ORDER
Shri R.K. Mehta, A.M.
This is an estate duty appeal of the revenue questioning the decision of the Appellate Controller of Estate Duly cancelling the order of the Assistant Controller of Estate Duty dated 25-5-1984 passed under section 61 of the Estate Duty Act, 1953.
2. The deceased R.B. Kishore Chand Maheshwary died on 22-1-1975. The estate duty assessment was completed on the A.Ps., who were the sons of the deceased, on 21-7-1981. The net principal value of the estate was computed by including the share of the lineal descendants of the deceased by the Assistant Controller of Estate Duty. It is undisputed that the A.Ps. had objected to the inclusion of the shares of the lineal descendants by relying upon the Madras High Court authority in V DevakiAmmalv. Assti. CED (1973) 91 ITR 24 but the Assistant Controller following the decision of the Punjab and Haryana High Court in Hari Ram v. Asstt. CED (1975) 101 ITR 539 taking the view contrary to that of the Madras High Court included the shares of the lineal descendants. The matter rested at that till an application dated 11-2-1984 was moved by the A.Ps. requesting for rectification under section 61 of the Estate Duty Act. The request was inspired by a report under the heading “From our reporter at the Supreme Court appearing in 143 ITR page 67 (Statutes) about the Supreme Court dismissing a Special Leave Petition filed by the department against the judgment of the Madras High Court reported in CED v. R.K. Chettiar (1980) 125 ITR 605. In that report, it was mentioned that inR.K. Chelliars case (supra) the Madras High Court on a reference had held that where lands were gif Led by the deceased but the income therefrom was used by him in his business, the value of lands gif Led could not be included in the principal value of the estate, and also held following V Devaki Ammals case (supra) that the lineal descendantsshare could not be included in the ancestral property. The rejection of S.L.P. by the Supreme Court was taken to be the approval of the Madras High Court decision in V Devaki Ainmals case (supra) and the A.Ps. Moved the application on the basis that the law of the land had got settled with the refusal of the S.L.P. by the Madras High Court in the case of R.K. Chettiar (supra). The Assistant Controller also took the sarne view as emerged from the report in 143 ITR 67 (Statutes) ie. the law on the point of inclusion of shares of lineal descendants had got settled and with the approval of Deputy Controller of Estate Duty passed an order under section 61 dated 31-3-1984 accepting the application of the A. Ps. despite his earlier decision being based on a Punjab and Haryana High Court authority of a binding nature and excluded the shares of the lineal descendants. Later on, the Assistant Controller found that the dismissal of Special Leave Petition by the Supreme Court did not imply the approval of the Madras High Court decision in V Devaki Ammals case (supra) as was reported on the covering page of subsequent issue dated 16-4-1984 of the ITR itself being 146 ITR part 7. He has reproduced whatwas printed there at page 2 of the fresh order under section 61 dated 25-5-1984 now under consideration. It is clearly mentioned therein that poin t in V Devaki Ammals case (supra) was still to be decided by the Supreme Court and the fact that the Special Leave Petition against the decision in R.K. Chettiars case (supra) was dismissed cannot be taken to mean that the Supreme Court had impliedly approved the Madras High Court decision in V Devaki Ammals case (supra). He issued a notice under section 61 to the A.Ps. proposing therein the rectification of his earlier order so as to include the share of lineal descendants of the deceased in the ancestral properly. After receipt of the proposed rectification notice the counsel of the A.Ps. requested for adjournment, which request was rejected by the Assistant Controller for the reasons mentioned in his order. He rectified the earlier order by observing that it was only due to mis-interpretation of law by editors of Income-tax Reports that he had passed an order earlier rectifying the original order and that since it was a mistake of law no debate was involved and it came within the purview of the provisions of section 61 of the Estate Duty Act. The A.Ps, filed an appeal against the order under section 61 dated 25-5-1984 before the Appellate Controller of Estate Duly. Several grounds were taken as mentioned in para 2 of the order of the Appellate Controller and one of the grounds urged was that there was no mistake apparent from the record, which could be rectified within the meanine, of section 61 of the Estate Duty Act. 11 is this point, which has been considered by the Appellate Controller of Estate Duty and resulted in the success of the A.Ps. and cancellin., of the order of the ACED under section 61. It was made out before him on behalf of the A.Ps. that there were different views of different High Courts on the same issue and, therefore, a debatable issue was involved, which could not be governed by the provisions of section 61 of the Estate Duly Act. The counsel referred to thePunjab and Haryana High Court decision in Ha ri Rams case (supra) on the one hand and the opposite view taken by the Madras High Court and the Allahabad High Court in R.K Chettiars case (supra) and Badri Vishal Tandon v. CED (1982) 136 ITR 4271 (and not 468 as mentioned in the order of the Appellate Controller) respectively. The Appellate Controller accepted that plea and held that a debatable point of law was not a mistake apparent from records and hence he cancelled the order under section 61 of the Estate Duty Act. The revenue is aggrieved-xvith the order of the Appellate Controller of Estate Duty and has come in appeal to the Tribunal.
