ORDER
Satish Chandra, Accountant Member
1. The revenue is in appeal against the order dated 18-7-1989 passed by the Appellate Controller of Estate Duty, MP-I, Indore, whereby he has annulled the order of the Assistant Controller of Estate Duty (for short ‘ACED’) passed under Section 58(4) of the Estate Duty Act, 1953 (hereafter referred to as ‘the Act’) on the ground that the proceedings are barred by limitation.
2. The facts in brief are that the ACED issued a notice under Section 55 of the Act on 19-12-1983 to the Accountable Person (for short, the AP), Smt. Sitabai, wife of late Shri Hiranand requiring her to make compliance as specified in the notice by 20-1 -1984. Since the compliance was not made, he fixed the case for hearing from time to time and ultimately issued a notice under Section 59 of the Act to the Accountable Person on 5-6-1987 requiring her to deliver an account of the property in respect of which estate duty was payable by 26-6-1987. In response thereto, the AP filed an application on 22-6-1987 requesting for further extension of 15 days. As the AP did not file the account of the estate at all, the ACED framed an assessment under Section 58(4) of the Act to the best of his judgment. He accordingly computed the net principal value of the estate passing on the death of the deceased at Rs. 3,76,250. Being aggrieved, the A.P. appealed.
3. Before the Appellate Controller of Estate Duty it was contended by the authorised representative of the AP that the ACED has wrongly mentioned the date of the death of the deceased as 30-1-1982. As per the certificate issued by the Indore Municipal Corporation Shri Hiranand died on 30-7-1981. The ACED issued notice under Section 59 of the Act on 5-6-1987 and passed the assessment order under Section 58(4) on 14-7-1987. It was contended that as per provisions of Section 73A(a) the ACED should have initiated the proceedings within a period of five years from the date of the death of the deceased. In this case the death took place on 30-7-1981. Hence, the proceedings should have been initiated by 30th July, 1986. However, the notice under Section 59 was issued on 5-6-1987 which is beyond the period of five years from the date of the death of the deceased. It was thus argued that the order dated 14-7-1987 passed by the ACED is invalid, being barred by limitation. The Appellate Controller of Estate Duty considered the above submissions and held as under :
Now the question arises as to what would amount to initiation of proceedings. It is contended that the proceedings can be said to have been initiated as soon as an account of estate has been filed under Section 53 or a notice under Section 59 has been issued and served on the A.P. within the time limit available. In the present case, no account of estate has been filed at all and the notice issued under Section 59 is beyond time limit as laid down under Section 73A(a). Hence, the contention of the AP is correct that the proceedings are barred by limitation of time and the order passed by the AO is invalid.
In view of the above facts, the order passed under Section 58(4) by the ACED is hereby annulled being invalid as the proceedings are barred by limitation of time.
The revenue is aggrieved by the above findings of the Appellate Controller of Estate Duty and is in appeal before the Tribunal.
4. The learned Departmental Representative submitted that Sub-section (3) of Section 53 provides that an account shall be furnished by the AP within six months of the death of the deceased. The proviso to Section 53(3) empowers the Controller of Estate Duty to extend, on application by the AP, a period of six months aforesaid on such terms which may include payment of interest as may be prescribed. Section 55 empowers the Controller of Estate Duty to call for information, particulars or statement from the AP. It was in exercise of the powers conferred by Section 55 of the Act that the ACED issued a notice to the AP on 19-12-1983. He vehemently argued that the above notice was issued well within the period of limitation. The Appellate Controller of Estate Duty was, therefore, not justified in holding that the proceedings are barred by limitation and consequently annulling the impugned assessment. According to the learned Departmental Representative, despite the service of notice under Section 55 of the Act on the AP, neither compliance was made nor account of estate of the deceased was filed. The ACED, therefore, issued notice under Section 59(a) on 5-6-1987 requiring the AP to submit an account as required under Section 53 of the Act. The AP, however, did not file an account of the estate of the deceased in response to the above notice as well which led the ACED to pass an ex parte order under Section 58(4) of the Act. According to the learned Departmental Representative, the proceedings for levy of estate duty in this case commenced with the issue of notice under Section 55 of the Act by the ACED to the AP which was within five years and this was the period of limitation prescribed under Section 73A(a) of the Act. The Appellate Controller of Estate Duty was, therefore, not justified in holding that the proceedings had commenced with the issue of notice under Section 59 which was beyond the prescribed time limit.
5. The learned authorised representative of the AP, on the other hand, submitted that where the account of estate of the deceased has not been delivered within the time limit prescribed under Section 53, the ACED is empowered to commence the proceedings for the levy of estate duty by issue of a notice under Section 59(a) or (b). In the instant case, the ACED commenced the proceedings for levy of estate duty against the AP by the issue of a notice under Section 59 on 5-6-1987 which was beyond the time limit prescribed under Section 73A(a) and, therefore, placing reliance on the decision of the Calcutta High Court in the case of .ACED v. Ashok Singh [1980] 124 ITR 587, he argued that the Appellate Controller of Estate Duty was correct in holding that the proceedings were initiated by the ACED after the expiry of the period of limitation prescribed under Section 73A(a) and, therefore, he was perfectly justified in annulling the impugned assessment order dated 14-7-1987 passed under Section 58(4) of the Act. According to him, the proceedings did not commence by the issue of a notice under Section 55 of the Act.
