V.K. Mehrotra, J. - (1.) HAJI Mohammad Hamza of Kanpur died on June 21, 1956. His son, Sri M.A. Barkat, filed details of the estate of the deceased under the provisions of the E.D. Act (briefly, "the Act") as accountable person. Assessment was made by the Dy. Controller of Estate Duty on February 29, 1960. The movable property of the deceased included the value of 204 shares in M/s. U. P. Tannery Co. (P.) Ltd., computed at Rs. 12,59,514. This figure had been arrived at after making allowance for the income-tax liabilities of the company but it was observed by the Dy. Controller in his order that in case it was found that no income-tax was payable by the company, the liability of the deceased would be rectified.
(2.) SECTION 21 of the K. D. (Amend.) Act, 1958, inserted a new SECTION 59 in the Act while deleting some sections, including SECTION 62 of the unamended Act, with effect from July 1, 1960. On February 15, 1962, a notice under Section 59 of the Act was issued to the accountable person by the Asst. Controller saying that he had reason to believe that property chargeable to estate duty had been under-assessed. An objection was filed by Sri Barkat to the effect that assessment proceedings had become final tinder the unamended Act and could not be reopened. On March 9, 1966, the Asst. Controller issued a notice fixing March 11, 1966, for hearing in the reassessment proceedings after rejecting the objection. At this, Sri Barkat filed Writ Petition No. 1585 of 1966 in this court challenging the initiation of reassessment proceedings. This writ petition was, however, dismissed by a learned single judge whose decision was affirmed by a Division Bench on May 6, 1970, in Special Appeal No. 114 of 1967. The view taken by the Special Appeal Bench was that the notice of February 15, 1963, had been issued well within the period of three years prescribed under Section 73A of the amended Act as it had been issued within that period from the date of the initial order for assessment, dated February 29, 1960. It also held that there was some material in the possession of the Dy. Controller which could furnish him a ground for believing that property had escaped assessment to estate duty under Section 59(2) of the amended Act. On November 26, 1971, an order of reassessment was passed by the Asst. CED, Kanpur, which was affirmed by the Appellate CED by his decision dated October 10, 1974. The matter was taken up in second appeal before the Income-tax Appellate Tribunal, Allahabad Bench, by the accountable person. The Appellate Tribunal allowed the appeal by its order of October 20, 1976. It took the view that the original proceedings of assessment having become final prior to the enforcement of Section 59 with effect from July 1, 1960, it was not open to reopen the assessment of the estate of the deceased. The Tribunal quashed the order of assessment passed on November 21, 1961, but, at the instance of the Controller, Kanpur, it has referred the question : "Whether, on the facts and in the circumstances of the case, the reassessment order pursuant to Section 59 read with Section 62 of the unamended Estate Duty Act, 1953, was valid ? " for the opinion of this court.
(3.) SUB-section (1) of Section 62 of the unamended Act, which alone is relevant, in its material part, ran thus: "62. (1) If, after the determination of the estate duty payable in respect of any estate, it appears to the Controller that, by reason of any mistake apparent from the record or of any mistake in the valuation of any property in any case other than a case in which the valuation has been the subject-matter of an appeal under this Act......the estate duty paid thereon is either in excess of or less than the actual duty payable, he may, either on his own motion... ...at any time within three years from the date on which the estate duty was first determined...... (b) determine the additional duty payable on the property......" Section 59 of the Act, as amended, providing for escaped assessment in so far it is relevant, is in these terms: "59. If the Controller,-- (a) has reason to believe that by reason of the omission or failure on the part of the person accountable...... (b) has, in consequence of any information in his possession, reason to believe notwithstanding that there has not been such omission or failure as is referred to in Clause (a) that any property chargeable to estate duty has escaped assessment, whether by reason of under-valuation of the property included in the account or of omission to include therein any property which ought to have been included, or of assessment at too low a rate or otherwise, , he may at any time, subject to the provisions of Section 73A, require the person accountable to submit an account........." ;