1979 (3) TMI 17 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Assistant Controller of Estate Duty (CED) to initiate proceedings after five years from the date of death of the deceased.
2. Validity of the notice issued under Section 58(2) of the Estate Duty Act, 1953.
3. Applicability of Section 73A of the Estate Duty Act to proceedings initiated under Section 56.
4. The right to obtain a succession certificate without producing a certificate from the Controller of Estate Duty.
5. The role of voluntary submission of accounts by the accountable person.

Detailed Analysis:

1. Jurisdiction of the Assistant Controller of Estate Duty (CED) to initiate proceedings after five years from the date of death of the deceased:

The petitioner contended that no proceedings for estate duty could be initiated due to the expiration of five years from the date of death of the deceased, as per Section 73A(a) of the Estate Duty Act, 1953. The Assistant Controller lacked the jurisdiction to initiate any proceedings or issue notices under Section 58(2) of the Act after this period. The court upheld this view, emphasizing that the statute imposes a complete bar on initiating any proceedings after five years from the date of death, and there cannot be any estoppel against the statute.

2. Validity of the notice issued under Section 58(2) of the Estate Duty Act, 1953:

The court examined the validity of the notice issued under Section 58(2) by the Assistant Controller. It was argued that the notice was invalid and without jurisdiction due to the statutory bar imposed by Section 73A(a). The court agreed, stating that the Assistant Controller had no inherent jurisdiction to initiate proceedings after the expiration of the five-year period, and thus, the notice issued must be quashed.

3. Applicability of Section 73A of the Estate Duty Act to proceedings initiated under Section 56:

The court analyzed whether Section 73A's limitation period applied to proceedings initiated under Section 56. It was argued by the revenue that Section 73A only barred the initiation of proceedings by the department under Section 59 and did not affect proceedings initiated by the accountable person under Section 56. The court, however, concluded that Section 73A imposed a bar on all proceedings for the levy of estate duty, including those initiated under Section 56, after the expiration of the specified period.

4. The right to obtain a succession certificate without producing a certificate from the Controller of Estate Duty:

The petitioner sought a succession certificate without producing a certificate from the Controller under Section 56(2), arguing that no estate duty was payable due to the bar imposed by Section 73A. The court held that the provisions of Section 56 were mandatory and did not admit any exceptions. Therefore, no grant of representation or succession certificate could be made without producing the required certificate from the Controller, even if the proceedings for estate duty were barred by Section 73A.

5. The role of voluntary submission of accounts by the accountable person:

The revenue argued that the voluntary submission of accounts by the petitioner should be regarded as valid and that the Assistant Controller had jurisdiction to issue a notice under Section 58. The court, however, emphasized that the voluntary submission of accounts did not confer jurisdiction upon the Assistant Controller to initiate proceedings barred by Section 73A. The court held that the statute's bar on initiating proceedings could not be circumvented by the voluntary actions of the accountable person.

Division Bench Judgment:

The Division Bench considered the same issues and reversed the Single Judge's decision. The Bench held that Section 73A did not apply to proceedings initiated under Section 56, which were for the benefit of the applicant seeking a grant of representation or succession certificate. The Bench emphasized that the limitation period in Section 73A was intended to bar the initiation of proceedings by the department under Section 59, not those initiated by the accountable person under Section 56. Consequently, the appeal was allowed, and the orders under appeal were set aside.

In summary, the Single Judge's decision emphasized the statutory bar imposed by Section 73A on initiating proceedings after five years from the date of death, while the Division Bench held that Section 73A did not apply to proceedings initiated under Section 56 for obtaining a grant of representation or succession certificate.