SMT. SITADEVI v. COMMISSIONER OF INCOME TAX.
IT Ref. No. 11 of 1995, decided on July 26, 1996.
HIGH COURT OF MADHYA PRADESH : INDORE BENCH
S. K. KULSHRESTHA, J. :
The Tribunal, Indore Bench, Indore, has referred the following question at the instance of the accountable person, arising out of the order of the Tribunal, dt. 19th October, 1994, in EDA No. 9/Ind/1989, for the opinion of this Court :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the proceedings under the ED Act had commenced within five years of the death of the deceased because a notice under section 55 of the said Act had been issued and served on the accountable person and the issue of such notice saves the bar of limitation created by section 73A of the said Act.”
2. One Shri Hiranand expired on 30th July, 1981. The Asstt. CED issued a notice under section 55 of the ED Act, 1953 (hereinafter referred to as the Act), on 19th December, 1983, to Smt. Sitabai, accountable person, to make compliance by 20th January, 1984. Smt. Sitabai failed to comply with the notice and eventually Asstt. CED issued notice under section 55 on 5th June, 1987, requiring her to deliver account of the property by 26th June, 1987. The accountable person requested for extention of 15 days on 22nd June, 1987, but still no account of the estate was filed. The Asstt. CED, therefore, completed the assessment under section 58(4) on 14th July, 1987, determining the net principal value of the estate passing on the death of the deceased at Rs. 3,76,350.
3. An appeal was preferred to the ACED and it was contended that the Asstt. CED could not have initiated proceedings after expiry of the period of 5 years prescribed by section 73A of the Act. Since the death had taken place on 30th July, 1981, notice under section 59 issued on 5th June, 1987, was beyond the period of limitation. The Asstt. CED annulled the assessment holding that the same was invalid as barred by limitation.
4. The Revenue filed an appeal before the Tribunal and the Tribunal held that the assessment framed by the Asstt. CED was not barred by limitation as the notice under section 55 stood issued and served before the expiry of 5 years from the date
of the death of the deceased. The decision of the Calcutta High Court in the case of Asstt. CED vs. Ashok Singh (1980)
124 ITR 587 (Cal) was also distinguished by the Tribunal. The accountable person, therefore, filed an application under
section 64(1) of the Act to refer the question of law arising out of the said order of the Tribunal and hence, the aforesaid question has been referred for the opinion of this Court.
5. We have heard the parties and perused the record.
6. The main contention raised on behalf of the accountable person was on the basis of the decision of the Calcutta High
Court in Asstt. CED vs. Ashok Singh (supra) which has been reversed by the Supreme Court in appeal in the decision Ashok Singh vs. Asstt. CED (1992) 104 CTR (SC) 330 : (1992) 196 ITR 160 (SC). In the said case, their Lordships have considered the decision of the Allahabad High Court in Padampat Singhania & Ors. vs. CED (1980) 16 CTR (All) 114 : (1980) 122 ITR 162 (All) as also another decision of the Allahabad High Court in CED vs. Bhola Dutt (1981) 24 CTR (All) 114 : (1981) 130 ITR 468 (All) with approval. In Padampat Singhania vs. CED (supra) their Lordships have observed :
“In the present case, however, we think that it is not necessary to decide the question as to when proceedings for levy of estate duty commence under the ED Act for reasons to be stated hereafter. As noticed earlier, Smt. Usha Devi filed a return on 16th August, 1963, in response to a request made by the Department. Although the provision under which the request was made to Smt. Usha Devi has not been stated in the order of the Tribunal or the Appellate Controller, it is apparent that such a request could be made only under section 55, for, it is under this provision that the Controller can ask an accountable person, and certain other categories of persons to deliver a statement of particulars and accounts, etc., which may be required by the Controller relating to any property which in his opinion formed part of an estate in respect of which estate duty was leviable. As the return was filed on 16th August, 1963, the request to do so on behalf of the Department must have been made earlier. Thus, the request on behalf of the Department, which in the circumstances is referable to section 55, was made such before the expiry of five years from the date of the death of Shyam Hari Singhania. Now, a requisition under section 55 is made for purposes of valuing the estate of the deceased for purposes of levy of estate duty. The word “levy” has been interpreted by the Supreme Court in the case of Asstt. Collector of Central Excise vs. National Tobacco Co. of India Ltd. AIR 1972 SC 2563, as embracing within it the process of assessment and also the imposition of tax. The requisition made under section 55 is one for assessing the value of the estate of the deceased. Once such as requisition has been made from an accountable person proceedings for levying estate duty can be said to have been started by the Asstt. Controller. On this view the estate duty proceedings were not barred by limitation.”
7. Yet in another decision, the Allahabad High Court in CED vs. Manorama Devi (1980) 123 ITR 322 (All), has observed as under :
“So far as the first question is concerned the deceased died on the 23rd of September, 1959, and a notice on the accountable person was served on the 5th of March, 1963. In ED Ref. No. 11 of 1977, decided on 26th September, 1979, Padampat Singhania vs. CED (1980) 16 CTR (All) 114 : (1980) 122 ITR 162 (All), we have held that a notice under section 55 starts proceedings under the Act, and if it has been done before the expiry of five years after the death, the bar of limitation created by section 73A is saved. As the notice under section 55 was given and served before the expiry of the period of five years, which in the present case was the 22nd September, 1964, the proceedings for levy of estate duty were validly commenced within limitation.”
8. In the present case, it is not disputed that notice under section 55 of the Act was issued on 19th December, 1983, well within the period of 5 years prescribed by section 73A of the Act. The reliance placed by the learned counsel in the decision of the Allahabad High Court in CED vs. Bhola Dutt (supra) is misplaced inasmuch as the said decision is distinguishable on facts. In the said decision, their Lordships have considered a case where the proceedings were sought to be commenced on the basis of the return filed by the accountable person voluntarily after the expiry of the period of limitation of 5 years laid down by section 73A. It was in a situation where the return itself had been filed after 5 years of the death of the deceased, their Lordships have held that the Asstt. Controller had no jurisdiction to commence the proceeding on the basis of such a voluntary return. In the present case, the proceedings stood commenced with issuance of the notice under section 55 of the Act which was well within the prescribed period of 5 years.
9. In this view of the matter, the learned Tribunal was right in holding that the proceedings under the Act had commenced within 5 years of the death of the deceased because a notice under section 55 of the Act had been issued and served on the accountable person within the limitation prescribed by section 73A of the Act.
10. The question is, therefore, answered against the accountable person and in favour of the Revenue.