Inclusion of the lineal descendant's shares for purposes of determining the rate of estate duty - conflicting decisions on constitutional validity - Income Tax - 533/CBDT

INSTRUCTION NO. 533/CBDT Dated : March 28, 1973 Section(s) Referred: 34(1)(c) Statute: Estate Duty Act The Madras High Court have, on a writ petition filed by Smt. V.Devaki Ammal held that section 34(1)(c) of the Estate Duty Act which provides for inclusion of the lineal descendant's shares for purposes of determining the rate of estate duty applicable to the estate of the deceased, is violative of Article 14 of the Constitution of India. The full text of the Judgment is awaited. The Kerela High Court, in the case of T.R.Jayasankar(1972)(83 ITR 445) have held that section 34(1)(c) of the Estate Duty Act is not violative of the Constitution. From the reports so far available it appears to the board that the Judgment of the Madras High Court in question may not be acceptable and an appeal to the Supreme Court may have to be authorised. In view of these conflicting decisions, the Board desire that the following steps be taken in respect of the estate duty cases involving this point:- 1) All the Assistant Controllers working in the charge may be informed of the decision of the Kerela High Court in the case of T.R.Jayasankar reported in 83 ITR 445. 2) The Assistant Controller of Estate Duty/Authorised Representatives may draw support from the decision of the Kerela High Court in the appeals before the Appellate Controller/Tribunal in all cases where the Accountable Persons rely on the decision of the Madras High Court in the case of Smt.V.Devaki Ammal. Attention may also be invited to the Judgment of the Supreme Court in the case of K.S.Venkataraman Co.(pvt)Ltd., Vs.State of Madras (60 ITR 112) wherein it has been held that the Tribunal and the tax authorities being creatures of the Act cannot pronounce upon the Constitutional validity or vires of any provision of the Act. 3. Appeals decided by the Appellate Controller/Tribunal against the department, if any, following the decision of the Madras High Court may be taken up in appeal/reference.