1982 (9) TMI 10 - HC - Income Tax

Summary

Issues:
1. Valuation of estate for estate duty assessment.
2. Refusal of Asst. Controller to grant stay of collection of estate duty.
3. Exercise of discretionary powers under sections 70 and 73(4) of the E.D. Act.
4. Comparison with a similar case under the I.T. Act.
5. Consideration of relevant circumstances for granting stay of estate duty collection.

Analysis:
1. The petitioners, as legal representatives, filed an estate duty return under the E.D. Act based on the deceased being a member of a joint family at the time of his death. The Asst. Controller determined the principal value of the deceased's share in the joint family at Rs. 5,27,069. Disputes regarding property valuation led to appeals before the Controller and the Tribunal. The Tribunal allowed the accountable persons' appeal but dismissed the Revenue's appeal, leading to pending reference to the High Court on property valuation issues.

2. The Asst. Controller initiated rectification proceedings under section 61 of the E.D. Act, resulting in an increase in the principal value of the estate to Rs. 22,01,384. The accountable persons appealed this enhancement to the Controller under section 62. The Asst. Controller refused to grant stay of estate duty collection on the enhanced principal value, citing the appeal's alleged non-maintainability and prior refusals by other authorities.

3. The High Court clarified that the Asst. Controller's power under section 70 to postpone estate duty collection is independent of appeal maintainability. The discretionary power under section 73(4) is relevant only for the Controller. The court emphasized that the Asst. Controller must exercise discretion under section 70 without considering decisions by other authorities, as seen in the case of K.M. Rahmath Bibi v. First ITO [1969] 72 ITR 73 (Mad).

4. The court compared the present case with the I.T. Act, highlighting the duty of the assessing officer to exercise discretion lawfully and reasonably. The scope of powers under sections 220(3) and 220(6) of the I.T. Act was discussed to emphasize the importance of considering relevant circumstances while deciding on stay of tax collection.

5. The High Court quashed the Asst. Controller's order refusing stay of estate duty collection, directing a fresh consideration based on relevant factors and potential hardships faced by the accountable persons. The court stressed the need for the Asst. Controller to act in accordance with law and reason, considering all relevant circumstances before making a decision on the stay of estate duty collection.