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Issues: Whether penalty under section 60(1)(c) of the Estate Duty Act, 1953 could be imposed for non-disclosure of property which, though deemed to pass on death under section 12 of the Estate Duty Act, 1953, was not the property of the deceased in the ordinary legal sense.
Analysis: Section 12 creates a legal fiction by treating settled property, in which the settlor had reserved an interest, as property deemed to pass on death; it does not alter the fact that title had already passed to the settlee. Section 60(1)(c), by contrast, is confined to concealment or inaccurate particulars of the property of the deceased. A penal provision cannot be enlarged by the wording of the return form, and the obligation to disclose property deemed to pass under section 12 cannot be converted into concealment of the deceased's property. The analogy of the income-tax penalty provisions was also accepted: where the statute speaks of an assessee's own income, penalty cannot be imposed for omission of income statutorily deemed assessable in his hands but not truly his income.
Conclusion: Penalty under section 60(1)(c) was not attracted to the property covered by section 12, and the accountable person was not liable to be penalised.
Final Conclusion: The reference was answered in favour of the accountable person, and the imposition of penalty was held unsustainable.
Ratio Decidendi: A penal provision limited to concealment of the deceased's property cannot be extended to property which is only fictionally deemed to pass on death under a deeming clause, because legal fiction for assessment does not convert that property into the deceased's property for penalty purposes.
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