SAHAI, J. - (1.) THE Tribunal, Allahabad has referred the following question of law under s. 27 of the WT Ac t, 1957 ('the Act') for the opinion of this Court : "1. Whether the Tribunal was right in holding that the default under S. 14(1) of the WT Act was not automatically condoned as soon as the WTO served a notice under 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 proceedings were initiated under S. 18 (1)(a) of the Act for late filing of return for 1971- 72 on 27th March, 1974 only after notice under S. 17 of the Act was issued. claim of the assessee of ignorance of including even bank deposits of Rs. 57,000 in her own name in return was repelled as it was not supported by any evidence nor was the plea raised in response to notice under S. 17. Further, bona fide of the assessee was found not to have been made out by 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. In Prithivi Nath Bharga Suraj Nath Bharga vs. CWT 1979 UPTC 1499 (All) a Division Bench of our Court examined controversy relating to burden of proof, mens rea and bona fide under 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 contumacious 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 fide. 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 circumstances to throw light on the genuineness of the assessee's belief or the lack of his bona fide.
(3.) THE Tribunal, therefore, erred in its approach on question of law. Facts are also quite clear. Husband was no doubt wealth tax assessee but how 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 in 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 Bharga's case (supra) applied the assessee's case.;