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Issues:
Calculation of penalty under different sections of the Wealth-tax Act, 1957 for assessment years 1964-65 to 1968-69. Analysis: The case involved the assessee, Tapan Kumar Baruah, and pertained to penalty orders for the assessment years 1964-65 to 1968-69 under the Wealth-tax Act, 1957. The penalties were imposed due to delays in filing returns by the assessee. The Wealth-tax Officer divided the delays into two parts: up to March 31, 1969, and beyond April 1, 1969, and levied penalties accordingly. The penalties were calculated at a rate of 2% per month of tax payable for the former period and at a rate of 1/2% of total wealth for the latter period. The Appellate Assistant Commissioner modified the penalty order, reducing it to 50% of the total wealth-tax, effectively overturning the penalty for the period after April 1, 1969. The Appellate Tribunal upheld the penalties imposed by the Wealth-tax Officer for the period up to March 31, 1969, as the assessee had crossed the limit of maximum 50% of the total tax. The Tribunal directed that penalties be calculated for each completed month of default, subject to a maximum of 50% of tax payable. Additionally, the Tribunal affirmed the calculation of penalty at a rate of 1/2 on the total net wealth for the period beyond April 1, 1969. The case was referred to the High Court under section 27(1) of the Wealth-tax Act, 1957. The High Court, considering the amendments to section 18(1)(i) of the Wealth-tax Act, 1957, held that the Tribunal's decision was in line with the Supreme Court's ruling in Jain Bros. v. Union of India [1970] 77 ITR 107. The Court noted that the crucial date for imposing penalties is the completion of assessment, not the assessment year or filing date of returns. The Court also highlighted the case of Maya Rani Punj v. CIT [1986] 157 ITR 330, which reversed the decision in Suresh Seth's case [1981] 129 ITR 328. As the Tribunal's decision aligned with the principles set out in Maya Rani Punj's case, the High Court ruled in favor of the Revenue and against the assessee, upholding the penalties imposed.
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