1972 (12) TMI 26 - HC - Income Tax

Estate Duty Act, 1953 - In the writ petition the petitioner has prayed for the issue of a writ of certiorari to quash the order of the Assistant Controller of Estate Duty, dated May 21, 1966 - authorised representative who had authorisation granted during assessment proceedings appeared during rectification proceedings - Whether the authorisation holds good for subsequent rectification proceedings also

Summary

Issues Involved:
1. Whether there was a "mistake apparent from the record" justifying rectification under section 61 of the Estate Duty Act, 1953.
2. Whether proper service of notice was given to the accountable person as required under section 61.
3. Whether the accountable person was given a reasonable opportunity of being heard.
4. Whether the appeal against the order under section 61 was competent.

Detailed Analysis:

1. Mistake Apparent from the Record:
The petitioner contended that there was no "mistake apparent from the record" within the meaning of section 61 of the Estate Duty Act, 1953. The court examined the facts and found that the Assistant Controller of Estate Duty initially allowed a deduction of Rs. 1,46,506 for the deceased's income-tax and excess profits tax liabilities. However, after a settlement, the actual amount due was determined to be Rs. 30,000. The court noted that this settlement was legally binding and reduced the tax liability of the deceased. Therefore, the initial deduction of Rs. 1,46,506 was a mistake apparent from the record, which the Assistant Controller was entitled to rectify under section 61.

2. Proper Service of Notice:
The petitioner argued that there was no proper service of notice as required under section 61. The court found that notice was sent to both the accountable person in Ceylon and their authorized representatives, Messrs. Suri & Co. The authorized representatives received the notice and requested time to furnish a reply. The court noted that the authorization given to the chartered accountants was in connection with all proceedings under the Estate Duty Act, 1953, and they had previously represented the petitioner in rectification proceedings. Therefore, the court concluded that the chartered accountants had the necessary authority to receive the notice and represent the petitioner.

3. Reasonable Opportunity of Being Heard:
The petitioner also claimed that they were not given a reasonable opportunity of being heard. The court examined the timeline and found that the notice was served on January 19, 1966, and the hearing was fixed for January 25, 1966. The chartered accountants requested time till February 15, 1966, but the Assistant Controller could not comply due to the five-year limitation period for rectification. The court concluded that given the circumstances, including the petitioner's knowledge of the settlement, the petitioner had a reasonable opportunity to be heard.

4. Competency of Appeal:
The petitioner contended that the appeal against the order under section 61 was competent. The Appellate Controller and the Tribunal both held that no appeal lies against an order under section 61. The court noted that the Tribunal had correctly concluded that section 61 was properly invoked and that there was a mistake apparent from the record. The court agreed with the Tribunal's finding that the appeal was incompetent.

Conclusion:
The writ petition was dismissed, and the court refrained from answering the question referred in the tax reference case, returning it to the Tribunal. The respondent was entitled to costs in T.C. No. 59/71, while no order as to costs was made in the writ petition.