3. Before the appeal could be taken up, the departmental representative moved an additional ground urging that no appeal lay against the order passed under section 61 of the Estate Duty Act and the order of the Appellate Controller was illegal and bad in law. This additional ground was opposed by the counsel of the A.Ps. Shri P.N. Arora. He contended that the additional ground was not signed by the Assistant Controller of Estate Duty nor verified by him and was being raised first time before the Tribunal and not before the Appellate Controller and, therefore, it should not be admitted. It was also stated that an appeal would lie against an order of A.C.E.D. under section 61 of the Estate Duty Act as it gave rise to additional duty being demanded from the A.Ps.
4. We have considered the rival submissions and looked into the case law. Without going into the technical objections raised by the A.Ps. counsel, it is apparent to us that the additional ground of the revenue is fit only to be rejected. It is not in dispute that the passing of the order under section 61 of the Estate Duty Act now under consideration had resulted in extra demand of estate duty. In such circumstances, an appeal before the Appellate Controller would clearly lie under section 62(1)(b) of the Estate Duly Act. The Kerala High Court in CED v. P.E. Venkitraman (1978) 115 ITR 222 and the Gujarat High Court in CED v. Jayantilal Keshav Mehia (1979) 117 ITR 51 have taken the same view. The additional ground of the revenue is, therefore, rejected.
5. The departmental representative then argued the grounds of appeal already taken which questioned the action of Appellate Controller in cancelling the rectification order passed under section 61 of the Estate Duty Act. According to him, no debatable issue at all was involved in the facts and the circumstances of the case. The counsel of the A.Ps., on the other hand, repeated the sarne arguments about a debatable issue being involved as were before the Appellate Controller. He also wanted to raise a question of inadequate opportunity of beingheard given by the A.C.E.D. This issue has not been considered by the Appellate Controller and, therefore, it cannot be the subject-matter of the appeal before the Tribunal.
6. We have considered the rival submissions carefully in respect of the issue decided by the Appellate Controller. A deeper analysis win clearly reveal the nature of mistake pointed out by the A.Ps. in the petition dated 11-2-1984, which resulted in the passing of an earlier order under section 61 dated31-3-1984 and also later on necessitated the passing of impugned order under the same section. The application of the A.Ps. clearly brought out the nature of the mistake and we quote an extract from para 1 of that application :-
“Following this ruling of the Madras High Court, the Honble Supreme Court held that share of lineal descendants are not includible. Thus this is a mistake apparent from the record and may be rectified under section 61 and principal value of estate may be redetermined after excluding share of lineal descendants included for rate purposes amounting to Rs. 14,63,707.”
