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TMI Blog1971 (11) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ossession 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. Rashid Shapoor Chenai died on November 4, 1963. The petitioner, who is the widow of the deceased and the "accountable person" under the Estate Duty Act, filed under section 53(3) of the Estate Duty Act (hereinafter called "the Act") an account of the properties passed on the death of the deceased, Rashid Shapoor Chenai. The estate duty assessment was completed by the Assistant Controller of Estate Duty on March 29, 1966. With regard to the lands acquired during the lifetime of Rashid Shapoor Chenai and after, their value was taken at the figures of compensation awarded for them by the Special Deputy Collector and on that basis the estate duty assessments were made by the Assistant Controller of Estate Duty under section 58 of the Act. Aggrieved by the assessment made by the Assistant Controller of Estate Duty, the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the enhanced compensation as determined by the courts in the proceedings subsequently taken; and 4. when on the enhanced compensation awarded after the death of the deceased, estate duty is not leviable, under section 5 of the Estate Duty Act, there was no mistake apparent from the record with could be rectified under section 61 of the Act. On these grounds, the petitioner seeks a writ of prohibition or direction against the respondent for a declaration to the effect that the impugned notice is invalid and illegal, and for a direction restraining the Assistant Controller of Estate Duty from taking proceedings in pursuance of that notice. The learned Advocate-General, appearing for the petitioner, raised the following contentions: (1) rectification of a mistake, if any, should have been made not by the Assistant Controll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Appellate Tribunal, to rectify any mistake apparent from the record in their respective orders, within five years from the date of their respective orders. The power of rectification could be exercised by the aforesaid officers or the authorities either suo motu or at the instance of the accountable person. If, however, the proposed rectification has the effect of enhancing the estate duty payable, the officer or the authority concerned cannot rectify the assessment order unless he or it has served a notice upon the accountable person and has given him a reasonable opportunity of being heard. In the instant case before us, the estate duty assessment was completed on March 29, 1966, and the impugned notice for rectification of the alleged mistake apparent from the record was issued by the Assistant Controller of Estate Duty, under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 subject-matter of appeal either before the Appellate Controller or before the Income-tax Appellate Tribunal, it was the Assistant Controller of Estate Duty alone that could rectify such a mistake. The decision of the Calcutta High Court in Indra Co. Ltd. v. Income-tax Officer, to which our attention has been invited, does not help the accountable person. In that case, the loss that was claimed was not only the subject-matter before the Income-tax Officer but was also before the Appellate Assistant Commissioner in appeal. The computation of the loss as determined by the Appellate Assistant Commissioner was sought to be rectified on the ground that there was a mistake in the computation of such loss. In those circumstances, K. L. Roy J. has rightly observed that: "...where the assessment order has been the subject of an appeal and the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 operation of the power of review under Order 47, rule 1, Civil Procedure Code, is not applicable in the case of section 35 of the Act..." Since the language of section 35 of the Indian Income-tax Act, 1922, is in pari materia with the language of section 61 of the Estate Duty Act, it follows from the above ruling that the restrictive operation of the power of review under Order 47, rule 1, of the Civil Procedure Code is not applicable to the cases of rectification of mistakes under the taxing statutes. In Maharana Mills (Private) Ltd. v. Income-tax Officer, Porbandar the learned judges of the Supreme Court, dealing with the case of rectification of a mistake under section 35 of the Indian Income-tax Act of 1922, observed that: "The power under section 35 is, no doubt, limited to rectification of mistakes which are apparent from the record. The m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled 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 assessment record of other years, the Supreme Court observed that: "A fortiori if he discovered that the very basis of the different assessments was erroneous because of an initial mistake in determining the written down value could it be said that this would not be a mistake apparent from the record. And if in order to determine the correct written down value the Income-tax Officer makes correct calculations, can it be said that that is not rectifying a mistake apparent from the record but is de hors it." Thus the distinction, their Lordships observed, "was a distinction without a difference". The next case which explains the meaning of the word "record" is Arvind N. Mafatlal v. Income-tax Officer, North Satara. In order to appreciate the contentions raised therein, and the view of law expressed by the Bombay High Court in that case, we may have to kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 total income of Navinchandra in the Phalton State was thus determined at Rs. 8,546. The amount of Rs. 8,528 which was taken as the share of dividend of the company was presumably arrived at by the Income-tax Officer as 5/16 of the dividend on 40 shares held by the firm out of the total 100 shares of the company in respect of the net income of Rs. 68,228, which was deemed to have been distributed as dividend under section 23A of the Act. On April 13, 1954, the Income-tax Officer served a notice on Navinchandra intimating that the dividends deemed to have been distributed under section 23A of the Act in respect of the shares of the company held by Navinchandra had been taken at Rs. 8,528 net for the assessment year 1947-48 under the Phalton State law without being grossed up, though credit for the tax deemed to have been paid by them had been given credit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 alone. All proceedings which constitute evidence on which the assessment order is based must be regarded as record for the purposes of section 35. The Income-tax Officer is not prohibited from looking at the evidence in ascertaining whether an error has been committed. However, on facts, the court held that the benefit of credit of tax under section 18(5) and the corresponding grossing up under section 16(2) were available only to the registered shareholder and not to the real owner of the shares. Viewed thus, the High Court held that there was no mistake apparent from the record which could be rectified under section 35. However, we are not concerned with the result of that writ proceeding. The above decision of the Bombay High Court was upheld by the Supreme Court in Income-tax Officer, North Satara v. Arvind N. Mafatlal. In Lala Rajeshwar Pershad v. Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 estate in the probate proceedings he cannot be said to rectify any mistake apparent from the record of the estate duty assessment but he would be changing his opinion about the valuation of the estate because some other authority has valued the estate differently. For the purpose of section 61, the only record that the assessing authority can look into is the record relating to the assessment of estate duty and not any other record such as the record in the probate proceedings which is not relevant. For the purpose of enhancing the value of an estate on the basis of the value taken in the probate proceedings, the Controller has to invoke the provisions of section 59 and proceed to reassess and for such a reassessment the bar provided in section 73A will operate." It is clear from the above decision that only a mistake in the assessment order could be rectified under section 61 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson 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 the lands was based on the award, and that award, by reason of the references made to the civil court, stood modified. The fact that the award passed by the Special Deputy Collector was modified by the civil court on a reference made to it under section 18 of the Land Acquisition Act, forms part of the record, from which the mistake discovered by the assessing officer is apparent. Awards were thus materials or pieces of evidence on which the assessment order was based. The Assistant Controller of Estate Duty had, therefore, jurisdiction to rectify such a mistake under section 61 of the Estate Duty Act. The next question that may have to be considered is whether the mistake in this case has been discovered by a long-drawn argument or debate, or is one which is obvious and patent from the record. In this connection, the learned Advocate-General, appearing for the petitioner, relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 54 of 1970. For the reasons given therein, which we may briefly state here, we hold that the decision relied upon by the learned Advocate-General does not render any assistance to him in this case. By the nature of acquisition proceedings under the Land Acquisition Act, the owner of the lands acquired by the Government gets a right to receive compensation for those lands at their market value on the date of acquisition. The right of the owner, whose lands have been acquired by the Government, springs directly from the acquisition of the lands by the Government. It is an indivisible right. There are no two rights, one to receive the compensation and the other to receive extra compensation. The legal heir, i.e., the accountable person in this case, has not received compensation in her own individual right but has received the compensation in respect of the lands belonging to the deceased a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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