Controller of Estate Duty Vs. Shri Ashok Kumar M. Parikh

Controller of Estate Duty vs Shri Ashok Kumar M. Parikh

Type Court Judgment Court Mumbai Decided Jun 06, 1990

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Citation: sooperkanoon.com/348207
Court: Mumbai High Court
Judge: Sujata V. Manohar and;T.D. Sugla, JJ.
Decided On: Jun 06, 1990
Case Number: Estate Duty Reference No. 3 of 1976
Subject: Direct Taxation

Case Summary

AI-generated summary - not the official court judgment text.

- [Couto; M.L. Pendse, JJ.] In the first instance the order passed under s. 132(5) is an order of a summary nature and does not conclude the rights of the petitioners, because while passing the assessment order, it is always open to the petitioners to point out that the assets recovered in the search were not undisc...

Key legal issue: Direct Taxation
Acts & sections: Excise Duty Act, 1953 - Sections 34(1)

Parties & Advocates

Appellant / Petitioner

Controller of Estate Duty

Advocate G.S. Jetley, Adv.

Respondent

Shri Ashok Kumar M. Parikh

Legal References

Acts: Excise Duty Act, 1953 - Sections 34(1)
Reported In: (1990)87CTR(Bom)124; [1990]186ITR212(Bom)

Excerpt

- [couto; m.l. pendse, jj.] in the first instance the order passed under s. 132(5) is an order of a summary nature and does not conclude the rights of the petitioners, because while passing the assessment order, it is always open to the petitioners to point out that the assets recovered in the search were not undisclosed to point out that the assetsrecovered in the search were not undisclosed income. secondly, the order passed under s. 132(5) is appealable under the provisions of the act and if there is any violation in the exercise of the power, then the proper remedy is to lodge an appeal before the appellate authority. thirdly, even assuming that there is some breach in exercise of power s. 132(5) such breach is not so fatal as to warrant quashing the entire order. income tax act 1961 s.132 - search and seizure--order under s. 132(5)--validity of--seized assets handed over the commissionerincome tax act 1961 s.132 - search and seizure--reason to believe--commissioner considering extensive information and anonymous petitions and undertaking detailed scrutiny. income tax act 1961 s.132.....in komanduri seshamma v. appellate ced : [1973]88itr82(ap) was delivered on august 27, 1971. thus, when the tribunal decided the appeal, there existed two high court decisions, one upholding the validity of section 34(1)(c) and the other striking it down. that being so, neither of the two decision was binding on the tribunal as such. the settled law in view of the supreme court decision in k. s. venkataraman and co., (p.) ltd. v. state of madras : [1966]60itr112(sc) being that the tribunal cannot consider the vires of the provisions of the act under which it is constituted, the tribunal could not have considered the question, far less ignored the provisions, strictly speaking, this court cannot also go into this question in its reference jurisdiction, though, as rightly pointed out by shri. jetley, several other high courts have upheld the validity of the provisions of section 34(1)(c). accordingly, we hold that tribunal was not justified in ignoring the provisions of section 34(1)(c).6. in the above view of the matter, the question of law is answered in the affirmative and in favour of the revenue. no order as to costs.

Full Judgment

T.D. Sugla, J.

1. In this reference at the instance of the Department, the question of law referred to this court reads thus :

'Whether the shares of the sons of the deceased in the joint family property could be taken into account for the purpose of determining the rate of tax applicable in respect of the share of the deceased in the joint family properties as per section 34(1)(c) of the Estate Duty Act, 1953 ?'

2. The deceased had a coparcenary interest in the joint family property. The Assistant Controller and the Appellate Controller of Estate Duty held that the value of the sons of the deceased in the joint family property was to be included for the purpose of determining the rate of duty applicable in respect of the principal value thereof as required under section 34(1)(c) of the Estate Duty Act. In second appeal, the Tribunal considered itself bound by the Madras High Court decision in the case of V. Devaki Ammal v. Asst. CED : [1973]91ITR24(Mad) by which the Madras High Court had struck down the provisions of section 34(1)(c) of the Estate Duty Act as ultra vires. The Tribunal, accordingly, directed the Assistant Controller not to include the value of the interest of the two sons of the deceased in the joint family assets for determining the rate of duty.

3. Shri Jetley, learned counsel for the Department, submitted that the Tribunal was not justified in ignoring the provisions of section 34(1)(c). He pointed out that, when the Tribunal passed the impugned order on January 15, 1974, the Andhra Pradesh High Court had, in Smt. Komanduri Seshamma v. Appellate CED : [1973]88ITR82(AP) , already held that the provisions of section 34(1)(c) were valid and not ultra vires articles 14 and 19(1)(f) of the Constitution. This judgment was delivered on August 27, 1971. Fairly admitting that the Madras High Court had in V. Devaki Ammal's case : [1973]91ITR24(Mad) had struck down section 34(1)(c), Shri Jetley argued that, in view of a contrary Andhra Pradesh High Court decision In Komanduri Seshamma's case : [1973]88ITR82(AP) , the Tribunal could not have in law proceeded on the basis that such a provision was not there in the Act. Further, a number of other High Courts, namely, the Karnataka High Court in the case of Sirigeri Thippamma v. Appellate CED : [1986]158ITR548(KAR) , the Allahabad High Court in the case of CED v. Shiv Puran Lal Gulati. : [1987]167ITR545(All) , the Patna High Court in the case of CED v. P. K. Agarwalla : [1988]169ITR699(Patna) , the Gauhati High Court in the case of CED v.Murarilal Sovasaria and the Madhya Pradesh High Court in the case of CED v. Suresh Kumar Mirani : [1989]179ITR577(MP) , have in the recent past, it was stated, follwed the Andhra Pradesh High Court decision. He argued that the question must, therefore, be answered in the affirmative and in favour of the Revenue.

4. None appeared on behalf of the respondent accountable person although notice was served and intimation of the hearing was also given to him by the High Court office.

5. It is pertinent to mention that the Madras High Court decision followed by the Tribunal reported in V. Devaki Ammal v. Asst. CED : [1973]91ITR24(Mad) is dated October 10, 1972, whereas the Andhra Pradesh High Court decision in Komanduri Seshamma v. Appellate CED : [1973]88ITR82(AP) was delivered on August 27, 1971. Thus, when the Tribunal decided the appeal, there existed two High Court decisions, one upholding the validity of section 34(1)(c) and the other striking it down. That being so, neither of the two decision was binding on the Tribunal as such. The settled law in view of the Supreme Court decision in K. S. Venkataraman and Co., (P.) Ltd. v. State of Madras : [1966]60ITR112(SC) being that the Tribunal cannot consider the vires of the provisions of the Act under which it is constituted, the Tribunal could not have considered the question, far less ignored the provisions, strictly speaking, this court cannot also go into this question in its reference jurisdiction, though, as rightly pointed out by Shri. Jetley, several other High Courts have upheld the validity of the provisions of section 34(1)(c). Accordingly, we hold that Tribunal was not justified in ignoring the provisions of section 34(1)(c).

6. In the above view of the matter, the question of law is answered in the affirmative and in favour of the Revenue. No order as to costs.

Same Court & Year Mumbai · 1990 Same Parties Controller of Estate Duty vs Shri Ashok Kumar M. Parikh Same Subject Direct Taxation Same Judge Sujata V. Manohar and;T.D. Sugla, JJ. Acts & Sections Excise Duty Act, 1953 - Sections 34(1)

Direct Taxation