TaxTMI 
TaxTMI 
1971 (11) TMI 42
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....ent under the Land Acquisition Act. Possession of those lands was taken by the Government on December 4, 1963, and between 13th and 15th March, 1964, respectively. Awards were made by the Special Deputy Collector in respect of those lands on March 12, 1965, and March 19, 1965. The compensation awarded by the Special Deputy Collector for the total extent of the land at Qutbillapur was Rs. 4,29,360.68. Rashid Shapoor Chenai died on November 4, 1963. The petitioner, who is the widow of the deceased and the "accountable person" under the Estate Duty Act, filed under section 53(3) of the Estate Duty Act (hereinafter called "the Act") an account of the properties passed on the death of the deceased, Rashid Shapoor Chenai. The estate duty assessment was completed by the Assistant Controller of Estate Duty on March 29, 1966. With regard to the lands acquired during the lifetime of Rashid Shapoor Chenai and after, their value was taken at the figures of compensation awarded for them by the Special Deputy Collector and on that basis the estate duty assessments were made by the Assistant Controller of Estate Duty under section 58 of the Act. Aggrieved by the assessment made by the Assis....
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....ime a right was created in favour of the legal heirs of the deceased by virtue of the orders of the courts passed long after the death of the deceased, to receive enhanced compensation. It is not open to the department to relate back this property to the time when the deceased died, because there was no legal right created in favour of the deceased or his legal heirs at the time of death of the deceased to receive the enhanced compensation as determined by the courts in the proceedings subsequently taken; and 4. when on the enhanced compensation awarded after the death of the deceased, estate duty is not leviable, under section 5 of the Estate Duty Act, there was no mistake apparent from the record with could be rectified under section 61 of the Act. On these grounds, the petitioner seeks a writ of prohibition or direction against the respondent for a declaration to the effect that the impugned notice is invalid and illegal, and for a direction restraining the Assistant Controller of Estate Duty from taking proceedings in pursuance of that notice. The learned Advocate-General, appearing for the petitioner, raised the following contentions: (1) rectification of a mistake, i....
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....person accountable: Provided that no such rectification shall be made which has the effect of enhancing the estate duty payable, unless the person accountable has been given a reasonable opportunity of being heard in the matter." A reading of the above section makes it manifest that the above section gives power to (1) the Controller of Estate Duty, (2) The Appellate Controller of Estate Duty, and (3) the Income-tax Appellate Tribunal, to rectify any mistake apparent from the record in their respective orders, within five years from the date of their respective orders. The power of rectification could be exercised by the aforesaid officers or the authorities either suo motu or at the instance of the accountable person. If, however, the proposed rectification has the effect of enhancing the estate duty payable, the officer or the authority concerned cannot rectify the assessment order unless he or it has served a notice upon the accountable person and has given him a reasonable opportunity of being heard. In the instant case before us, the estate duty assessment was completed on March 29, 1966, and the impugned notice for rectification of the alleged mistake apparent from the ....
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....Income-tax Appellate Tribunal. It is, therefore, evident that only one order has been passed with regard to the valuation of the lands in question, and that is the order of the Assistant Controller of Estate Duty. The alleged mistake which is now sought to be rectified is in the valuation of the said lands. Since the alleged mistake has occurred in the order passed by the Assistant Controller of Estate Duty, which was not the subject-matter of appeal either before the Appellate Controller or before the Income-tax Appellate Tribunal, it was the Assistant Controller of Estate Duty alone that could rectify such a mistake. The decision of the Calcutta High Court in Indra Co. Ltd. v. Income-tax Officer, to which our attention has been invited, does not help the accountable person. In that case, the loss that was claimed was not only the subject-matter before the Income-tax Officer but was also before the Appellate Assistant Commissioner in appeal. The computation of the loss as determined by the Appellate Assistant Commissioner was sought to be rectified on the ground that there was a mistake in the computation of such loss. In those circumstances, K. L. Roy J. has rightly observed t....
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....t that can be rectified under this section, but also obvious mistakes of law. A mistake in valuation of a property included in the account can be rectified under section 61 of the Act. There is nothing in the section which prevents rectification of a mistake in valuation apparent from the record, even if the valuation is a subject-matter of appeal under the Act. In Asok Textiles case it was observed that: "The restrictive operation of the power of review under Order 47, rule 1, Civil Procedure Code, is not applicable in the case of section 35 of the Act..." Since the language of section 35 of the Indian Income-tax Act, 1922, is in pari materia with the language of section 61 of the Estate Duty Act, it follows from the above ruling that the restrictive operation of the power of review under Order 47, rule 1, of the Civil Procedure Code is not applicable to the cases of rectification of mistakes under the taxing statutes. In Maharana Mills (Private) Ltd. v. Income-tax Officer, Porbandar the learned judges of the Supreme Court, dealing with the case of rectification of a mistake under section 35 of the Indian Income-tax Act of 1922, observed that: "The power under secti....
