TMI Blog1981 (4) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... inuing offence? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the penalties of Rs. 5,382 and Rs. 7,759 levied by the department, on the assessee under section 18(1)(a) of the Wealth-tax Act, 1957, for the assessment years 1964-65 and 1965-66, respectively ? " The assessee, the respondent in these appeals filed his wealth-tax returns for the assessment years 1964-65 and 1965-66 on March 18, 1971, while he was required by s. 14(1) of the Act to file the return for the assessment year 1964-65 on or before June 30, 1964, and the return for the assessment-year 1965-66 on or before June 30, 1965. The WTO completed the assessments for the aforementioned years on March 22, 1971, determining the total wealth at Rs. 1,45,800 for the assessment year 1964-65 as against the declared wealth of Rs. 1,38,550 and at Rs. 1,65,200 for the assessment year 1965-66 as against the declared wealth of Rs. 1, 59,127 and also commenced proceedings for levying penalty under s. 18(1)(a) of the Act for late submission of returns. Ultimately, the penalties were levied as follows : " Assessment year 1964-65 (i) For the period fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount as to render him liable to wealth tax under this Act, shall, before the thirtieth day of June of the corresponding assessment year, furnish to the Wealth-tax Officer, a return in the prescribed form and verified in the prescribed manner setting forth his net wealth as on that valuation date ...... (3) The Wealth-tax Officer may, if he is satisfied that it is necessary so to do, extend the date for the delivery of the return under this section. " After April 1, 1965 : " 14. (1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date was of such an amount as to render him liable to wealthtax under this Act, shall, before the thirtieth day of June of the corresponding assessment year, furnish to the Wealth-tax Officer a return in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date ...... (3) The Wealth-tax Officer may, if he is satisfied that it is necessary so to do, extend the date for the delivery of the return under this section. " Section 15 of the Act which has not undergone any change since the commencement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Assistant Commissioner, Commissioner or Appellate Tribunal in the course of any proceedings under this Act is satisfied that any person (a) has without reasonable cause failed to furnish the return which he is required to furnish under sub-section (1) of section 14 or by notice given under sub-section (2) of section 14 or section 17, or has without reasonable cause failed to furnish within the time allowed and in the manner required by sub-section (1) of section 14 or by such notice, as the case may be; or ...... he or it may, by order in writing, direct that such person shall pay by way of penalty (i) in the cases referred to in clause (a), in addition to the amount of wealth-tax, if any, payable by him, a sum, for every month during which the default continued, equal to one-half per cent. of (A) the net wealth assessed under section 16, as reduced by the amount of net wealth on which, in accordance with the rates of wealthtax specified in Paragraph A of Part I of the Schedule or Part II of the Schedule, the wealth-tax chargeable is nil, or (B) the net wealth assessed under, section 17, where assessment has been made under that section, as reduced by (1) the net wea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable cause is shown for not performing the duty. In cl. (i) of s. 18(1) of the Act, the penalty leviable for any of the omissions referred to in s. 18(1)(a) is set out but the measure of penalty imposable has varied from time to time. Prior to April 1, 1965, the penalty imposable was a sum not exceeding one and a half times the amount of wealth-tax payable by the assessee during the assessment year in question. Within the outer limit referred to above, the officer concerned or the Tribunal, as the case may be, could impose any amount as penalty having regard to all the relevant circumstances of the case including perhaps the time that had elapsed from the last day allowed to file the return. Between April 1, 1965, and March 31, 1969, the measure of penalty was regulated by s. 18 of the Act as amended in 1964. During that period the penalty imposable was a sum equivalent to 2 per cent. of the tax for every month during which the default continued but not exceeding in the aggregate fifty per cent. of the tax. The penalty leviable during this period was less onerous than it was before April 1, 1965. Then came the amendment made by the Finance Act of 1969. After April 1, 1969, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ualitative change in the nature of the default contemplated under s. 18 and that what could have been completed default before April 1, 1965, became a continuing default. Even assuming that this argument is correct it has to be held that the decision of the High Court in so far as the default committed by the assessee in not filing the return in respect of the assessment year 1964-65 is concerned, is not erroneous. What remains to be considered is whether the decision in respect of the default committed by the assessee in not filing the return due on June 30, 1965, for the assessment year 1965-66, is liable to be interfered with. To repeat, the relevant part of s. 18 of the Act can be divided into two parts, the first part contained in cl. (a) of s. 18(1) setting out the gist of the default and the second part prescribing the measure of penalty. The former part has more or less remained the same from the commencement of the Act and it is only the latter part which has undergone changes. The question is whether by reason of the changes in the latter part, there has been a change in the nature of the wrong referred to in s. 18(1)(a) of the Act. A liability in law ordinarily arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses what has to be first considered is whether the assessee had failed without reasonable cause to file the return as required by law and if it is held that he has failed to do so then penalty has to be levied in accordance with the measure provided in the Act. When the default is the filing of a delayed return, the penalty may be correlated to the time lag between the last day for filing it without penalty and the day on which it is filed and the quantum of tax or wealth involved in the case for purposes of determining the quantum of penalty but the default, however, is only one which takes place on the expiry of the last day for filing the return without penalty and not a continuing one. The default in question does not, however, give rise to a fresh cause of action every day. Explaining the expression 'a continuing cause of action' Lord Lindley in Hole v. Chard Union [1894] 1 Ch 293, 295, 296 (CA), observed : " What is a continuing cause of action ? Speaking accurately, there is no such thing; but what is called a continuing cause of action is a cause of action which arises from the repetition of acts or omissions of the same kind as that for which the action was brought. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues. Normally and in the ordinary course an offence I is committed only once. But we may have offences which can be committed from day to day and it is offences falling in this latter category that are described as continuing offences." Accordingly, the High Court of Bombay held in Bhiwandiwalla's, case, AIR 1955 Bom 161, that the failure to apply for registration of the factory under the Factories Act and to give notice of occupation thereof was not continuing offence but the running of the factory without a licence issued thereunder was a continuing offence. Section 39 of the Indian Mines Act, 1923, which came up for consideration before the Patna High Court in State v. Kunja Behari Chandra, AIR 1954 Pat 371, on which reliance was placed by the revenue is a case of continuing offence Section 39 provided: "39. Whoever contravenes any provision of this Act or of any regulation, rule or bye-law or of any order made thereunder for the contravention of which no penalty is hereinbefore provided shall be punishable with fine which may extend to one thousand rupees, and in the case of a continuing contravention, with a further fine which may extend to one hundred rupees for every d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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