SMT. DHAN KAUR Vs. CONTROLLER OF ESTATE DUTY.

JUDGEMENT

(1.) THE following question of law has been referred at the instance of the accountable person under s. 64(1) of the ED Act, 1953 (for short, "the Act") :

(2.) JOGINDER Singh died on 3rd November, 1981. His widow, Smt. Dhan Kaur, filed return under the Act, furnishing the account of the estate left by her late husband and showing the principal value of half property as assessable under the Act. Assessment of estate duty was made by the Asstt. CED on 19th February, 1983 on one half of the net estate of the deceased, valued at Rs. 2,54,483. Thus, as intended by the accountable person, assessment was made on only half of the estate of the deceased. The late Joginder Singh was the Karta and sole surviving male coparcener of his Hindu undivided family (HUF). He was survived by his widow and a married daughter. He had left behind 19 acres of agricultural land valued at Rs. 3,12,645 and foodgrains, milch cattle, agricultural implements etc., valued at Rs. 10,000. Value of half share of the deceased in the agricultural land, milch cattle, etc., was taken at Rs. 1,61,323 on the ground that the deceased was entitled to only half of the estate and was actually not an absolute owner of the property belonging to the HUF. The Asstt. CED, on an audit objection, reopened the case subsequently by issuing a notice to the accountable person under s. 59 of the Act. A view was taken that the deceased, being the sole surviving male coparcener, was competent to dispose of the entire HUF property in whatever manner he liked. The entire property thus belonged to him as an individual as well as Karta of the HUF. The Asstt. CED then proceeded to assess the entire value of the HUF property instead of its half value which had been assessed earlier.

(3.) SHRI B. S. Gupta, Senior Counsel representing the accountable person, has argued that the reopening was bad in law inasmuch as it was based on an audit objection which did not constitute information for the purposes of reopening the case under s. 59(b) of the Act. It has been argued by Shri Gupta that the audit report of the Comptroller and Auditor General of India (CAG) was not admissible as information in the hands of the Asstt. CED. It is also pointed out by Shri Gupta that the Asstt. CED, on coming to know about the alleged mistake pointed out in the local audit, looked into the matter and accepted the audit objection initially. However, the Asstt. CED subsequently took the view that the objection was not acceptable. The IAC, however, insisted upon the reopening by the Asstt. CED. Shri Gupta has argued that, in such a situation, the Asstt. CED cannot be said to have any reason to believe, on the basis of the information, that any property chargeable to estate duty has escaped assessment.