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....to the Income-tax Officer to examine the record including the evidence and if he discovers any mistake he is entitled to rectify the error provided that if the result is enhancement of assessment or reducing the refund then notice has to be given to the assessee and he should be allowed a reasonable opportunity of being heard." Rejecting the argument that the record must be the assessment record of the relevant assessment year and not the assessment record of other years, the Supreme Court observed that: "A fortiori if he discovered that the very basis of the different assessments was erroneous because of an initial mistake in determining the written down value could it be said that this would not be a mistake apparent from the record. And if in order to determine the correct written down value the Income-tax Officer makes correct calculations, can it be said that that is not rectifying a mistake apparent from the record but is de hors it." Thus the distinction, their Lordships observed, "was a distinction without a difference". The next case which explains the meaning of the word "record" is Arvind N. Mafatlal v. Income-tax Officer, North Satara. In order to appreciate....
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....inally stood in his name, really belonged to the firm of which he was the partner. The Income-tax Officer then determined the total world income of Navinchandra at Rs. 19,75,328 which included Rs. 18 interest and Rs. 8,528 being the 5/16th share in the dividend deemed to have been distributed under section 23A of the Indian Income-tax Act of 1922, from the profits of the company for the year ending September 30, 1945, received through the firm. The total income of Navinchandra in the Phalton State was thus determined at Rs. 8,546. The amount of Rs. 8,528 which was taken as the share of dividend of the company was presumably arrived at by the Income-tax Officer as 5/16 of the dividend on 40 shares held by the firm out of the total 100 shares of the company in respect of the net income of Rs. 68,228, which was deemed to have been distributed as dividend under section 23A of the Act. On April 13, 1954, the Income-tax Officer served a notice on Navinchandra intimating that the dividends deemed to have been distributed under section 23A of the Act in respect of the shares of the company held by Navinchandra had been taken at Rs. 8,528 net for the assessment year 1947-48 under the Pha....
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.... The mistake to be rectified should, however, be a mistake 'patent on the record' and not a mistake which may be discovered by a process of elucidation, argument or debate." As held by the Supreme Court in Sidhramappa Andannappa Manvi v. Commissioner of Income-tax, the court further held that, in ascertaining whether there was an error apparent from the record, the Income-tax Officer must not confine himself to the order of assessment of the assessee alone. All proceedings which constitute evidence on which the assessment order is based must be regarded as record for the purposes of section 35. The Income-tax Officer is not prohibited from looking at the evidence in ascertaining whether an error has been committed. However, on facts, the court held that the benefit of credit of tax under section 18(5) and the corresponding grossing up under section 16(2) were available only to the registered shareholder and not to the real owner of the shares. Viewed thus, the High Court held that there was no mistake apparent from the record which could be rectified under section 35. However, we are not concerned with the result of that writ proceeding. The above decision of the Bombay Hi....
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.... Ethel Rodrigues v. Assistant Controller of Estate Duty, Hegde J. (as he then was), speaking for the Mysore High Court, held that: "Where the Controller has made his own valuation of the estate of a deceased person under section 36 of the Estate Duty Act, 1953, he has no jurisdiction to rectify the assessment under section 61 on the ground that the estate has been taken at an enhanced value in the probate proceedings. By taking the enhanced value put upon the estate in the probate proceedings he cannot be said to rectify any mistake apparent from the record of the estate duty assessment but he would be changing his opinion about the valuation of the estate because some other authority has valued the estate differently. For the purpose of section 61, the only record that the assessing authority can look into is the record relating to the assessment of estate duty and not any other record such as the record in the probate proceedings which is not relevant. For the purpose of enhancing the value of an estate on the basis of the value taken in the probate proceedings, the Controller has to invoke the provisions of section 59 and proceed to reassess and for such a reassessment the....
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.... of those lands. If the Assistant Controller of Estate Duty had not accepted the values of the properties as shown in the awards, or the returns filed by the accountable person but had estimated their values, then he would have no jurisdiction to further correct those values with reference to the awards passed by the civil court, on references made to it. In such a case, it would have been a change of opinion, and not a mistake apparent from the record. The valuation of the lands was based on the award, and that award, by reason of the references made to the civil court, stood modified. The fact that the award passed by the Special Deputy Collector was modified by the civil court on a reference made to it under section 18 of the Land Acquisition Act, forms part of the record, from which the mistake discovered by the assessing officer is apparent. Awards were thus materials or pieces of evidence on which the assessment order was based. The Assistant Controller of Estate Duty had, therefore, jurisdiction to rectify such a mistake under section 61 of the Estate Duty Act. The next question that may have to be considered is whether the mistake in this case has been discovered by a....