6. We have considered the rival submissions and perused the orders of the authorities below. It will be observed from the finding of the Appellate Controller, extracted above, that he has accepted the stand of the learned representative of the AP that the proceedings can be said to have commenced on filing of an account of the estate by the AP under Section 53 or on service of notice under Section 59. This approach of the Appellate Controller of Estate Duty, in our opinion, is not correct. The Apex Court had an occasion to interpret the word “levy” in the case of Asstt. Collector of Central Excise v. National Tobacco Co. of India Ltd. AIR 1972 SC 2563 and their Lordships have held that the word ‘levy’ embraced within it the process of assessment and also the imposition of tax. The word ‘levy’ occurs in Section 73A also. Section 73A reads thus :
Limitation for commencing proceedings for assessment or reassessment:
73A. No proceedings for the levy of any estate duty under this Act shall be commenced-
(a) in the case of a first assessment, after the expiration of five years from the date of death of the deceased in respect of whose property estate duty became payable; and (b) ** ** **
It is thus clear that Section 73A(a) limits the period beyond which no proceedings for the levy of estate duty could be commenced in the case of a first assessment which is to be made under Section 58 of the Act – to five years from the date of the death of the deceased in respect of whose property – estate duty has become payable. It is not in dispute that in the case before us it is the first assessment and, therefore, the proceedings for the levy of estate duty should have commenced within five years from the date of death of the deceased. As per death certificate submitted by the AP, date of the death of the deceased is 30th July, 1981. Accordingly, the proceedings for the levy of estate duty could be commenced up to 30th July, 1986.
7. It is not in dispute that the ACED served a notice on the AP under Section 55 of the Act calling upon her to deliver a statement, etc., not later than 20-1-1984. The said notice was issued on 19-12-1983, i.e., within five years of the death of the deceased. The requisition made under Section 55 of the Act is only with a view to assessing the value of the estate of the deceased. In the instant case, no account has been delivered as required by Section 53 or Section 55 and, therefore, the ACED resorted to best judgment assessment for determining the estate duty payable under Section 58(4) of the Act. In the case of Padampat Singhania v. CED [1980] 122 ITR 162 (All.) it has been held that Section 55 is an enabling provision. Where in exercise of his powers under Section 55 the ACED serves on the AP a notice calling upon the AP to deliver a statement within five years of the death of the deceased, it could be said that the proceedings under the Estate Duty Act have commenced within five years of the death of the deceased. It has further been held that such a service of the notice under Section 55 saves the bar of limitation created by Section 73A of the Act. Similar view has been taken by the Allahabad High Court in the case of CED v. Smt. Manorama Devi [1980] 123 ITR 322. Respectfully following the decisions (supra) it has to be held that the assessment framed by the ACED is not barred by limitation as a notice under Section 55 of the Act was issued and served by him before the expiry of five years from the date of death of the deceased.
8. We have perused the case of Ashok Singh (supra) referred to by the learned representative of the AP. In that case one ‘G’ died intestate on 6-2-1957. G’s son ‘A filed an application for the grant of a succession certificate in the City Civil Court at Calcutta. By an order dated 29-7-1972 the Court directed ‘A’ to produce a certificate as required under Section 56(2). Thereafter, on 18-8-1972 ‘A’ filed an account of the estate of ‘G’. The Assessing Officer served on 4-9-1972 a notice under Section 58(2) fixing the date of hearing on 19-9-1972. On that date it was contended on behalf of ‘A’ that no proceedings could be initiated in view of Section 73A. Rejecting such contention, the hearing was adjourned to 15-12-1972. Aggrieved by the notice dated 4-9-1972 the ‘A’ filed a writ petition. A Single Judge quashed the notice on the ground that Section 73A(a) applied and the Assessing Officer had no jurisdiction to commence or initiate any proceedings. On appeal, the Division Bench allowed the appeal and dismissed the petition holding that Section 73A was not applicable to proceedings commenced in consequence of an application for grant of representation and succession certificate and an account delivered under Section 56. It will thus be seen that in the case of Ashok Singh (supra) it has been held that Section 73A is not applicable where an application for the grant of representation is made. In the case before us, the AP has not made any application for the grant of representation and succession certificate nor an account has been delivered under Section 56 to the Controller of Estate Duty. Therefore, the decision of the Calcutta High Court in the case of Ashok Singh (supra) does not render any help to the AO. We, accordingly, set aside the order of the Appellate Controller of Estate Duty and direct him to decide the appeal on merits.
9. In the result, the appeal is allowed.