9911796707
TMI Blog1994 (8) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... er is perverse and contrary to facts and law ? " The facts of the case, not in dispute, are that Sri K. C. Lahiri expired on July 1, 1960. The accountable person under the Act, namely, Sri Sudhir Kumar Lahiri, the respondent herein, after expiry of the statutory period prescribed for the purpose, submitted to the Controller of Estate Duty an account of the properties in respect of which the estate duty was paid, as required by section 53 of the Act. It is also not in dispute that the accountable person had applied for extension of time for filing the return, which was allowed by the Controller. The return was filed on November 30, 1967, whereas the same should have been filed within six months of the death of the deceased, which took place on July 1, 1960. The assessment was completed by the Assistant Controller of Estate Duty on March 11, 1977, on which date he also issued a notice under section 60(2) of the Act for late filing of the return. By order dated July 9, 1977, the Assistant Controller modified his order under section 61 of the Act finding that though on the application of the accountable person extension of time was allowed for filing the return, no interest had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which could be discovered only by a process of elucidation, argument or debate. Such mistakes cannot be rectified under section 61 of the Act, since only a mistake of law or fact which was obvious and plain could be rectified under the aforesaid section. It, therefore, held that the mistake sought to be rectified by the Assistant Controller was not an obvious, patent, glaring or plain mistake, and, therefore, the rectificatory order deserved to be set aside. The Revenue preferred an application before the Tribunal for stating a case to the High Court for its opinion, but the said application was rejected by the Tribunal by its order dated February 27, 1981. The Revenue thereafter moved this court for a direction to the Tribunal requiring it to state a case before this court. That application was allowed and by order dated March 30, 1984, this court directed the Tribunal to state a case and refer two questions of law for the opinion of this court under section 64 of the Act. Accordingly, the Tribunal has stated a case before this court framing two questions of law for its opinion, which have been reproduced earlier. On behalf of the Revenue, it was urged that the failure on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate to be the amount of estate duty payable ; (c) the person accountable shall pay interest for the period by which the original period of six months has been extended, on the amount specified in clause (e) or on such lower amount as the Controller may in his discretion decide ; (d) the rate of interest shall be six per cent. per annum : Provided that the Controller may, in any particular case, specify such reduced rate of interest as may be appropriate to that case in accordance with the general instructions issued by the Board in this behalf ; (e) the amount referred to in clause (c) shall be the excess, if any, of the duty determined under section 58 or section 69, as the case may be, over the amount, if any, actually paid under clause (b) of this rule ; (f) if the duty determined under section 58 is reduced in appeal, the interest shall be recomputed with reference to the duty as so reduced and if the interest already paid exceeds the interest so recomputed, the excess shall be refunded." The rule, therefore, prescribes the rate of interest at six per cent. per annum, but with a discretion to the Controller in any particular case to specify a reduced rate of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiate rectification proceedings and levy penal interest, since the omission on his part at the time of the original assessment was an error apparent from the record, because the relevant provision of penal interest was a mandatory provision of law. Reliance was also placed upon the decision in the case of Golecha Properties (P.) Ltd. v. CIT [1988] 171 ITR 47 (Raj). That was again a case under the Income-tax Act. On a reading of the provisions of the Act, their Lordships of the Rajasthan High Court came to the conclusion that the liability for payment of interest under the Act and the Rules was incurred automatically in the event of default by the assessee specified therein. That being so, the question of giving any show cause notice prior to fixing the liability for payment of such interest by an order did not arise. The liability for interest was attracted automatically by operation of law without the further requirement of any order to that effect. The order merely quantified the amount of interest. Even if the Income-tax Officer had power to reduce, or even waive the interest, at the instance of the assessee, if good cause was shown for the same by the assessee, such reduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision without taking note of the aforesaid Explanation to rule 1 in Schedule II was undoubtedly a ground for rectification. The Tribunal's power to rectify its order under the Act flows from section 13 of the Act. A mistake apparent from the record is made a ground for rectifying the order. The first question was, thus, rightly answered in favour of the Revenue and against the assessee. " These decisions, to my mind, fully support the view that I have taken. The failure of the Assistant Controller to pass an order for payment of interest mandatorily chargeable under section 53 of the Act read with rule 42 of the Rules, furnished adequate justification for him to exercise the power of rectification under section 61 of the Act. His order disclosed a patent mistake, a mistake apparent from the record, as the failure to pass an order by the Assistant Controller was occasioned by his failure to notice the mandatory provisions of the Act and the Rules. I am, therefore, satisfied that the Assistant Controller was justified in exercising his power under section 61 of the Act rectifying the order of assessment made by him, and including interest chargeable under section 53 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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