9911796707
TMI Blog1985 (6) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... pose to set out briefly our reasons for the order which we propose to pass. The facts: One Hemant B. Mafatlal died on August 16, 1971. On March 28, 1974, an assessment of his estate was made for the purpose of estate duty. The matter was carried in appeal to the Appellate Controller of Estate Duty who disposed it of by an order dated March 17,1975. Thereafter an appeal was preferred to the Appellate Tribunal which passed its order thereon on August 26, 1977. We are not concerned with this order of the Tribunal. However, on November 5, 1976, that is, after the order of the Appellate Controller and before the order of the Tribunal, appellant No. 2, First Assistant Controller of Estate Duty, issued a notice to the respondents under section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petition. The learned trial judge took the view that the opinion of an internal auditor of the Income-tax Department on a point of law could not be regarded as information within the meaning of section 147(b) of the Income-tax Act, 1961. He took the view that the same was the position under section 59(b) of the Estate Duty Act, and, in view of this, he came to the conclusion that there was no valid justification for reopening the assessment. In the result, Bharucha J. quashed the said notice dated November 5, 1976, issued by the appellant No. 2 under section 59(b) of the Estate Duty Act and restrained the appellants from taking any proceedings to enforce the same. It is the correctness of this decision of the learned trial judge which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required for the purpose. In the present case, an internal audit party of the Income-tax Department expressed the view that the receipts from the occupation of the conference hall and rooms did not attract section 10 of the Act and that the assessment should have been made under section 9. While sections 9 and 10 can be described as law, the opinion of the audit party in regard to their application is not law. " This decision lays down that a note of an audit party or an auditor which conveys information as to certain provisions of law can be regarded as information within the meaning of section 147(b) of the Income-tax Act, but in so far as the audit note contains an opinion on the interpretation of certain provisions of law or their a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 59(b) of the Estate Duty Act again shows that the reason given is that the said shares should have been rightly valued according to the provisions of section 37 of the Estate Duty Act. The reason No. 5 set out in the said letter contains reference to instruction No. 771 dated October 29, 1974, issued by the Central Board of Direct Taxes, after consultation with the Ministry of Law, Government of India, on the scope of section 37 of the Estate Duty Act. It is nowhere set out in the said letter that the Assistant Controller of Estate Duty was not aware, at the time when the original assessment was made, of the provisions of section 37 of the Estate Duty Act. The audit note on the basis of which reopening of the assessment is so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restrictive provisions as to the alienation of shares. The circular dated March 26, 1968, being Circular No. L-D/ED of 1968, provides that the value of assets forming part of the dutiable estate of deceased individual for the purposes of estate duty should be taken at the same value as was determined for the purpose of wealth-tax in the year referred to in the circular. It was as a result of this circular which operated at the time when the original assessment was made that the shares of the aforesaid companies were valued according to the provisions of rule ID of the Wealth-tax Rules. The said circular pointed out that it was decided by the Board that the basis of valuing an asset for estate duty should be the same as the basis adopted for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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