SHEILA PRASAD Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) At the instance of the accountable person, Smt. Sheila Prasad, the Income-tax Appellate Tribunal, Allahabad, has made this reference soliciting the opinion of this court on the following question of law : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that a sum of Rs. 28,574 refunded by the Income-tax Department to the widow of the deceased several years after the death of the deceased was the estate of the deceased passing on his death to the accountable person in terms of Section 5(1) of the Estate Duty Act, 1953 ?"

(2.) The facts in so far as they are material for the purpose of this reference application are that Col. Ajit Prasad secured his premature retirement from Army in February, 1970 ; he got his pension commuted for a sum of Rs. 54,452. Out of this amount, Col. Ajit Prasad was paid only a sum of Rs. 33,714, because the remaining amount of Rs. 20,708 was retained and made over to the Income-tax Department under Section 226(2) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), towards the amount of income-tax outstanding for the assessment years 1957-58 to 1968-69, on the basis of the ex parte assessment orders passed under Section 144 during his lifetime. Col. Ajit Prasad died on 1st September, 1971, and thereafter, his widow, Smt. Sheila Prasad, the accountable person, moved the Commissioner of Income-tax under Section 264(1) for setting aside the ex parte assessment orders passed against Col. Ajit Prasad. She also moved the CBDT under Section 119 praying for a condonation of the delay in presenting the aforesaid application. The CBDT condoned the delay. The Commissioner also accepted her application under Section 264(1), Accordingly, fresh assessments were made on her under Sections 143(3)/159 as legal representative of her husband. As a result of revised assessment she was not only refunded the aforesaid amount of Rs. 20,708 but also got a further sure of Rs. 7,856 being extra tax deducted from the annual salary of the deceased while he was in service (total Rs. 28,574).

(3.) Before the Asst. Controller, the contention on behalf of the accountable person was that since these amounts were received by her after November, 1973, they could not be deemed to have accrued to the deceased and should not be added to the estate left by him. However, the Asst. Controller did not accept this contention. He took the view that the refund was due to the deceased because the amount was attached incorrectly and as a result of the assessment in the lifetime of the deceased, had the deceased lived, he would have secured these refunds. He, therefore held that the refund of Rs. 28,574 was due to the deceased at the time of his death.