This appeal by the Revenue is directed against the order of the CED(A) deleting an addition of Rs. 6,70,000 lying in the N.R.E. Account of the deceased on the ground that the deceased was domiciled in Bahrain. The grievance of the Revenue is that the first appellate authority ought to have found that the deceased was a married woman and, therefore, she could not have an independent domicile other than that of her husband.
2. Dr. (Mrs.) Mary Cherian passed away on 16th Oct., 1981. The Accountable Person at the time of filing the statement of accounts stated that the deceased was domiciled in Bahrain. In support of his claim the Accountable Person file before the Asstt. CED a letter dt.
16th Sept., 1979 written by the deceased from Bahrain to her husband wherein she has specifically and categorically expressed her desire that she had decided to adopt the domicile of Bahrain and settle down in Bahrain permanently. It was also stated that the change of domicile was also prompted by reason of her terminal illness and the medical practice she had established. The claim of the Accountable Person was rejected by the learned Asst. CED vide para 2 of his order observing as under : "The deceased was an Indian Passport holder and a citizen of India. Her husband and children are living in India. She has not acquired any immovable property outside India. The only evidence produced by the Accountable Person is a letter written by the deceased before her death. In this connection it is to be stated "that even a declaration in a Will has no conclusive value and that the matter has to be determined on the basis of the place of permanent residence. This observation is made by the Madras High Court in the case of C. F. D.vs. Ida Bella Scuddar (1980) 123 ITR 104 (Mad)." Discussing the point in detail, the learned Assessing Officer came to the conclusion that by virtue of Ss. 15 and 16 of the Indian Succession Act, the deceased cannot haves any domicile other than the domicile of her husband. The claim of exemption with regard to the N.R.E. Accounts was also rejected by the learned Assessing Officer as he was of the opinion that at the time of death r. 8(d) of the ED Rules are clearly applicable in the case of then deceased. Whatever be the position with regard to Income-tax and wealth-tax of the N.R.E. accounts and the accrual of the interest thereon, such exemptions cannot be made applicable as far as ED Act is concerned. He also came to the conclusion that even if the claim of the Accountable Person that the deceased was domiciled outside India (Bahrain) is decided in her favour, the Non-Resident External Account cannot be taken as a deposit outside India.
3. Aggrieved by the above order of the Assessing Officer, the Accountable Person preferred an appeal before the first appellate authority. Following are the main grounds urged before the first appellate authority by the Accountable Person : (a) The fact that the deceased was an Indian Passport holder and citizen of India and because her husband was an Indian domicile and she has not acquired any immovable property outside India cannot dislodge the claim of the Accountable Person that the deceased had by choice became a domicile of Bahrain.
(b) The decision of the Madras High Court in CED vs. Ida Bella Scuddar (1980) 123 ITR 104 (Mad), relied on by the Assessing Officer is distinguishable. The case relied upon by the Assessing Officer so as to negative the contention of the Accountable Person, in fact, support the case of the Accountable Person. In the above case, their Lordships described the Indian Succession Act as allowing a person to have his/her domicile at the time of death and succession to immovable property shall be regulated by the law of the country in which such person had his/her domicile at the time of death and domicile is classified under three heads, namely (i) By birth, (ii) By choice and (iii) By operation of law and in the instant case the deceased by choice has acquired the domicile of the country by her long habitation.
(c) Sec. 15 of the Indian Succession Act cannot override the charging S. 5 where she had by her option acquarred a domicile by choice of Bahrain.
(d) The learned Assessing Officer was not correct in stating that the N.R.E. Accounts maintained by the deceased in various banks though located in India, are not exempted from ED Act although, r. 8D of the ED Rules says that the bank accounts located in India are considered to be in Indian still the N.R.E. Account Rules framed by the Government makes it abundantly clear that so long as the deceased lived in Bahrain, these accounts are freely transferable. Though the N.R.E.Account is located in India, interest accrued thereto is not included as income in India. For the purpose of wealth, the same is excluded.
