1. In the writ petition the petitioner has prayed for the issue of a writ of certiorari to quash the order of the Assistant Controller of Estate Duty, dated May 21, 1966. The reference in the tax case is one under Section 64(1) of the Estate Duty Act, 1953 (hereinafter called 'the Act'). The facts in both the cases are common. One S.N. Namasivayam Chettiar (hereinafter called ' the deceased ') died in Colombo on July 12, 1958. The petitioner who is the son of Nama-sivayam Chettiar is the accountable person in respect of the estate of the deceased. The estate duty assessment was made by the Assistant Controller of Estate Duty on January 30, 1961, under Section 58(3) of the Act determining the net principal value of the estate at Rs. 4,80,419 and the duty payable at Rs. 48,162. In arriving at this principal value of the estate, a sum of Rs. 1,46,506 was allowed as a deduction on account of the deceased's income-tax and excess profits tax liabilities. The Assistant Controller has also noted at the foot of the order that the correct amount due to the deceased as double income-tax relief was not known and that the assessment would be revised later on this score. This assessment was revised twice under Section 61 on April 14, 1961, and October 13, 1964, for reasons which are not relevant for the purpose of these proceedings.
2. On the representations made by the accountable person, which will be dealt with in detail at a later stage, the Income-tax Officer settled the amount due from the deceased at Rs. 30,000 and this amount was accepted by the petitioner and paid in fall settlement of the income-tax and excess profits tax and other arrears due from the deceased. Thereupon, the certificate issued under Section 46(2) was cancelled on May 30, 1963. The Assistant Controller of Estate Duty came to know of this settlement of the amount due from the deceased at Rs. 30,000 some time in January 1966. By that time the Assistant Controller also found that the correct amount of double income-tax relief due to the assessee was Rs. 17,346. Thereupon on January 19, 1966, he issued a notice to the accountable person that, in view of the exact amount of arrears due from the deceased was settled at Rs. 30,000 and the ascertainment of the total income-tax relief due to the deceased, he proposed to revise the assessment under Section 61 of the Act so as to reduce the deduction of Rs. 1,46,506 made in the original assessment by a sum of Rs. 1,09,309. The notice to correct the mistake under Section 61 was sent to the accountable person who was in Ceylon on January 19, 1966, calling for objections, if any, regarding the reduction. Notice was also sent to Messrs. Suri & Co., the authorised representatives of the accountable person, who were representing him in these proceedings, fixing the date for hearing on January 25, 1966. Neither the authorised representatives nor the petitioner appeared on January 25, 1966. But the authorised representatives, by their letter dated January 22, 1966, which appears to have been received by the Assistant Controller on January 23, 1966, requested time to furnish a reply to the proposed rectification till February 15, 1966. The Assistant Controller had to take note of the limitation period of five years provided under Section 61 for rectification of mistakes and, therefore, did not adjourn the matter and made an order under Section 61 on January 25/29, 1966, revising the original assessment as proposed. He also noted in the order that the facts that the arrears of income-tax and excess profits tax due from the deceased was settled at Rs. 30,000 and the double income-tax relief was granted on behalf of the estate of the deceased were not in dispute.
3. The petitioner filed an appeal against this order to the Appellate Controller of Estate Duty on April 11, 1966, contending that there was no 'mistake apparent from the record ' for rectification under Section 61, that there was no proper service of notice on the accountable person as required under the provision of Section 61 and that therefore the revised order was wholly without jurisdiction. The Appellate Controller overruled both the objections. He also held that no appeal lies to him against an order under Section 61. The petitioner preferred a further appeal to the Tribunal. By an order dated January 20, 1969, the Tribunal held that Section 61 of the Act was properly invoked and Section 59 was not applicable. It also held that the facts disclosed a ' mistake apparent from the record ' giving jurisdiction to the Assistant Controller to correct the mistake. It further held that there was no appeal against the order of the Assistant Controller made under Section 61. The order of the Tribunal concluded by stating that ' no other points are pressed before us ' and the appeal was dismissed. The petitioner filed an application before the Tribunal to delete the last sentence in the order which stated that ' no other points are pressed before us ' on certain grounds which will be noted later. That petition was dismissed. Then, at the instance of the petitioner, the Tribunal referred the following question under Section 64(1) of the Act:
' Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the appeal was incompetent '
4. After the disposal of the appeal by the Tribunal the petitioner filed the writ petition praying for a writ of certiorari on the ground that the Tribunal had held that no appeal lay against the order under Section 61 and, therefore, the only remedy available for him was to invoke the jurisdiction of this court under article 226 of the Constitution. The learned counsel for the petitioner had advanced his arguments mainly in the writ petition. It was submitted by him that there was no ' mistake ' much less a 'mistake apparent from the record' within the meaning' of Section 61 of the Act. He also submitted that the petitioner had not been given a reasonable opportunity of being heard in the matter as required under the proviso to Section 61.
