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TMI BlogPenalty provisions.X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, the default is a continuing one, as the obligation to file the return continued day after day, even after the expiry of the period laid down in the Act and that the penalty has to the reckoned for every month during which the default continued. It has been further stated that the new provisions would apply in relation to the period of the default after 31-3-76 and that while the maximum penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date when the act of concealment takes place which is relevant. Thus according to the supreme court, the penalty u/s.271(1)(iii) is leviable in accordance with the law on the date when the return of income containing the concealment is filed. In suresh seth's case the the supreme court examined the provisions of sec.18(1)(a)/18(1)(i) of the Wealth-tax Act and have held that w hen the default is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the last date on which it is filed. The default if any committed is committed on the last date allowed to file the return. The default cannot be one committed every month thereafter. The words for every month during which the default continued indicate only the multiplier to be adopted in determining the quantum of penalty and do not have the effect of making the default in question a contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn was filed on 30th June, 1976. The penalty leviable u/s.271(1)(i) of the I.T.Act will be at the rate of 2% of assessed tax for every month of default but subject to a maximum 50% of the assessed tax in accordance with the law in force on 30th June, 1975 prior to the amendment which came into force on 1-4-76. Example 2: A return of wealth was due to be filed on or before 30th June, 1975 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... month during which the default continued. 4. In view of the decisions of the Supreme court the clarification given in para 2 of Instructions No.1037 dated the 1st February, 1977 referred to above are withdrawn and all pending appeals/references on the point may be withdrawn. 5. These clarifications may be brought to the notice of the officers working in your charge. - Circular - Trade Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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