9911796707
TMI Blog1971 (11) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... res 24 guntas, and 8 acres 23 guntas, situated in Moosapet village, belonging to one Rashid Shappor Chenai, were, during his lifetime, acquired for the synthetic drugs project by the Andhra Pradesh Government by notifications dated June 19, 1961, and January 18, 1962, issued under the Land Acquisition Act. Awards fixing compensation for those lands were made by the Special Deputy Collector on March 31, 1963. Compensation was received by Rashid Shapoor Chenai during his lifetime. Later, two more parcels of land measuring 131 acres 10 guntas, and 224 acres 24 guntas situated at Qutbillapur in Medchal Taluk, were acquired by the Andhra Pradesh Government for Hindustan Machine Tools, Units I and II, by notifications dated November 1, 1963, and February 1, 1964, issued by the Government under the Land Acquisition Act. Possession of those lands was taken by the Government on December 4, 1963, and between 13th and 15th March, 1964, respectively. Awards were made by the Special Deputy Collector in respect of those lands on March 12, 1965, and March 19, 1965. The compensation awarded by the Special Deputy Collector for the total extent of the land at Qutbillapur was Rs. 4,29,360.68. Rashi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above said lands, the Assistant Controller of Estate Duty issued notice dated November 14, 1969, to the petitioner, requiring her to show cause why the mistake apparent from the record should not be rectified under section 61 of the Act and the enhanced compensation included in the principal value of the estate ? In this writ petition, the petitioner challenges the legality and validity of that notice, on the following grounds: 1. the notice issued by the Assistant Controller of Estate Duty under section 61 of the Act for rectification of the alleged mistake is without jurisdiction; 2. the enhanced compensation which became payable to the legal heirs of the deceased was not the property of the deceased which passed at the time of his death; 3. for the first time a right was created in favour of the legal heirs of the deceased by virtue of the orders of the courts passed long after the death of the deceased, to receive enhanced compensation. It is not open to the department to relate back this property to the time when the deceased died, because there was no legal right created in favour of the deceased or his legal heirs at the time of death of the deceased to receive t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned counsel appearing for the revenue contended to the contra and supported the order of the Assistant Controller of Estate Duty. In order to appreciate the contentions raised by the learned Advocate-General, it is necessary to refer to section 61 of the Estate Duty Act, under which the impugned notice has been issued. Section 61 reads thus: "At any time within five years from the date of any order passed by him or it, the Contioller, the Appellate Controller or the Appellate Tribunal may, on his or its own motion, rectify any mistake apparent from the record and shall, within a like period, rectify any such mistake which has been brought to the notice of the Controller, the Appellate Controller, or the Appellate Tribunal, as the case may be, by the person accountable: Provided that no such rectification shall be made which has the effect of enhancing the estate duty payable, unless the person accountable has been given a reasonable opportunity of being heard in the matter." A reading of the above section makes it manifest that the above section gives power to (1) the Controller of Estate Duty, (2) The Appellate Controller of Estate Duty, and (3) the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the valuation of the lands had become final and conclusive. From a reading of section 61 of the Estate Duty Act, it is clear that the authority which could rectify an order is the authority which passed the order, and not any higher authority. If any authority is required for that purpose, we find it in Abdul Rahiman Sait v. Income-tax Officer, Alleppey. That was a case arising under section 35 of the Indian Income-tax Act, 1922, the language of which is similar to the language of section 61 of the Estate Duty Act. The decision taken by the Assistant Controller of Estate Duty regarding the valuation of those lands had become final and conclusive, because that was not the subject-matter of appeal either before the Appellate Controller or before the Income-tax Appellate Tribunal. It is, therefore, evident that only one order has been passed with regard to the valuation of the lands in question, and that is the order of the Assistant Controller of Estate Duty. The alleged mistake which is now sought to be rectified is in the valuation of the said lands. Since the alleged mistake has occurred in the order passed by the Assistant Controller of Estate Duty, which was not the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose which are "apparent from the record" and not merely the arithmetical or clerical errors. There can be no doubt that a clerical or an arithmetical error would amount to a mistake apparent from the record. It is immaterial as to how the mistake occurred, or who was responsible for it. A mistake apparent from the record is a mistake that is manifest, plain or obvious, a mistake that can be realised without a debate or dessertation. A mistake which can be discovered by a process of elucidation or argument or a debate, cannot be considered to be a mistake apparent from the record. The scope of the expression "mistake apparent from the record" is much wider than the expression "mistake apparent on the face of the record". It is not merely an error of fact that can be rectified under this section, but also obvious mistakes of law. A mistake in valuation of a property included in the account can be rectified under section 61 of the Act. There is nothing in the section which prevents rectification of a mistake in valuation apparent from the record, even if the valuation is a subject-matter of appeal under the Act. In Asok Textiles case it was observed that: "The restrictive operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n only the order of assessment, but it comprises all proceedings on which the assessment order is based and the Income-tax Officer is entitled for the purpose of exercising his jurisdiction under section 35 of the Act to look into the whole evidence and the law applicable to ascertain whether there was an error. If he doubts the written down value of the previous year, it is open to him to check up the previous calculations and if he finds any mistake, it is open to him to make fresh calculations in accordance with the law applicable including the rules made thereunder." Their Lordships further observed