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Issues:
1. Calculation of penalty under Wealth-tax Act for delayed filing of return. 2. Application of law prevailing at the time of initiation of penalty proceedings. 3. Determination of whether non-filing of return constitutes a continuing offense. Detailed Analysis: 1. The appeal concerns the calculation of penalty under the Wealth-tax Act for delayed filing of the return. The appellant filed the return for the assessment year 1975-76 on 28th January 1981, although it was due on 31st July 1975. The Wealth-tax Officer (WTO) imposed a penalty under section 18(1)(a) after rejecting the appellant's explanation for the delay. 2. The Appellate Assistant Commissioner (AAC) upheld the penalty but directed the WTO to recalculate it based on the law prevailing at the time of initiating the penalty proceedings. The appellant argued that the penalty should be calculated in two parts: one before the amendment on 1st April 1976 and the other after that date. The appellant relied on the decision in CWT v. S.N. Tarawia and CIT v. Jagjit Kaur to support this argument. 3. The court analyzed the case of Maya Rani Punj, where it was observed that the default in filing the return is not a continuing offense. The court referred to the legislative scheme under section 271(1)(a) of the Income-tax Act, 1961, which provides for a penalty coterminous with the default, indicating a situation of continuing wrong. The court held that since the assessments were made on 30th June 1964 and penalty proceedings were initiated on that day, section 271(1)(a) of the 1961 Act was applicable. 4. The court concluded that the law applicable at the time of initiating penalty proceedings, i.e., the assessment order, must be applied. It also affirmed that non-filing of the return constitutes a continuing offense, as indicated by the legislative scheme. The court clarified that the penalty should be calculated according to the old section 18(1)(a) up to the date of the amendment and under the new section thereafter, in line with the decisions of the Bombay and Patna High Courts. 5. Therefore, the appeal was allowed based on the application of the law prevailing at the time of initiating the penalty proceedings and the understanding that non-filing of the return constitutes a continuing offense under the Wealth-tax Act.
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