- (1.) SADHU Ram died on July 3, 1969, leaving behind his widow, Smt. Pisto Devi, and four sons, out of whom, Hari Ram, petitioner, is the eldest. They constituted a joint Hindu family and on the death of Sadhu Ram, proceedings for the levy of estate duty were taken against his estate. Hari Ram filed a return as the accountable person under Section 53 (3) of the Estate Duty Act, 1953 (hereinafter called "the Act" ). According to the return filed by Hari Ram, Shri Sadhu Ram had left movable property valued at Rs. 1,67,564, had 1/6th share of the value of Rs. 58,206 in the joint Hindu family property and a similar share in a residential house of the value of Rs. 15,000 which was claimed to be exempt from payment of estate duty under Section 33 (1) (n) of the Act.
(2.) THE Assistant Controller of Estate Duty, by his order dated February 22, 1971, assessed the accountable person (Shri Hari Ram) by adding a sum of Rs. 2,32,824 representing 4/6th share of the lineal descendants of the deceased Sadhu Ram to the principal value of his estate for the purposes of rate in accordance with Section 34 (1) (c) of the Act. He also added a sum of Rs. 10,000 representing 4/6th share of the lineal descendants in the residential house. The assessment, however, is said to have been made on the principal value of the estate left by Sadhu Ram excluding the share of his lineal descendants and the widow. Against that order, the petitioner appealed to the Zonal Appellate Controller of Estate Duty, Delhi, under Section 62 of the Act which was dismissed. The petitioner then filed an appeal before the Income-tax Appellate Tribunal under Section 63 of the Act which was allowed in part on November 1, 1973. The Appellate Tribunal allowed a sum of Rs. 10,000 on account of medical expenses incurred on the illness of Shri Sadhu Ram before his death which had been disallowed by the lower authorities, but held that the value of 4/6th share in the joint Hindu family property and the residential house had been rightly included in the aggregate value of the estate for purposes of rate. Before the Tribunal, permission was sought to raise the following ground of appeal : "the Assistant Controller of Estate Duty erred in law in including in the value of the property passing on the death of the deceased a sum of Rs. 2,32,824 being the value of the share of the lineal descendants for rate purposes under Section 34 (1) (c), The Appellate Controller also erred in confirming the said inclusions. Section 34 (1) (c) of the Estate Duty Act is unconstitutional and, therefore, illegal and void as held by the Madras High Court in V. Devaki Animal v. Assistant Controller of Estate Duty, [1973] 91 ITR 24 (Mad ). "
(3.) THE learned Tribunal did not entertain that ground of appeal for the reason that the constitutional validity of any provision of the Act could not be challenged in proceedings before the authorities constituted under it. For this proposition, reliance was placed on the Supreme Court's judgment in K. S. Venkataraman and Co. (P.) Ltd. v. State of Madras, [1966] 60 ITR 112 (SC ). and a judgment of the Mysore High Court in Rastapur Sharanappa v. Controller of Estate Duty, [1970] 77 ITR 800 (Mys ). . Instead of filing an application for reference of the questions of law arising from the order of the Tribunal to this court for decision, the petitioner filed the present petition on the ground that the constitutional validity of Section 34 (1) (c) could only be challenged by way of writ petition and not in reference proceedings for the same reason as was given by the Appellate Tribunal. The petition has been contested by the respondents on whose behalf it has been strenuously urged that Section 34 (1) (c) of the Act is constitutionally valid and the judgment of the Madras High Court, to the contrary in V. Devaki Ammal v. Assistant Controller of Estate Duty, does not lay down the correct law.;