing reasonable cause rested on the assessee and that the default was not venial. The Tribunal's decision was based on factual considerations and should not be lightly interfered with, according to the assessee's counsel. The High Court upheld the Tribunal's decision, stating that the default was only venial, aligning with the Hindustan Steel Limited case. The Court found the Tribunal's reasoning sufficient and noted that mens rea was an essential element for levying penalties under section 18(1)(a) of the Act. The Court found no reason to interfere with the Tribunal's decision, as it was based on relevant facts and considerations. The question referred to the Court was answered in the affirmative, ruling against the Revenue. The assessee was awarded costs for the reference, including counsel's fee.
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