The language of the first sentence is clearly incorrect inasmuch as it says that the Supreme Court followed the ruling of Madras High Court in V. Devaki Ammls case (supra) it is that ruling which is referred to in that sentence. The Assistant Controller also understood the report in 143 ITR 67 (Statutes) to be bringing out that the Supreme Court had approved the Madras decision in V Devaki Ammals case (supra) striking down the aggregation of the shares of lineal descendants. The Assistant Controller in the impugned order under section 61 also refers to the fact that due to mis-interpretation of law by the Editors of the Income-tax Reports the earlier order under section 61 was passed rectifying the original order. Later on, the Assistant Controller came to know about the mistake committed in the report in 143 ITR 67 (Statutes), which was admitted by the ITR Management on the cover page of part 7 of 146 ITR dated 16-4-1984. In other words, it became clear that the mistake was caused by an incorrect report printed in 143 ITR, which gave the impression that the law on the issue of aggregating the shares of lineal descendants under the Estate Duty Act hadbecome settled and, therefore, an order passed under the Estate Duty Act taking the contrary view was an erroneous order, which wasrectifiable undersection 61 of the Estate Duty Act. Because this was the impression conveyed by the report in 143 ITR 167 (Statutes) that the Assistant Controller modified the earlier assessment order under section 61 of the Estate Duty Act, though that order was based on following the view of Punjab and Haryana High Court in flari Ram ~ case (supra). The mistake thus lies in the fact that it was taken that law had become settled by the Supreme Court as per report printed in 143 1TR 67 (Statutes). When the ITR itself accepted the error in its earlier report, it become apparent that the earlier view taken about the law being settled was erroneous. This is the mistake involved in this case and one fails to understand what can be a debate on this point and how the jurisdiction to act under section 61 of the Estate Duty Act is excluded. The nature of mistake having been clearly brought out it is obvious that there is no debatable question involved about its nature. The Appellate Controller failed to see the nature of the controversy correctly and confused it by taking the controversy to be whether the share of lineal descendants is includible or not in the estate duty assessment of the deceased. On this short ground alone the order of the Appellate Controller is unsustainable and the order of Assistant Controller of Estate Duty is to be upheld.
7. The case was also debated at length on the fooling that the mistake involved was whether the share of lineal descendants was includible or not. Even viewing from this angle in the alternative, the A.Ps. do not deserve to succeed in view of the law laid down in such circumstances by, the Punjab and Haryana High Court in the case of CITv.Mohan LalKansal (3 Partners) (1978) 114 ITR 583. A similar controversy under the Incometax Act came up for the consideration of the High Court and the High Courtheld that the Income-tax Authorities situated within thejurisdiction of a particular High Court are bound by the decision and rejected the view taken by the Tribunal that a debatable question was involved as there was a conflict of opinion on the issue under consideration arrion-st the Courts. The High Court held that as long as the Punjab and Haryana High Court authority stood, it could not be said that the mistake was not apparent on the record or that it required a long drawn process of reasoning to discover the same and the Income-tax Authorities were bound to follow the rule laid down in that case. The position in law, therefore, is settled so far as the jurisdiction of Punjab and Haryana High Court is concerned in the facts and the circumstances of this case. It is undisputed that in Hari Rams case (supra) the Punjab and Haryana High Court had dissented from the Madras view in V Devaki A mmals case (supra) and upheld the aggregation of shares of lineal descendants. The view of the Punjab and Haryana High Court has not been held to be incorrect by the Supreme Court uptil now. The erroneous impression created by the ITR report in 143 ITR 67 (Statutes) is repelled by the ITR itself in 146 ITR. In this background, it would be clearly an error apparent on the record when the ACED under a misconception modified the original estate duty order by order under section 61 of the Estate Duty Act dated 31-3-1984 and such an order had been correctly rectified by subsequent order under section 61 dated 25-5-1984. From this angle also, it is obvious that the revenue deserves to succeed.
8. In view of the above discussion viewing from either of the angles, the appeal of the revenue deserves to succeed and it is allowed. The order of the Appellate Controlleris reversed and the order of the Assistant Controller of Estate Duty dated 25-5-1984 is restored.
