ASSISTANT CONTROLLER OF ESTATE DUTY Vs. SITABAI
INCOME TAX APPELLATE TRIBUNAL
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Satish Chandra, Accountant Member -
(1.) THE revenue is in appeal against the order dated 18-7-1989 passed by the Appellate Controller of Estate Duty, MP-I, Indore, whereby he has annulled the order of the Assistant Controller of Estate Duty (for short 'ACED') passed under Section 58(4) of the Estate Duty Act, 1953 (hereafter referred to as 'the Act') on the ground that the proceedings are barred by limitation.
(2.) The facts in brief are that the ACED issued a notice under Section 55 of the Act on 19-12-1983 to the Accountable Person (for short, the AP), Smt. Sitabai, wife of late Shri Hiranand requiring her to make compliance as specified in the notice by 20-1 -1984. Since the compliance was not made, he fixed the case for hearing from time to time and ultimately issued a notice under Section 59 of the Act to the Accountable Person on 5-6-1987 requiring her to deliver an account of the property in respect of which estate duty was payable by 26-6-1987. In response thereto, the AP filed an application on 22-6-1987 requesting for further extension of 15 days. As the AP did not file the account of the estate at all, the ACED framed an assessment under Section 58(4) of the Act to the best of his judgment. He accordingly computed the net principal value of the estate passing on the death of the deceased at Rs. 3,76,250. Being aggrieved, the A.P. appealed.
Before the Appellate Controller of Estate Duty it was contended by the authorised representative of the AP that the ACED has wrongly mentioned the date of the death of the deceased as 30-1-1982. As per the certificate issued by the Indore Municipal Corporation Shri Hiranand died on 30-7-1981. The ACED issued notice under Section 59 of the Act on 5-6-1987 and passed the assessment order under Section 58(4) on 14-7-1987. It was contended that as per provisions of Section 73A(a) the ACED should have initiated the proceedings within a period of five years from the date of the death of the deceased. In this case the death took place on 30-7-1981. Hence, the proceedings should have been initiated by 30th July, 1986. However, the notice under Section 59 was issued on 5-6-1987 which is beyond the period of five years from the date of the death of the deceased. It was thus argued that the order dated 14-7-1987 passed by the ACED is invalid, being barred by limitation. The Appellate Controller of Estate Duty considered the above submissions and held as under :
Now the question arises as to what would amount to initiation of proceedings. It is contended that the proceedings can be said to have been initiated as soon as an account of estate has been filed under Section 53 or a notice under Section 59 has been issued and served on the A.P. within the time limit available. In the present case, no account of estate has been filed at all and the notice issued under Section 59 is beyond time limit as laid down under Section 73A(a). Hence, the contention of the AP is correct that the proceedings are barred by limitation of time and the order passed by the AO is invalid.
In view of the above facts, the order passed under Section 58(4) by the ACED is hereby annulled being invalid as the proceedings are barred by limitation of time.
The revenue is aggrieved by the above findings of the Appellate Controller of Estate Duty and is in appeal before the Tribunal.
(3.) THE learned Departmental Representative submitted that Sub-section (3) of Section 53 provides that an account shall be furnished by the AP within six months of the death of the deceased. THE proviso to Section 53(3) empowers the Controller of Estate Duty to extend, on application by the AP, a period of six months aforesaid on such terms which may include payment of interest as may be prescribed. Section 55 empowers the Controller of Estate Duty to call for information, particulars or statement from the AP. It was in exercise of the powers conferred by Section 55 of the Act that the ACED issued a notice to the AP on 19-12-1983. He vehemently argued that the above notice was issued well within the period of limitation. THE Appellate Controller of Estate Duty was, therefore, not justified in holding that the proceedings are barred by limitation and consequently annulling the impugned assessment. According to the learned Departmental Representative, despite the service of notice under Section 55 of the Act on the AP, neither compliance was made nor account of estate of the deceased was filed. THE ACED, therefore, issued notice under Section 59(a) on 5-6-1987 requiring the AP to submit an account as required under Section 53 of the Act. THE AP, however, did not file an account of the estate of the deceased in response to the above notice as well which led the ACED to pass an ex parte order under Section 58(4) of the Act. According to the learned Departmental Representative, the proceedings for levy of estate duty in this case commenced with the issue of notice under Section 55 of the Act by the ACED to the AP which was within five years and this was the period of limitation prescribed under Section 73A(a) of the Act. THE Appellate Controller of Estate Duty was, therefore, not justified in holding that the proceedings had commenced with the issue of notice under Section 59 which was beyond the prescribed time limit.;
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