at page 358 that: "A mistake contemplated by this section is not one which is to be discovered as a result of an argument but it is open to the Income-tax Officer to examine the record including the evidence and if he discovers any mistake he is entitled to rectify the error provided that if the result is enhancement of assessment or reducing the refund then notice has to be given to the assessee and he should be allowed a reasonable opportunity of being heard." Rejecting the argument that the record must be the assessment record of the relevant assessment year and not the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the company of the previous year, ended on September 30, 1945, as computed for income-tax purposes for the assessment year 1946-47 and reduced by the amount of income-tax and super-tax payable by the company in respect thereof, shall be deemed to have been distributed as dividends amongst the shareholders as at the general body meeting held on March 11, 1946. The Income-tax Officer then issued a notice to Navinchandra under section 22(2) of the Income-tax Act for assessing him to income-tax as a non-resident on interest and dividend deemed to have been received in Phalton State for the year ending December 31, 1946. The Income-tax Officer accepted the contention of Navinchandra that 10 shares of the aforesaid company, although nominally stood in his name, really belonged to the firm of which he was the partner. The Income-tax Officer then determined the total world income of Navinchandra at Rs. 19,75,328 which included Rs. 18 interest and Rs. 8,528 being the 5/16th share in the dividend deemed to have been distributed under section 23A of the Indian Income-tax Act of 1922, from the profits of the company for the year ending September 30, 1945, received through the firm. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... look at the order of assessment alone and nothing else. All proceedings which constitute evidence on which the assessment order is passed must be regarded as the record for the purpose of section 35. We are also unable to hold that the Income-tax Officer is prohibited from looking at the evidence to ascertain whether an error has been committed." The court further observed that: "The jurisdiction of the Income-tax Officer under section 35 of the Act is only to rectify a mistake which is 'apparent from the record' and is not restricted to rectification of mistakes which are clearly clerical or arithmetical. The expression 'apparent from the record' should not be equated with the expression 'apparent on the face of the record'. The mistake to be rectified should, however, be a mistake 'patent on the record' and not a mistake which may be discovered by a process of elucidation, argument or debate." As held by the Supreme Court in Sidhramappa Andannappa Manvi v. Commissioner of Income-tax, the court further held that, in ascertaining whether there was an error apparent from the record, the Income-tax Officer must not confine himself to the order of assessment of the assessee alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act." Thus, from the aforesaid discussion, it emerges that for ascertaining a mistake which could be rectified under section 35 of the Income-tax Act, the Income-tax Officer can look not only at the assessment order of the relevant assessment year, but also the assessments of the assessee made in other years, and also into all proceedings which constitute evidence and material on which the assessment order is based. The expression "apparent from the record" cannot be equated to the expression "mistake apparent on the face of the record". For rectifying a mistake under section 61 of the Estate Duty Act, similar to section 35 of the Indian Income-tax Act, 1922, it must be a mistake and not a mere change of opinion. In Ethel Rodrigues v. Assistant Controller of Estate Duty, Hegde J. (as he then was), speaking for the Mysore High Court, held that: "Where the Controller has made his own valuation of the estate of a deceased person under section 36 of the Estate Duty Act, 1953, he has no jurisdiction to rectify the assessment under section 61 on the ground that the estate has been taken at an enhanced value in the probate proceedings. By taking the enhanced value put upon the esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assistant Controller of Estate Duty, in the instant case, merely accepted the value of the lands of the deceased that were acquired by the Government under the Land Acquisition Act, which was determined by the Special Deputy Collector in his awards made in respect thereof. The accountable person had no objection to the Assistant Controller of Estate Duty adopting the figures of compensation awarded by the Special Deputy Collector in his awards in respect of these lands; that is to say, the Assistant Controller of Estate Duty did not estimate the market value of the lands on the date of death of the deceased, but merely accepted the figures of compensation awarded by the Special Deputy Collector in respect of those lands. If the Assistant Controller of Estate Duty had not accepted the values of the properties as shown in the awards, or the returns filed by the accountable person but had estimated their values, then he would have no jurisdiction to further correct those values with reference to the awards passed by the civil court, on references made to it. In such a case, it would have been a change of opinion, and not a mistake apparent from the record. The valuation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the Special Deputy Collector in respect of Qutbullahpur lands was enhanced by the civil court by Rs. 20,45,000 and the compensation for Moosapet lands, by Rs. 1,90,000. Obviously, these figures show that the values adopted by the Assistant Controller of Estate Duty were not their correct market values on the date of acquisition of the lands, or on the date of the death of the deceased. No reasonable person could have come to a different conclusion on the basis of those figures. The last argument that was addressed by the learned Advocate-General was that the right to receive "extra compensation" was, at best, a claim and an inchoate right and was not "property" to which section 5 of the Estate Duty Act was applicable and when it was not "property" which passed on the death of the deceased and the charging section 5 of the Act was not attracted, there was no mistake apparent from the record which could be rectified under section 61 of the Act. In this connection, the learned Advocate-General relied upon a decision of this court in Khan Bahadur Ahmed Alladin Sons v. Commissioner of Income-tax. We have elaborately discussed this question in the connected Writ Petition No. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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