1996 (7) TMI 91 - HC - Income Tax

Estate Duty Proceedings Valid: Notice Served Within Limitation Period Upheld

Smt. Sitadevi Versus Commissioner Of Income-Tax

The Tribunal held that the proceedings were not barred by limitation as a notice under section 55 of the Estate Duty Act had been issued and served within ... Accrual Of Income, Assessment Year, Business Income, Charitable Trust, Question Of Law Issues:- Interpretation of the commencement of proceedings under the Estate Duty Act within the prescribed time limit.- Validity of assessment under section 58(4) of the Act.- Applicability of section 73A of the Estate Duty Act regarding the limitation period.Analysis:The judgment concerns a case where the accountable person challenged the initiation of proceedings by the Assistant Controller of Estate Duty after the expiry of the five-year limitation period following the death of the deceased. The Tribunal held that the proceedings were not barred by limitation as a notice under section 55 of the Estate Duty Act had been issued and served within the prescribed time limit. The accountable person relied on the decision of the Calcutta High Court in a specific case, which was subsequently reversed by the Supreme Court in a different case. The Supreme Court's decision emphasized that proceedings for levying estate duty can be considered initiated once a requisition under section 55 is made for assessing the value of the deceased's estate. This interpretation was supported by earlier decisions of the Allahabad High Court, reinforcing the view that the notice under section 55 marks the commencement of estate duty proceedings and saves the limitation period under section 73A.The judgment also highlighted a distinction from another case where proceedings were attempted to be initiated based on a return filed voluntarily by the accountable person after the expiration of the limitation period. In that scenario, the Assistant Controller was deemed to lack jurisdiction to commence proceedings. However, in the present case, the notice under section 55 was issued within the stipulated five-year period, establishing the valid commencement of proceedings. The Tribunal's decision was upheld, affirming that the proceedings had indeed commenced within the prescribed time frame due to the timely issuance and service of the notice under section 55 on the accountable person.In conclusion, the court ruled in favor of the Revenue, rejecting the accountable person's contention and affirming the validity of the proceedings initiated under the Estate Duty Act. The judgment clarified that the notice under section 55 served within the statutory limitation period constituted the valid commencement of estate duty proceedings, in line with the provisions of section 73A of the Act.