Shri P.S. Dhillon, Judicial Member
9. I have gone through the order of my learned brother, Shri P.K. Mehta, carefully, again and again, but 1 regret to say that 1 fail to agree with him both in his reasons and conclusions and, therefore, 1 agreed with him to differ. Hence, 1 say my say as under:
10. The issue involved in this case is that whether the taking or including the share of lineal descendants of the deceased (in the co-parcenary property) in the estate of the deceased for rate purpose, as provided in section 34(1)(c) of the Estate Duty Act, 1953 (hereinafter referred to as the Act) is debatable point of law.
11. The Assistant Controller of Estate Duly made original assessment on 20-1-1981 and thereby included the share of lineal descendants in the estate of the deceased for the estate duty purposes, following the decision of their Lordships of Honble Punjab and Flaryana High Court in the case of Hari Rain (supra) and did not follow the decision of their Lordships of Honble Madras High Court in the case of V. Devaki Ammal (supra).
12. However, the A.Ps. made application dated 11-2-1984 for rectification of the order and the Assistant Controller of Estate Duty, rectified the mistake apparent from the record with the approval of the Deputy Controller vide order dated 31-3-1984, accepting the application of the A.Ps. and thereby excluded the share of the lineal descendants from the estate.
13. Later on the Assistant Controller of Estate Duty found that the point in the case of V. DevakiAmmal(supra) is still pending disposal before the Honble Supreme Court in other cases, and the fact that the Special Leave Petition was dismissed against the decision in the case of V DevakiAmmal (supra) could not be taken to mean that the Supreme Court had impliedly approved the Madras High Court decision in V Devaki Ammals case (supra). Reliance can be placed on the covering page of issue dated 16-4-1984 of 146 ITR, Part 7. Thus, the Assistant Controller of Estate Duty issued notice under section 61 of the Act to the A.Ps. proposing therein the rectification of his earlier order, so as to include the share of lineal descendants of the deceased in the ancestral property. The A.Ps. contested the notice issued by the Assistant Controller of Estate Duty and thereby contended that the Assistant Controller of Estate Duty had no power to rectify his order, approved by the Deputy Controller and moreover, the issue involved in the case is highly debatable. The Assistant Controller of Estate Duty rejected the contentions of the A.Ps., supra, which was accepted by the Controller of Estate Duty (Appeals) as is evident from their respective orders.
14. Thus, from the above facts and facts detailed hereinafter, it is manifest that the issue mentioned above is highly debatable; since, the Honble Punjab and Haryana High Court in the case of Hari Ram (supra) has taken a different view than that of the Honble Madras High Court in the case of V Devaki Ammal (supra).
15. Further, the Honble Supreme Court dismissed the Special Leave Petition in the case of V DevakiAinmal(supra) decided by their Lordships of the Honble Madras High Court, resulting in clarification that for dismissalof Special Leave Petition in the case YDevakiApnnwl(supra)it is not to be assumed that the decision therein is there on merits and, therefore, the decision of Honble Madras High Court in the case of V Devaki Ammal (supra) has been approved.
16. Apart from it, it is on record that the issue involved in V Devaki Ammalscase (supra) is still pending disposal before the Honble Supreme Court in other cases being admitted position. Moreover, in accepting the application of the assessee for rectification mentioned above, the Assistant Controller of Estate Duty had the approval of the Deputy Controller, which further proves it; as well as the application of the mind of the revenue s authorities. Thus from the above facts, it is proved beyond doubt that the issue involved in the case and mentioned above is highly debatable.
17. The Honble Supreme Court has repeatedly held that if debate is involved in the case on the issue, then mistake apparent from the record cannot be held to be there. Reliance is placed on the decision of Honble Supreme Court in the case of T.S. Balaram, Income Tax Officer v. Volkart Bros. (1971) 82 ITR 50, where their Lordships, held as under:
“A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivable two opinions. A decision on a debatable point of law is not a mistake apparent from the record.”