Therefore, for estate duty purposes alone the N.R.E. Account cannot be treated as taxable in India. Being a resident of Bahrain from 1st Jan., 1972 till her death on 16th Oct., 1981, the deceased continued the medical practice by virtue of work permit which was renewed from year to year.
4. The first appellate authority held that inspite of fact that her husband was an Indian domicile, the deceased acquired a domicile of Bahrain by choice. Just as in the case relied upon by the Assessing Officer [ (1980) 123 ITR 104 (Mad)] in the instant case also, the deceased had no idea of going back to the country of her origin. The letter dt. 16th Sept., 1979 written by the deceased from Bahrain to here husband makes it clear that by choice she has acquired the domicile of Bahrain where she intended to spend the rest of her life.
Reproducing the letter in para 6 of his order and discussing the question of acquisition of domicile by choice in para 7 of his order, the first appellate authority vide para 8 of his order held that the deceased was a permanent resident in Bahrain and had no intention of returning to India. Relying upon the decision of the Madras High Court wherein their Lordships have quoted the following passages from Cheshires Private International Law, 9th Edition, at page 171, he held that the deceased was domiciled in Bahrain : "The traditional statement that there must be a present intention of permanent residence merely means that so far as the mind of the de cujus at the relevant time was concerned he possessed the requisite intention. The relevant time varies with the nature of the inquiry. It may be past or present. If, for example, the inquiry relates to the domicile of a deceased person, it must be ascertained whether at some period in his life he had formed and retained a fixed and settled intention of residence in a given country. Once this is established, evidence of his subsequent fluctuations of opinion as to whether he would or would not move elsewhere will be ignored." "It is impossible to lay down any positive rule with respect to the evidence necessary to prove intention. All that can be said is that every conceivable event and incident in a mans life is a relevant and an admissible indication of his state of mind. It may be necessary to examine the history of his life with the most scrupulous care, and to resort even to hearsay evidence where the question concerns the domicile that a person, now deceased, possessed in his lifetime.
Nothing must be overlooked that might possible show the place which he regarded as his permanent home at the relevant time." 5. It is against this finding of the first appellate authority that the Revenue is in appeal before the Tribunal. The learned Senior Departmental Representative, at the time of hearing, submitted before us a paper book containing certificate issued by (i) South Indian Bank Ltd. dt. 24th Jan., 1986, (ii) Central Bank of India dt. 24th Jan., 1986, (iii) Indian Overseas Bank dt. 25th Jan., 1986; copy of licence for practice of Medicine issued by the Ministry of Health, Bahrain dt.
1st Jan., 1972; and a letter written by Amminey addressed to Appoose, form Manama, Bahrain dt. 16th Sept., 1979. The Licence No. 41 issued by the Ministry of Health. Bahrain, dt. 1st Jan., 1972 which is valid for one year. The last renewal of licence is valid upto 31st Dec., 1981.
However, the licence holder expired in London on 16th Oct., 1981.
6. The learned Senior Departmental Representative vehemently contended that a vital point was not considered by the learned first appellate authority in the proper perspective. Sec. 15 of the Indian Succession Act deals with "domicile acquired by a woman on her marriage" and S. 16 deals with "Wifes domicile during marriage. These relevant sections are reproduced below : "15. Domicile acquired by woman on marriage. - By marriage a woman acquired the domicile of her husband, if she had not the same domicile before.
16. Wifes domicile during marriage. - A wifes domicile during her marriage follows the domicile of her husband.
Exception. The wifes domicile no longer follows that of her husband if they are separated by the sentence of a competent Court, or if the husband is undergoing a sentence of transportation." He further contended that the deceased was not a divorcee nor was judicially separated. She has not acquired any property outside India.
She sent money in her name. Her children are studying in India. She helped her husband by sending visa to visit her occasionally. Even after sending the purported letter expressing her desire to settle down permanently in Bahrain, she was assessed as a resident. All these facts were not considered by the first appellate authority and, therefore, he urged that the decision is wrong and liable to be set aside.
