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1978 DIGILAW 59 (KER)

CONTROLLER OF ESTATE DUTY v. VENBOTRAMAN

1978-02-24

G.BALAGANGADHARAN NAIR, V.P.GOPALAN NAMBIYAR

body1978
Judgment :- 1. At the instance of the Revenue, the Income-tax Appellate Tribunal, Cochin Bench has referred the following question for our opinion under S.64 (1) of the Estate Duty Act 1953: "(1) Whether a person can, under sec, 62 (1) (b) of Estate Duty Act, 1953 appeal to the Appellate Controller against an order of rectification passed by the Assistant Controller under S.61 of the Estate Duty Act payable in respect of the property is enhanced? (2) Whether in the facts and circumstances of the case, the deduction of Rs. 5,151-25 allowed under S.50 of Estate Duty Act, 1953 is a mistake apparent from record within the meaning of S.61 of Estate Duty Act, 1953?" 2. The deceased Easwara Iyer was a member of an undivided Hindu family consisting of himself and his three sons, each having a one-fourth share in the joint family properties. On his death, the said one-fourth share passed, for the purpose of the Estate Duty Act. He had also individual properties is addition to his share in the joint family properties. The assessment to estate duty was completed on 31st May 1967. The accountable person viz. one of his sons had paid Rs. 5,151.25 as court-fee for obtaining succession certificate in respect of the estate of the deceased. At the time of completing the assessment no deduction was allowed in respect of the court-fee paid. By an order of rectification dated 28 71967, under S.61 of the Act, the Assistant Controller deducted the amount of court-fee paid by the Accountable person from the valve of the estate for the purpose of estate duty. Later on, however, the Assistant Controller seems to have had second thoughts as to whether the accountable person is entitled to credit for the entire amount of court fee paid or only to that part of it in proportion to the one-fourth share which alone passes on death. Therefore another order of rectification under S.61 of the Act was passed on 113 1970, giving credit only to a proportionate court-fee of Rs. 1,600/-. This resulted in an enhancement of estate duty payable in respect of the property passing on death. The assessee carried up the matter in appeal to the Appellate Controller. Objection was taken to the maintainability of the appeal which was overruled. 1,600/-. This resulted in an enhancement of estate duty payable in respect of the property passing on death. The assessee carried up the matter in appeal to the Appellate Controller. Objection was taken to the maintainability of the appeal which was overruled. On the merits the Appellate Controller agreed with the Assessee and held that he was entitled to deduction of the entire court-fee He was further of the view that there was no mistake apparent on the face of the record which would justify a rectification by the Assistant Controller. There was a further appeal to the Tribunal at the instance of the Assistant Controller. The Tribunal sustained the order of the Appellate Controller on the maintainability of the appeal. But on the merits, the Tribunal also agreed that the question as to whether the entire court-fee was deducted or only a proportionate part thereof was not a mistake or error on the face of the record and would not therefore attract a rectification order under S.61 of the Act. This was how the Tribunal summarised its conclusion. The questions of law have been referred at the instance of the Revenue. 3. On the first question, we are of the opinion that an appeal is competent to the Appellate Controller against the order of rectification passed by the Assistant Controller. S.62(1) of the Act provides: "62. This was how the Tribunal summarised its conclusion. The questions of law have been referred at the instance of the Revenue. 3. On the first question, we are of the opinion that an appeal is competent to the Appellate Controller against the order of rectification passed by the Assistant Controller. S.62(1) of the Act provides: "62. Appeal against orders of Controller.-(I) Any person (a) objecting (i) to any valuation made by the Controller, or (ii) to any order made by the Controller determining the estate duty payable under S.58 or S.59, or (iii) to any penalty levied by the Controller under S.60, S.72 or S.84, or (iv) to any penally imposed by the Controller under sub-section (1) of S.46 of the Indian Income-tax Act, 1922 (11 of 1922), as applied under sub-section (5) of S.73 for purpose of Estate duty, or (b) denying his liability to the amount of the estate duty payable in respect of any property, may, within thirty days of the date of the receipt of the notice of demand under S.73 appeal to the Appellate Controller in the prescribed form which shall be verified in the prescribed manner: Provided that no appeal shall lie under sub-clause [iv] of clause [a] unless the duty has been paid before the appeal is filed." It was contended for the Revenue that there was neither any determination of the estate duty payable under S.58 or 59, nor any assessment to penalty, nor any objection to valuation to attract clause (a) of S.62(1). While this may be so, we are of the opinion that the appeal is squarely covered by clause (b) of S.62(1) of the Act. The said clause is widely worded and if as a result of the rectification order passed, the Accountable person was denying his liability to the estate duty which he was called upon to pay, that is sufficient to attract the right of appeal conferred by S 62(1)(b). The view taken by the Appellate Controller and by the Appellate Tribunal on the maintainability of the appeal was therefore correct. Turning now to the second question, we are in agreement with the Tribunal and the Appellate Controller that there was no mistake or error apparent on the face of the record to justify a rectification and that the order of rectification was therefore unsustainable. We say so on two grounds. Turning now to the second question, we are in agreement with the Tribunal and the Appellate Controller that there was no mistake or error apparent on the face of the record to justify a rectification and that the order of rectification was therefore unsustainable. We say so on two grounds. First that the question whether in respect of the facts disclosed, the entire court-fee could be claimed deduction of, or only a proportionate part thereof representing the share of the deceased passing on death, is at least a debtable question. So that, it is difficult, if not impossible, to posit that there was a mistake or error apparent on the face of the record. We are further of the view that if the legal position in regard to this aspect of the matter had to be examined and bad to be pronounced upon, it should be decided in favour of the Accountable person by holding that there is no provision of law which would justify a person entitled only to one-fourth of estate taking out an application for succession certificate in respect of the entire estate, to confine payment of court-fee only to the one-fourth share in which he was interested. The Tribunal has noticed certain provisions of the Court-fees Act, and of the Indian Succession Act, from which it is sufficiently clear that for applying for a succession certificate in respect of an estate of the deceased it was necessary to pay court-fee on the value of the entire estate. Court-fee having thus been paid by the Accountable person, the question of deduction is governed by S.50 of the Estate Duty Act, which reads: "50. Relief from a estate duty where court-fees have been paid for obtaining representation to estate of deceased.- Where any fees have been paid under any law relating to court-fees in force in any State for obtaining probate, letters of administration or a succession certificate in respect of any property on which estate duty is leviable under this Act, the amount of the estate duty payable shall be reduced by an amount which is equal to the court-fees so paid " The Section makes it clear that the fee paid under any law relating to court-fee for obtaining succession certificate in respect of any property on which estate duty is leviable, is liable to be deducted for purpose of estate duty. On the terms of the Section, we are unable to confine the expenditure or the deduction only to the proportionate part of the court-fee proportionate to the share of the deceased which passes on bis death and in regard to which estate duty has to be assessed. Our attention was called to S.5, 6, 7 and 39(1) of the Act. These make clear the position as to what is the quantum of the interest that passes on death. But the liability to deduction is governed by S.50 of the Act and by the provisions of the Indian Succession Act and the Court-fees Act. On these provisions, we think that the accountable person was entitled to deduction of the payment of the entire court-fee. In the result, we answer question No.1 in the affirmative i.e. in favour of the accountable person and against the Department and question No. 2 in the negative i.e. in favour of the accountable person and against the Department. We make no order as to costs. A copy of this judgment under the seal of the Court and the signature of the Registrar, will be communicated to the Appellate Tribunal, as required by law.