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of <h1>Tribunal Upholds Natural Justice in Gift-Tax Case</h1> <h3>Gift-Tax Officer. Versus Smt. Rasheed Unnisa Begum.</h3> The tribunal dismissed the appeal in a gift-tax assessment case for the year 1966-67, where the donee was held liable for gift-tax without due process. ... Appellate Assistant Commissioner, Gift Tax Issues:1. Gift-tax assessment for the assessment year 1966-67.2. Allocation of gift-tax liability to the donee under section 29 of the Gift-tax Act, 1958.3. Validity of the order passed by the GTO without providing an opportunity to the taxpayer.4. Appealability of the GTO's order under the Gift-tax Act.5. Requirement of issuing a notice to the donee before making them liable for gift-tax payment.6. Availability of appeal against the determination of gift-tax payable by the donee.7. Authority of the GTO to impose tax after due notice.8. Observance of principles of natural justice in tax proceedings.Analysis:The judgment pertains to a departmental appeal regarding a gift-tax assessment for the year 1966-67 involving gifts made by Late Nawab Mir Osman Barkat Ali Khan, where the donee, Smt. Rasheedunnisa Begum, was held liable for gift-tax. The GTO allocated the tax payable by the donee without providing an opportunity, leading to an appeal by the revenue challenging the cancellation of the order by the first appellate authority. The revenue contended that section 29 of the Gift-tax Act does not mandate providing an opportunity and that the order was not appealable. The appellate tribunal disagreed, emphasizing the importance of natural justice in tax proceedings and the need for the GTO to form an opinion before making the donee liable under section 29.The tribunal highlighted the provisions of section 29, which primarily hold the donor responsible for gift-tax payment, allowing pursuit from the donee only under specific circumstances. It emphasized the necessity of the GTO forming an opinion and issuing a notice to the donee for objections before making them liable for tax payment. The absence of such notice in the case led to the cancellation of the order, underscoring the importance of adhering to principles of natural justice even in tax matters. The tribunal rejected the argument that no notice was required, citing previous judgments emphasizing the need for due process in tax assessments.Regarding the appealability of the GTO's order, the tribunal dismissed the revenue's argument that there could be no formal appeal, pointing out the provision for appeal under section 22 of the Act when objecting to the determined gift-tax amount. The tribunal also rejected the plea to authorize the GTO to impose tax without due notice, emphasizing that orders passed without observing natural justice can be set aside or canceled. It clarified that any further action by the authorities would depend on the law and facts of the case, and the tribunal's role was limited to the order under consideration.In conclusion, the tribunal dismissed the appeal, affirming the cancellation of the order due to procedural irregularities and emphasizing the importance of following principles of natural justice in tax proceedings. The judgment underscored the need for the GTO to provide opportunities for objections and adhere to due process before holding a donee liable for gift-tax payment.
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