7. The learned Senior Departmental Representative also distinguished the case of the deceased from the case of Dr. Ida Bella Scuddar (supra), which was relied upon by the first appellate authority to hold that the deceased has acquired by choice the domicile of Bahrain. He also relied upon the decision of the Madras High Court in CED vs. RM.Muthappan (1991) 189 ITR 760 (Mad). The learned Departmental Representative contended that mere intention alone is not sufficient to say that the deceased had acquired a domicile because as far as Bahrain is concerned normally that Government does not give domicile status to a person, especially in her case where the extension for the work permit is renewed year after year. However, the learned Departmental Representative was fair enough to concede that the genuineness of the letter is not disputed by the Department. The learned Departmental Representative did not question the genuineness of the latter but expressed doubts on the veracity of the theory of acquisition of domicile by choice in view of her subsequent conduct on the ground that she had invested almost all her immovable and movable properties in India. The only valuable she possessed at the time of her death at Bahrain was a T.V., V.C.R. and a very small amount of money. The clinic was rented one and even the resident was also rented. Under these circumstances, even the letter which is relied upon the Accountable Person can only be given limited credence.
8. Opposing the contentions of the learned Senior Departmental Representative, the learned representative of the Accountable Person vehemently argued that the Government of Bahrain had given a permit which is normally given only to locals. The timing of the letter written by the deceased to her husband is also relevant. The Department had never a case that the letter was prompted or motivated. He further submitted that the acquisition of agricultural or other properties is not important in deciding the question of domicile. The IT Act does not differentiate the mode of acquisition and there is no restriction put by the Act for the acquisition of properties by a non-resident in India. Under Foreign Exchange Regulation Act a permission is required for acquisition of properties. The domicile by choice cannot be super-imposed by any external power. He relied upon the decision of the Madras High Court in the case of Dr. Ida Bella Scuddar (supra).
9. We have heard both parties and perused the documents produced before us. Under the Indian Succession Act, 1925 (Act XXXIX of 1925) S. 4 specifies the persons to whom the Act is not applicable, i.e., a Hindu, Mohammandan, Buddhist, Sikh or Jaina. Sec. 5 regulates succession to deceased persons immoveable and moveable property. This section applies to the immoveable property in India of a deceased person. Wherever such persons may have had his domicile at the time of death, the succession to such propriety shall be regulated by the law of India. Succession to the movable property of a deceased person shall be regulated by virtue of S. 5(2) by the law of the country in which such person had the domicile at the time of death. Sec. 6 of the Act says that a person can have only one domicile for the purpose of succession to moveable property. Sec. 7 determines the domicile of origin of a person of legitimate birth, S. 8 deals with domicile of origin of illegitimate child and S. 9 deals with domicile of origin prevailed until a new domicile has been acquired by a person. Sec. 10 talks about the mode of acquisition of new domicile. For our purpose, S. 10 deserves special attention. The same is reproduced below : "10. Acquisition of new domicile. - A man acquires a new domicile by taking up his fixed habitation in a country which is not that of his domicile of origin.
Explanation. A man is not to be deemed to have taken up his fixed habitation in India merely by reason of his residing there is the civil, military, naval or air force service of Government, or in the exercise of any profession or calling." The next sections with which we are concerned are Ss. 15 and 16 which lays down the law regarding the acquisition of domicile by woman on marriage and wifes domicile during marriage.
10. As we have noted above, while the word used in S. 10 is man, the word used by the legislature in Ss. 5, 6 and 7 is persons. It cannot be said that the legislature was unaware of the difference between the word person used in Ss. 5 to 7 and the word man used in S. 10. This might have been done with a purpose in view of the succeeding Ss. 15 and 16. Sec. 15 specifically discusses the mode of acquisition of a new domicile by a woman on her marriage. Sec. 16 is in a way an Explanation to S. 15 which says that a wifes domicile during her marriage follows the domicile of her husband. This section gives two exceptions (a) if the husband and wife are separated by the sentence of a competent Court, or (b) if the husband is undergoing sentence of transportation.
