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TMI Blog1993 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... September 24, 1951. It was claimed by one of the accountable persons, namely, Madhusudan Das, that he had been adopted by Seth Jagannath Das as his son, a day prior to the death of his wife. After the death of his wife, Jagannath Das created a charitable trust by a registered deed dated March 17, 1952, under the name and style of "Seth Mannulal Jagannath Das Hospital Trust" and transferred his entire estate with certain reservations for his residence and maintenance as an obligation on the working trustee, Seth Narsinghdas. After the death of Seth Jagannath Das, on October 7, 1957, the working trustee, Seth Narsinghdas, claiming to be the accountable person filed an estate duty return under the Act, showing the principal value of the property passing on the death of Seth Jagannath Das as nil. The Assistant Controller of Estate Duty did not accept the return and applying the provisions contained in section 12 of the Act determined the value of the property at Rs. 23,33,410, as assessable to duty by his order of assessment dated April 3, 1972. Seth Narsinghdas, as working trustee, and accountable person went up in appeal. The Appellate Controller excluded part of the estate from levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Supreme Court in the matter of validity of the adoption and the creation of trust, the Assistant Controller of Estate Duty filed an application before the Tribunal under section 61 of the Act for rectification of the order which was passed by the Tribunal on February 28, 1979, on the assumption that part of the estate of Jagannath Das had already been transferred to the trust and he held only a limited extent of the estate on the date of his death, which alone was leviable to estate duty. The Bench of the Appellate Tribunal which heard the parties, on the question of rectification of the order of the taxing authorities, under section 61 of the Act, did not accept the contention advanced on behalf of the Assistant Controller of Estate Duty that the judgment of the Supreme Court in the adoption case was a valid justification for rectification of the order of the taxing authorities. In rejecting the application for rectification under section 61 of the Act, the Bench of the Tribunal held as under: "4. We have heard both the sides and considered the issues. After going through the judgment of the Supreme Court, it is not possible for us to agree that we can accept the plea o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een able to appreciate why the Revenue had so far failed to proceed under section 59 of the Act, on the basis of new information received from the judgment of the Supreme Court to correct the assessment made by the Assistant Controller of Estate Duty regarding the estate left by the deceased." The Department then made an application to the Tribunal for referring the questions of law to the High Court arising from the order of the Tribunal passed on the application under section 61 of the Act. The Tribunal having declined to refer the questions, the Department approached this court and this court in M.C.C. No. 19 of 1983 directed the Tribunal to refer the question under reference for the decision of this court. Shri V. K. Tankha, learned counsel appearing for the Revenue before us, contends that the judgment of the Supreme Court in the adoption case furnished a valid ground for seeking rectification of the order earlier passed by the taxing authorities in the matter of assessment and levy of estate duty on the properties passing on the death of Seth Jagannath Das. He argued that the learned Tribunal was wrong in holding that the judgment of the Supreme Court although binding on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciated the facts and contentions advanced by the parties, we are of the opinion that the two questions referred to us have to be answered in the negative and in favour of the Department. So far as question No. 1 is concerned, a bare reading of the judgment of the Supreme Court would show that the validity of adoption and the validity of creation of the trust were essentially subject-matters for decision before the Supreme Court in the civil litigation between Seth Jagannath Das and his adopted son, Madhusudan Das. It may be that in the Supreme Court, the argument mainly centred round the question of adoption and the Supreme Court, after appreciating the evidence on record, held that the finding reached by the trial court that a valid adoption did take place, was liable to be confirmed. The necessary legal consequence of the above finding was that Seth Jagannath Das could not have created a trust of the properties jointly held by him as coparcener with his adopted son, Madhusudan Das. The Supreme Court, therefore, confirmed the decree of the trial court in full, whereby the adoption was held valid and the creation of the trust was held void. The first question, therefore, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jection raised by one of the accountable person, Madhusudan Das, for seeking stay of assessment and levy of duty until finality of the civil litigation covering part of the property in question. The expression "mistake apparent from the record" used in section 61 of the Act, in the context and on a reasonable interpretation cannot be restricted to mean some mistake or error reflected from any of the documents on the record of the case. The pendency of civil litigation concerning the property in question was undoubtedly the subject-matter for consideration and came for discussion in the course of the assessment proceedings. Those proceedings were thus the subject-matter or part of the record of the assessment case. The Tribunal, from the portion of its order quoted above, had categorically reserved a right to Madhusudan Das, as an objector, to seek remedy by way of rectification as a remedial action, on the ultimate result of the civil litigation, to which he was a party. The final verdict in the civil litigation by the highest court of law had knocked out the very basis of assessment and levy of duty on a major part of the property in question. The verdict of the Supreme Court thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, the present case is stronger than the other case. The effect of the decision of their Lordships of the Supreme Court is that the levy of excess dividend tax was, at no time, good. The levy was invalid, and that being the true legal position, the order made by the Income-tax Officer was bad at its inception on the date it was made, and that was a mistake and to point out that mistake, no elaborate argument or debate is required, because there is the binding Supreme Court decision, clearly bringing out that mistake. The mistake, therefore, in our opinion, is a mistake apparent from the record, within the meaning of section 35 of the Act. The authorities concerned, i.e., the respondents were, therefore, clearly in error in not rectifying that mistake under section 35 of the Act." The decisions of the Supreme Court cited by Shri B.L. Nema, learned counsel appearing for the accountable person, are clearly distinguishable. The case of Mrs. Khorshed Shapoor Chenai [1980] 122 ITR 21 (SC) is on different facts and lays down a different law. In that case, rectification of the mistake in the original assessment was proposed to be undertaken on the ground that the initial valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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