1988 (3) TMI 127 - AT - Income Tax

Summary

Issues:
- Appeal challenging order of Appellate Controller of Estate Duty under section 61 of the Estate Duty Act, 1953 regarding exemption claim under section 33(1)(n) of the Act.

Analysis:
1. The deceased had a 1/2 share in a residential property, and the value was accepted in the assessment order. However, exemption under section 33(1)(n) of the Act was not claimed initially. An application was later filed to rectify this omission, but the Asstt. Controller of Estate Duty did not allow the exemption under section 61 of the Act, stating it was not claimed in the return.

2. The accountable person contested this decision, arguing that the statutory deduction should have been allowed. The Appellate Controller of Estate Duty dismissed the appeal, stating that the exemption was not claimed in the return or during the hearing, citing precedents where deductions not claimed or allowed were not considered mistakes apparent from records.

3. The appeal before the ITAT challenged this decision, with the accountable person reiterating their arguments. The department supported the previous decision, relying on legal precedents. The ITAT reviewed the case, noting that the exemption was not claimed in the return, but the mistake was rectifiable under section 61. The ITAT disagreed with the lower authorities and held that the failure to allow the exemption was a legal mistake, requiring rectification.

4. The ITAT emphasized that the assessing officer had a duty to follow the law and allow exemptions as per statute. Despite the exemption not being claimed initially, the officer should have rectified the error under section 61. The ITAT referred to a later case from Allahabad, emphasizing that overlooking mandatory legal provisions constitutes a mistake apparent on the face of the record.

5. Consequently, the ITAT allowed the appeal, setting aside the previous decision and remitting the matter back to the Asstt. Controller of Estate Duty for reconsideration of the exemption claim under section 33(1)(n) of the Act. The ITAT concluded by treating the appeal as allowed for statistical purposes.