1. The point that arises for determination in this petition is whether the Assistant Controller of Estate Duty (who will be hereafter referred to as 'the Assistant Controller') was within his powers in rectifying the original order of assessment as per his order dated May 18, 1961. It is the validity of this order that is being challenged in these proceedings.
2. One D. T. Srinivasa Setty was partner in two firms, viz., Messrs. Devatha Venkatramaiah & Sons and Messrs. Ramalaxman & Co. Each of these firms had three partners. Srinivasa Setty died on June 26, 1957, leaving behind him the petitioner as his heir. The books of account of the two partnership firms were produced before the Assistant Controller. In computing the value of the estate left by the deceased, the Assistant Controller left out of account : (1) the charity fund, (2) the reserve fund and (3) the fund in the khatha of God's account. No reasons were assigned by the Assistant Controller for excluding from consideration these funds in valuing the estate left by the deceased. From the records of the case, it is seen that the Assistant Controller was aware that there were partnership deeds evidencing the terms of the partnerships mentioned above. But these deed had not been produced before him nor did the petitioner plead before him that she had no share in those funds. But yet, the Assistant Controller did not take into consideration the share of the deceased in those funds. Evidently, he overlooked the fact that the deceased was entitled to a share in those funds.
3. The original assessment order was made on January 31, 1958, by the Assistant Controller, His successor called upon the petitioner on July 27, 1959, to produce the copies of the partnership deed relating to the firms mentioned above. Those partnership deeds were accordingly produced. After perusing the partnership deed, the Assistant Commissioner intimated the petitioner on November 5, 1960, that on a scrutiny of the accounts it was found that there was substantial reserve fund and other sundry accounts like God's a/c, Charity a/c, etc., and that the deceased's share in the reserve fund, Charity a/c. and God's a/c., etc.in the two firms amounted to Rs. 20,947, but the same had not been included in the estate of the deceased. He further informed the assesses-petitioner as follows :
'Please let me know before November 25, 1960, whether you have any objection for the rectification of the assessment under section 61 of the Estate Duty Act on the above lines.'
4. The petitioner objected to the rectification as per her communication dated April 21, 1961, After examining the objections filed by the petitioner, the Assistant Controller rectified the mistake, purporting to act under section 61 of the Estate Duty Act. That section authorities him to rectify any mistake apparent from the records, within the prescribed period.
5. It is not contended before us that under the terms of the partnership deeds, the deceased was not entitled to any share in the funds in question. No oral agreement contrary to the terms of the partnership deed is pleaded, even if any such pleas could be raised. On the basis of the records as they stood before the Assistant Controller, he should have taken into consideration the share of the deceased in the funds in question. It is not known why he ignored those funds. Possibly, he overlooked that aspect of the case. At any rate, the error committed by the Assistant Controller is apparent from the records. It cannot be said that the point in question is an arguable point. To our mind it appears only that conclusion could have been reached on the basis of the records before the Assistant Controller. The present case is clearly a case falling within the ambit of section 61 of the Estate Duty Act.
6. It was contended by Sri K. Srinivasan, the learned counsel for the petitioner, that the mistake alleged, even if it is considered as a mistake, cannot be said to be apparent from the records. The distinction between a 'mistake on the face of the record' and 'a mistake from the record' is well brought out by the decision of the Supreme Court in Income-tax Officer, Alwaye v. Asok Textiles Ltd. The true test is whether the order that is rectified is clearly wrong on the basis of the records available before the assessing authority on the date of the assessment. If the point in question is an arguable point, then the same cannot be said to be a mistake apparent from the records : see Maharana Mills (Private) Ltd. v. Income-tax Officer, Porbander. If on the other hand, the decision is clearly erroneous or the point in question does not admit of any argument, then the case undoubtedly falls within the scope of section 61. The present case is one such. The fact that the Assistant Controller did not care to secure the partnership deeds but proceeds to assess the petitioner without perusing those deeds is wholly irrelevant. If the partnership deeds were not before the Assistant Controller as was the case here, then he should have proceeded on the basis of the material before him. Even on that basis he could not have left out of account the funds in question.
7. It is true that the petitioner has now been able to secure letters from the quondam partners of her husband saying that she had not been given any share in the funds in question. Whether these letters represent the true state of affairs or not, is unnecessary to be gone into. What is relevant for our present purpose is to find out the the true value of the estate left by the deceased and not how much she chose to secure.
8. For the reasons mentioned above, this petition fails and the same is dismissed with costs. Advocate's fee Rs. 100.
9. Petition dismissed.