As Lord Denning M.R. observed in Gray vs. Formosa (1963 p. 259 at 267) this rule may be "the last barbarous relic of a wifes servitude", but, when the law as enacted by the legislature is specific and clear, the interpreting authorities cannot go beyond the language of the provision and substitute its reasoning whatever be the hardships that may result to the subjects. Before going to the other points advanced by the Accountable Person to support the order of the first appellate authority, we would like to discuss the case of Ida Bella Scuddar (supra) relied on by the Accountable Person. This was a case where a noble American lady left her country of origin and came to India to serve the suffering masses. The pamphlet which fired the imagination of this noble lady, "The claims of six hundred millions" once and for ever fixed her mind and body in India serving the suffering masses especially the neglected womanfold. Except going back to America in furtherance of the advancement of the institution which she started, she never went back to United States, the domicile of her origin. She had no attachment to her country of origin. Her family was the teaming millions of India. A perusal of the judgment of the Honble Madras High Court will take it clear that as their Lordships observed in page 114 "there could have been no sentimental attachment to one like her who dedicated herself to the missionary activities, to go to a country with which her connections were only tenuous. Originally she appeared to have an idea of marrying and quietly settling down in life. But that was abandoned at a very early age when, after her studies she came over to India, and found a crying need for women doctors and a well-equipped hospital". So, in the instant case, the very material difference may be summed up as under; May be both the deceases and Dr. Ida Bella were professional doctors. But, she was having no family of her own other than the suffering millions. She was never married. If she had married, their Lordships might have differentiated her case and held that her domicile is the domicile of her husband and not the domicile where she settled at last. When the provision of law is clear, as we have noted earlier, the difficulties and the probabilities cannot get an overriding effect upon the clear provisions of law. For this simple reason, we are of the opinion that the reliance placed by the learned first appellate authority on Dr. Ida Bella Scuddars case to support the case of the Accountable Personal is clearly misplaced. As we have noted above, S. 10 of the Indian Succession Act speaks acquisition of domicile only about a "man". If the legislature had intended that a woman can also have that privilege it would have used the word person in Ss. 15 and 16 also, as in Ss. 5, 6 and 7. If woman is discriminated as against man in these sections, it is matter to be agitated before the Higher Forums and not before the Tribunal. The Tribunal being the creature of the statute cannot sit upon and decided it.
11. The argument of the learned Accountable Person that S. 5 has an overriding effect upon S. 15 is an argument devoid of merit. Sec. 5 speaks only about the mode of succession to the immovable properties of a deceased person whose domicile at the time of death is Indian domicile. This section does not speak of the mode of acquisition of domicile or the losing domicile by the act of law. It speaks only about a person whose domicile is finally decided.
12. The learned senior Departmental Representative also relied on the decision in CED vs. R. M. Muthappan (supra), and contended that the finding of the first appellate authority that the deceased had expressed her will by the purported letter addressed to her husband that she intended to settle down in Bahrain permanently and desired to adopt Bahrain as her domicile in preference to Indian domicile, cannot be accepted. In (1991) 189 ITR 760 (Mad), the deceased obtained a passport, citizenship and in will expressed that he had declared his domicile with a desire that the bequest should take effect according to the law of Malaya. However, the Court did not accept the contention of Accountable Person and decided the issue against the assessee in the case cited supra. The learned Departmental Representative contended that this was a case where the Will executed was negative by the Court.
On the other hand, in the instant case of the assessee, it is only a private letter written by the deceased to her husband intimating her will to change the domicile. Of course the genuineness of the letter is not disputed. But, the fact that she was a married lady whose family was away in India and her relation with the family was cordial, is indicative of the factor that the expression in the letter cannot be accepted in toto. In our considered view, whatever be her personal choice it has no legal effect in view of the clear provisions of Ss. 15 and 16 of the Indian Succession Act.
13. For reasons stated above, we hold that the decision of the first appellate authority deserves to be set aside. We order accordingly.