JUDGMENT JUDGMENT : Sahai, J. - The Tribunal Allahabad has referred the following question of law u/s 27 of the WT Act, 1957 (the Act) for the opinion of this court :
"1. Whether the Tribunal was right in holding that the default u/s 14(1) of the WT Act was not automatically condoned as soon as the WTO served a notice u/s 14(2) or s. 17 of the WT Act ?
2. Whether the Tribunal was right in holding that the burden of proving reasonable cause for delay in the filing of the return was on the assessee and it was not necessary for the department to prove existence of mens rea ?"
2. Penalty proceeding were initiated u/s 18(1)(a) of the Act for late filing of return for 1971-72 on 27-3-1974 only after notice u/s 17 of the Act was issued. Claim of the assessee of ignorance of including even bank deposits of Rs. 57,000 her own name in return was repelled as it was not supported by any evidence nor was the plea raised in response to notice u/s 17. Further, bona fide of the assessee was found not to have been made out but the circumstances nor was the assessee justified in claiming mens rea as an essential element for the levy of penalty. It was also held that burden of proving of reasonable cause for delay in filing of return was on the assessee.
3. In Prithvi Nath Bharga Suraj Nath Bharga v. CWT 1979 UPTC 1499 (All) a Division Bench of our Court examined controversy relating to burden of proof, mens rea and bona fide u/s 18(1)(a) of the Act. It held :
"It has to be found that the assessee acted deliberately in defiance of law or was guilty of conduct contumacioys or dishonest or acted in conscious disregard of its obligation. Technical or venial breach of the provision did not justify penalty. If there is a doubt, the assessee is entitled to its benefit. The burden is on the revenue to show lack of bona fides. The first thing that should be kept in mind is as to what is the gain achieved by the assessee in delaying the filing of the return and what is the loss sustained by the Government in terms of revenue. That would be one circumstance to throw light on the genuineness of the assessees belief or the lack of his bona fides.
4. The Tribunal, therefore, erred in its approach on question of law. Facts are also quite clear. Husband was no doubt wealth tax assessee but could this result in finding that the assessee could not have a bona fide belief that in the return she was liable to include her own deposits as well. Moreover even if explanation of the assessee about her lack of knowledge to include the amount was ignored what was material in possession of department to demonstrate that late filing of return was deliberate. Initial burden is always on the department. Once it is discharged then only assessee is required to prove these facts which are in its special knowledge. In our opinion principles laid down in Prithvi Nath Bhargas case (supra) squarely applied to the assessees case.
5. We, therefore, answer question No. 2 in the negative, in favour of the assessee and against the department. In this view we do not consider it necessary to answer question No. 1. The assessee shall be entitled to her costs which is assessed at Rs. 200.