18. Now, the question to be determined is that if there is a decision of the Hudble High Court within the jurisdiction of which the Bench of the Tribunal is functioning, then can it be held that no debate is there, particularly when there is another decision of another Honble High Court. My answer to this question is that if there is an appeal, against the rectified order in the Tribunal, then the Tribunal is to follow the principles or ratio laid down by the Honble Supreme Court in the case of Volkart Bros. (supra). However, in appeals, where the order appealed is not under section 154 of the Act, then the decision of the Honble High Court, within the jurisdiction of which the Bench of the Tribunal is functioning is to be followed, though there are decisions of the Honble Supreme Court, holding that the view favourable to the assessee to be followed by the Tribunal.
19. Thus, keeping it in mind and with great respect to the views of my learned brother and the decision of the Honble Punjab and Haryana High Court, relied upon by him, 1 hold that where issue involved is arising from the rectified order in the appeal before the Tribunal, is debatable, then the Tribunal in such appeal is to follow the decision of the Honble Supreme Court supra and not that of the Honble High Court, supra on the ground that the Bench of the Tribunal is functioning within its jurisdiction and hence the decision is binding on it.
20. It is Honble Supreme Court that lays the law of the land and not the Honble High Court. Further viz-a-viz the Bench of the Tribunal, which is functioning within the jurisdiction of the High Court, the jurisdiction of the Honble High Court is of an advisory nature and by convention, its decision are taken by the Benches of the Tribunal, functioning within its jurisdiction as of binding nature, resulting in no uniformity decisions of the Benches of the Tribunal particularly when the Tribunal is all India judicial body. Therefore, viewed from this angle also, the Tribunal is to follow the decision of Honblc Supreme Court, which lays the law of the land and where the opposite decisions of Honble High Courts are there, then it should follow the decision which is reasonable or rational in its view.
21. Further, in the case my brother has also noted that the decision in the case V DevakiAmmal(supra) is pending disposal in the Honble Supreme Court, which further proves that the issue involved in this case and mentioned above is highly debatable and it cannot be held otherwise, in view of the decision of the Honble Punjab and Haryana High Court, relied upon by my Id. brother. Reliance is placed on para No. 2 of the order of my learned brother,
22. It is pertinent to note that it is the conclusion, which is subjudice and not the reasons for it. In this case the conclusion arrived at is that the share of the lineal descendants is to be included in the estate, which is highly debatable issue as is evident from the facts mentioned above. Therefore, it cannot be held that as the application of the assessee was allowed by the Assistant Controller of Estate Duty on the ground that the decision of the Honble Madras High Court in the case of V DevakiAmmal (supra), has been approved which was not at all approved, as has been clarified by the ITR Manaaement on the cover page of Part 7 of 146 ITR and mentioned in the order of my learned brother; since it is a mean for an end and the end or conclusion is that the share of the lineal descendants is to be included in the estate duty for the rate purposes.
23. It is also pertinent to note that the Assistant Controller of Estate Duty made rectification on the approval of the Deputy Controller on the application of the A.Ps and thereby excluded the share of the lineal descendants from the estate. When this is so, then the Assistant Controller of Estate Duly in rectifying his order has acted without powers vested in him, ifviewed from the angle of administration in the Income-tax Deptt.
24. In view of my above discussion and reasons, thereto. 1 am of the considered opinion that in this case on the issue involved debate is there and, therefore, no mistake apparent from the record is there, which needs to be rectified. Accordingly, 1 confirm the impugned order and thereby dismiss the appeal of the revenue . 25. In the result, the appeal is dismissed. in this case, there is a difference of opinion among us both, therefore, we make reference to settle it to the worthy President of the Tribunal. Hence, we frame the following questions for the purposes.
“1. Whether, on the facts and in the circumstances of the case, the debate is involved on the issue : whether the share of the lineal descendants is to be included in the estate of the deceased for rate purposes, particularly, when the decisions in the cases of Devaki Arnmal and Hari Ram of Madras and Punjab and Haryana High Courts are opposite to each other on the issue.
