1. This appeal by the department arises out of the proceeding for the assessment of estate duty and the only point involved is regarding the extent of relief admissible under Section 31 of the Estate Duty Act, 1953 ('the Act').
2. Rameshwar Khetan, the deceased, was formerly a partner in the firm of Balchand Rameshwardas. The other partner was his father Balchand, Balchand died on 10-4-1970. On the said death, the deceased, Rameshwar inherited the interest of Balchand in the partnership firm. He then became the sole proprietor of the said business. The deceased also inherited self-occupied flat as well as motor car and jewellery. The above properties passed on the death of Balchand and were inherited by the deceased Rameshwar on 10-4-1970. Within nearly nine months of his inheriting this property, the deceased, Rameshwar, died on 18-1-1971.
Hence, the said property, which had passed on the first death, passed again on the second death which took place within about nine months.
Consequently, provisions of Section 31 for grant of quick succession relief were attracted.
3. The Assistant Controller granted relief of Rs. 1,834 under Section 31 as per directions of the Board. The Controller (Appeals) calculated the relief in accordance with the provisions of Section 31 on the value of the property that passed twice in quick succession and accepted the claim of the accountable person for grant of relief of Rs. 21,682 under the said provision. The department has now come in appeal before us and the only ground raised is that the learned Controller (Appeals) erred in holding that quick succession relief of Rs. 21,682 was admissible and not of Rs. 1,834 allowed by the Assistant Controller.
Where the Board is satisfied that estate duty has become payable on any property passing upon the death of any person, and that subsequently within five years estate duty has again become payable on the same property or part thereof passing on the death of the person to whom the property passed on the first death, the amount of estate duty payable on the second death in respect of the property so passing shall be reduced as follows: Where the second death occurs within one year of the first death, by fifty per cent.
Where the second death occurs within two years of the first death, by forty per cent.
Where the second death occurs within three years of the first death, by thirty per cent.
Where the second death occurs within four years of the first death, by twenty per cent.
Where the second death occurs within five years of the first death, by ten per cent.
4. We asked the learned departmental representative to point out if there was any error in the findings of the Controller (Appeals) that the property mentioned above was the subject-matter of passing in quick succession and that if relief is calculated at the rate mentioned in Section 31, the relief would work out to Rs. 21,682. No error was pointed out to us. Hence, we accept the finding of the Controller (Appeals) to the effect that the property mentioned above had passed twice in quick succession, first on death of Balchand on 10-4-1970 and second on the death of the deceased Rameshwar on 18-1-1971. The second death had occurred within one year of the first and, as such, in terms of Section 31, relief to the extent of fifty per cent was admissible and that relief on calculation came to Rs. 21,682.
5. The main contention of the learned departmental representative was that under Section 31, the extent of relief is to be determined by the Board and not by the Assistant Controller. It was pointed out that the Board had determined the relief at Rs. 1,834, and, as such, the Assistant Controller had no option but to grant relief only to the extent of Rs. 1,834 even though admissible relief in terms of Section 31 worked out to a higher amount. According to the learned departmental representative, the question of extent of relief was in the absolute discretion of the Board and the accountable person had no locus standi to make a claim for a higher amount.
6. The contention of the learned Counsel for the assessee, on the other hand, was that the jurisdiction of the Board was confined to deciding whether quick succession relief was admissible. The extent of relief is a matter of calculation in accordance with the provisions of Section 31 and that calculation is to be made by the Assistant Controller and the relief is also to be granted by him. Hence, he was bound to give relief as was admissible in terms of Section 31, once the Board communicated its satisfaction on the point that the quick relief succession was admissible.
7. We have considered the rival submissions. We have already quoted Section 31. A perusal of said section indicates that what the Board has to satisfy itself is whether the estate duty had become payable on any property and whether subsequently within five years, estate duty had again become payable on the same property or any part thereof passing on the death of the person to whom the property passed on the first death. It is only on these facts that the board has to record its satisfaction. Once the satisfaction of the Board on those facts is communicated, the process of calculation of the relief commences. The calculation of the relief is obviously to be made by the Assistant Controller. Section 31 does not say that the Board shall in its discretion determine the relief to be given. On the other hand, the mandatory language of the second part of that section indicates that the relief to be given is to be calculated in accordance with the scale given therein. The relief varies with the period that elapses between the two deaths. It is fifty per cent if the period is less than a year, it is ten per cent when the period is more than four years and less than five years. Thus, no discretion is given to any authority in working out the relief. The relief is to be worked out in accordance with the express provision of the section and obviously this working is to be done by the Assistant Controller, when he prepares the demand for the duty payable. We, therefore, hold that the Assistant Controller should have calculated the relief in accordance with the provisions of Section 31 after receipt of the communication from the Board regarding its satisfaction about the facts mentioned before. The Controller (Appeals) has calculated that relief and granted the same. Hence, there is no ground to interfere in the order of the Controller (Appeals).
8. We may mention here that no decision had been cited before us in support of the rival submissions by the parties. However, we may, with benefit, refer to the decision of the Madras High Court in K.C.Manavedan v. Dy. CED  55 ITR (ED) 36. One of the questions that was considered by the High Court was whether the Assistant Controller was bound to reduce the amount of estate duty payable by grant of relief under Section 31 at the time of raising demand. The High Court held that he was bound to do so in view of the mandatory provision of Section 31. It was argued before the High Court on behalf of the department that the relief had to be granted by the Board, which was an authority different from the assessing authority under the Act and, as such, the demand for the full amount of tax could be correctly made.
Their Lordships dealing with this contention observed as follows: ...I am not disposed to agree with this argument....But when it comes to the question of demand of duty, Section 31 reduces the amount of estate duty payable in a particular manner. Before a demand can therefore be issued to the accountable person calling upon him to pay estate duty, Section 31 must be applied and the demand can therefore issue only that amount of duty payable as reduced by the application of that section. It is clear then that the demand for the full amount of tax is illegal;....
9. It is true that the facts in that case are not identical with the facts of the present case. However, the ratio of that decision is that provisions of Section 31 were mandatory and the Assistant Controller was bound to give effect to those provisions at the time of raising the demand. In the present case also, at the time of raising the demand, the Assistant Controller was bound to calculate the relief in accordance with the provisions of Section 31 and reduce the amount payable by the said relief.