1. These two cross-appeals under the Estate Duty Act, 1953 ('the Act') since involved certain common issues, the same were heard together and are disposed of by this consolidated order for the sake of convenience.
2. When estate duty matter in case of Shri Beni Parshad, deceased, wherein Smt. Bimla Devi was an accountable person, was finalised by the Assistant Controller and estate duty return in respect of the estate of the deceased was filed on 9-11-1973. In course of assessment proceedings under the Act, details were furnished by the accountable person of all the life insurance policies which were financed out of the individual funds of the deceased and/or out of the funds of HUF of which the deceased was a coparcener. Out of the nine policies, one was in respect of estate duty and the rest of the eight policies as per statements available on record, a sum of Rs. 2,11,923 was admitted as death claim, out of which Rs. 84,729 were deducted by the LIC in respect of loans advanced by the LIC to the deceased and net payments were shown at Rs. 1,27,195. In course of filing the details of estate left by Shri Beni Parshad, four life insurance policies were stated to be financed by the deceased Shri Beni Parshad from his individual funds and a sum of Rs. 81,580 in respect of these four payments was shown as individual assets. The payments in respect of the remaining four policies were stated to have been financed by the HUF and insurance proceeds in respect of these payments were shown as assets of the HUF.The Assistant Controller sought all the evidence in respect of these details in the course of assessment and framed the original assessment on 12-8-1976 wherein a sum of Rs. 81,580 was included in the individual assets and sum of Rs. 57,309 was considered a HUF asset. The said assessment came to be scrutinised by audit, the first objection being the quantum of aggregate of the insurance money taxable in the principal value of the estate and second being regarding legal aspect pertaining to the action of the Assistant Controller in holding that insurance proceeds aggregating to Rs. 57,309 were part of the assets of theHUFand not part of the individual assets. There were other objections too. As a consequence of this audit objection, the reassessment proceedings were initiated by the Assistant Controller. In the reassessment proceedings, the entire matter was thrashed out in great detail and the said reassessment order was framed on 30-3-1979.
The Assistant Controller even in the course of reassessment proceedings confirmed the earlier action which was available from the original assessment. The audit once again objected even to the reassessment order dated 30-3-1979 on the ground that sum of Rs. 57,309 was taxable as individual asset and not as HUF asset in view of legal position of this case which is well detailed in the order of the Appellate Controller including the reasons incorporated in the order sheet entry dated 8-8-1979 as a consequence of which second reassessment was initiated. The reason as such reads as under : The audit party vide their memo No. 1 dated 26-6-1979 has pointed out that the entire amount of LIC at Rs. 2,11,923 should be treated as the estate belonging to the deceased instead of Rs. 15,464 as taken by the ACED. On the basis of the observations of the audit objection I am satisfied that the estate to the tune of Rs. 57,309 has escaped assessment in the individual capacity of the deceased.
Under the circumstances notice under Section 59 be issued immediately.
3. As a consequence, a notice under Section 59 of the Act was made by the Assistant Controller on 8-8-1979 which was despatched on 19-9-1979.
As per this second reassessment, the wishes of the internal audit were fulfilled besides the treatment given to the insurance policies as per audit suggestion, even cost of two plots, one at Chandigarh and the other at Ropar, came to be added in the dutiable estate.
4. When the said estate duty assessment came to be disputed before the Appellate Controller, the accountable person not only objected to the initiation of reassessment proceedings but also contended that it is barred by time and also disputed the additions made in the course of reassessment proceedings. The Appellate Controller, since accepted the contention of the assessee that reassessment was bad in law and annulled the reassessment, considered the assessee's contention regarding assessment being out of time as academic and he also did not give any finding on merit. The revenue in its appeal has contested the action of the Appellate Controller in annulling the reassessment whereas the assessee in its regular appeal has raised as many as six grounds, first being that reassessment proceedings are barred by time and assessment is void ab initio and also has contested the additions on merit. The learned departmental repres"ntative mainly attacked the order of the Appellate Controller on the basis that it is not a change of opinion ; audit memo has simply drawn attention of the Assistant Controller to facts and not to law, at most, according to him, he has drawn attention of the Assistant Controller to correct interpretation of law. He also submitted that there is concealment of plots but he was fair enough to admit that the same were not included in the reasons.
He, however, did not dispute the facts after verifying his record that the reassessment notice in respect of impugned assessment was dated 8-8-1979, it was issued on 19-9-1979 and the impugned assessment was framed on 18-3-1981. Regarding the service of notice he relied on the case of Jai Hanuman Trading Co. (P.) Ltd. v. CIT  110 ITR 36 (Punj. and Har.)(FB).
5. The learned counsel for the assessee, on the other hand, submitted that even in second reassessment proceeding initiation, the reason is same and he relied on the cases in Seethalakshmi Ammal v. CED  61 ITR 317 (Mad.), CIT v. Dinesh Chandra H. Shah  82 ITR 367 (SC), Bankipur Club Ltd. v. CIT  82 ITR 831 (SC) and M. Pathumma Kutty Umma v. ACED  1 1TD 56 (Coch.). He submitted that the very initiation of second reassessment, proceedings were out of time as the said notice ought to have been physically issued by 11-8-1979 which was actually issued on 19-9-1979.
6. After taking into consideration the rival submissions and going through the facts on record very carefully, we are unable to interfere in the finding of the Appellate Controller regarding annulment of the second reassessment. In addition, we also hold that the second reassessment was barred by time. There is no dispute about the fact that the notice was only dated 8-8-1979 audit moved from the office of the Assistant Controller on 19-9-1979 and there is no dispute that the last date which is important is 11-8-1979 as explained in next para till the said notice was lying in the office of the Assistant Controller.
7. We had occasion to deal at length with an identical issue in another case of Kirpal Singh [ED Appeal No. 52 (Chd.) of 1978-79, dated 10-1-1980] in which we had dealt at length with the issues pertaining to the issue of notice and service of notice. The instant case is even on a stronger footing so far as claim of the accountable person is concerned because till the last date when the notice should have been served it did not move out of the file of the Assistant Controller.
There is no dispute about the date of first assessment which is 12-8-1976 and Section 73A(b) of the Act which is relevant reads as under : 73A. No proceedings for the levy of any estate duty under this Act shall be commenced- (b) in the case of a reassessment, after the expiration of three years from the date of assessment of such property to estate duty under this Act.
The last date, therefore, comes to be 11-8-1979 by which proceedings should have been initiated whereas the notice moved out of the Assistant Controller's file on 19-9-1979. The question of its service earlier than 11-8-1979 was an impossibility. The second reassessment proceedings even otherwise are invalid as it is the same reason on the basis of which audit pestered the accountable person in this case twice. For the reasons given by the Appellate Controller in his order and because the impugned assessment is out of time, the same is annulled. We are not taking into consideration the other grounds raised by the accountable person in its appeal as the same would be only academic.
8. In the result, the revenue's appeal is dismissed and that of the accountable person is allowed as indicated above.