2. “Whether, on the facts and in the circumstances of the case, it can be held that there is a decision of the Honble Punjab & Haryana High Court in the case of I-lari Rain v. ACED, 101 ITR 539 and, therefore, no debate is involved and as such mistake apparent from the record is there, particularly, when the decision of the Honble Supreme Court in the case of LS. Balram, Income Tax Officer, Company Circle, TV, Boinbay v. Volkart Bros. & others 82, ITR 50 says otherwise.”
3. “Whether, on the facts and in the circumstances of the case, the Assistant Controller of Estate Duty is competent to rectify of his own, the order made with the approval of the Deputy Controller of the Estate Duty.”
ORDER UNDER SECTION 63(11) OF THE ESTATE DUTY ACT, 1953 READ WITH SECTION SA(7) OF THE INDIAN INCOME-TAX ACT, 1922.
Per Shri R.K. Mehta, Accountant Member
I have gone through the order under section 63(11) of the Estate Duty Act, 1953 read with section 5A(7) of the Indian Income Tax Act, 1922 dictated by my brother. In my opinion, it will be better to refer a single question highlighting the difference between us, which is confined to the conclusion to be arrived at. Consequently, 1 will suggest the following question, which will comprehensively deal with the point of difference :-
“Whether there was a mistake apparent from the record in the order of the Assistant Controller of Estate Duty dated 31-3-1984, which could be rectified by him by his subsequent order dated 25-5-1984 ?”
The case is referred to the President of the Appellate Tribunal in accordance with section 63(11) of the Estate Duly Act, 1953 read with section 5A(7) of the Indian Income Tax Act, 1922 for further action.
THIRD MEMBER ORDER
Per Shri V. Dongzathang, President
The following points of difference were referred to me for my decision:
By the Judicial Member :
“1. Whether on the facts and in the circumstances of the case, the debate is involved on the issue whether the share of the lineal descendants is to be included in the estate of the deceased for rate purposes, particularly, when the decisions in the cases of Devaki Aminal and Hari Rain of Madras and Punjab and Haryana High Courts are opposite to each other on the issue ?
2, Whether on the facts and in the circumstances of the case, it can be held that there is a decision of the Honble Punjab and Haryana High Court in the case of Hari Rain v. ACED 101 ITR 539 and, therefore, no debate is involved and as such mistake apparent from the record is there, particularly, when the decision of the Honble Supreme Court in the case of TS. Balram, Income Tax Officer, Co. Cir. IV Bombay v. Volkart Brothers & Ors. 82 ITR 50 says otherwise ?
3. Whether, on the facts and in the circumstances of the case, the Assistant Controller of Estate Duty is competent to rectify of his own the order made with the approval of the Deputy Controller of the Estate Duty ?”
By the Accountant Member :
“Whether, there was a mistake apparent from the record in the order of the Assistant Controller of Estate Duty dated 31-3-1984 which could be rectified by him by his subsequent order dated 25-5-1984 ?”
2. The facts of the case are fully brought on record by the learned Accountant Member and the Judicial Member. The point of difference was whether the issue is debatable in view of the conflicting decisions of the jurisdictional High Court in the case of Hari Rain (supra) and of the Madras High Court in the case of V. Devaki Ainmal (supra).
3. At the hearing before me none appeared on behalf of the assessee. Af (er hearing Shri Tarsern Lal, the learned Sr. D.R., 1 am of the view that this issue is finally settled by the Honble Supreme Court in AsstL CED v. V Devaki Aminal (1995) 212 ITR 395. Since the Honble Supreme Court has reversed the decision of the Honble Madras High Court (supra), there is no more debate and the view taken by the learned Accountant Member stands confirmed. Accordingly, 1 concur with the learned Accountant Member on this point.
4. The matter will now go back to the Division Bench for passing consequential order.