5. In order to appreciate and understand the first point, it is necessary to set out the facts on which that submission is advanced. The petitioner made repeated representations to the Central Board of Revenue and other authorities that the deceased who was a citizen of Ceylon discontinued his business in 1951, that he did not visit India after 1953, that major portion of the income-tax imposed on the deceased related to assessment years 1951-52, 1952-53 and 1955-56 and that the income-tax and excess profits tax were imposed on an arbitrary estimate made by the Income-tax Officer ignoring the relevant income-tax assessment orders of Ceylon income-tax authorities. He also represented that the demand had arisen only on account of the arbitrary additions not related to the income actually earned by the deceased. He also filed Writ Petitions Nos. 99/54 and 170/56 against the recovery proceedings on the ground that, since the income related to Colombo business and in view of the foreign exchange regulations of Ceylon, it was impossible for him to get any money from CeyJon and that under the proviso to Section 45 the deceased or his estate could not be treated as defaulters in respect of the same. He also obtained a stay of collection from this court in these writ petitions. After a consideration of all these representations, the department settled the amount payable by the deceased on account of income-tax and excess profits tax at Rs. 30,000 and, accepting this settlement, the petitioner remitted on May 13, 1963, the said amount in full settlement of the income-tax and excess profits tax due from the deceased and the certificate issued under Section 46(2) was withdrawn on May 30, 1963. The contention of the petitioner is that this settlement or reduction of the tax arrears was not one under any statutory provision of the Income-tax Act or the Rules framed thereunder and that it amounted to only an ex gratia reduction with no legal consequences, and that the original liability, so to say, could still be enforced as the Government could not be said to be bound by this settlement. In this connection, he relied on the decisions in Commissioner of Income-tax v. V. MR. P. Firm, Muar, : 56ITR67(SC) . H.H. Maharaja Rana Hemant Singhji v. Commissioner of Income-tax, and Mathra Parshad & Sons v. State of Punjab, : AIR1962SC745 . These decisions do not support the contention of the learned counsel for the petitioner.
6. In Commissioner of Income-tax v. V. MR. P. Firm, Muar, the facts were these. In order to give relief to the Indian nationals who were carrying on business in Malaya and who were put in a peculiar stituation due to the Japanese occupation of that territory from February, 1942, to September, 1945, Government propounded a scheme to which the assessees in that case opted. The scheme allowed set-off of losses incurred by the assessees during the five years relevant to the assessment years 1942-43 to 1946-47 against the profits of assessment years 1942-43 and 1941-42. While this was so, the Malayan Government passed an Ordinance in 1948 scaling down the debts incurred during that period. The income-tax department contended that the assessees having opted to accept the scheme derived benefit thereunder and agreed to have the discharged debts excluded from the assets side in 1he balance-sheet subject to the condition that the subsequent recoveries by them would be taxable income. They were precluded on the principle of approbate and reprobate from pleading that the income they derived subsequently by realisation of the revived debts under the Malayan Ordinance was not a taxable income. The Supreme Court held that the doctrine of approbate and reprobate did not apply and that if a particular income is not taxable under the Income-tax Act it cannot be taxed on the basis of estoppel or any other equitable doctrine.
7. In H.H. Maharaja Rana Hemant Singhji v. Commissioner of Income-tax a Division Bench of the Rajasthan High Court held that the ex gratia payments made by by the Government department to a former Maharaja of Dholpur State on the taking over of a building in Delhi was not a taxable income, being receipts of a casual or non-recurring nature. In Mathra Parshad & Sons v. State of Punjab it was held by the Supreme Court that there can no estoppel against a statute and that if a law required that certain tax is to be collected it cannot be given up and any assurance that it would not be collected would not bind the Government whenever it chose to collect.
8. In the present case, as already stated, the petitioner was disputing the liability of the deceased and the injustice caused to the deceased by reason of the arbitrary additions. There was also the fact that the petitioner and the deceased were citizens of Ceylon and that the Ceylon assessments for the relevant period were far below the assessments made in India. There was also the proviso to Section 45 which made the deceased not a defaulter in view of the foreign exchange regulations of Ceylon and the inability of the petitioner to remit money into India. Having regard to all these facts, the department proposed to accept Rs. 30,000 in full settlement of all the taxes due from the deceased and that proposal was accepted by the petitioner. This settlement was also given effect to by the petitioner paying a sum of Rs. 30,000 and the department withdrawing the certificates issued under Section 46(2). In the foregoing circumstances, we do not think that it would have been open to the department to claim any further sum than that of Rs. 30,000 already received as due from the deceased. We, therefore, do not agree with the learned counsel for the petitioner that the department was under no legal obligation not to enforce their claim for payment of the balance of the amount over and above Rs. 30,000 already received.
9. The learned counsel for the petitioner also relied on the decision of the Supreme Court in Bombay Dyeing and . v. State of Bombay, : (1958)ILLJ778SC . where the court had pointed out the difference between discharge or extinguishment of a debt and the remedy to recover the debt being barred by limitation. It was pointed out therein that under law a debt subsists notwithstanding its recovery is barred by limitation. We are unable to accept that this principle could be invoked on the facts and circumstances of this case. The settlement or compounding, or whatever it may b; called, determined what was the amount payable by the deceased and there is no question of any amount being left out of that settlement and kept for enforcement at the option of the Government at a future date. We are of opinion that the Government would be estopped from contending that any further amount was due from the deceased on account of income-tax and excess profit tax.
10. It was next contended by the learned counsel for the petitioner that it was arguable whether the entire sum of Rs. 1,46,506 was an allowable deduction or only Rs. 30,000 and on this question two views are also possible and it wculd not, therefore, come within the phrase 'mistake apparent from the record 'in Section 61 of the Act. In this connection he relied on the decision In T.S. Balaram, Income-tax Officer v. Volkart Brothers, : 82ITR50(SC) . The question for consideration in that case was the applicability of Section 17(1) of the Indian Income-tax Act, 1922, to a partnership firm. The applicability of the section depended on the meaning to be given to the word ' person ' in that section. Section 2(9) of the 1922 Act denned a ' person ' as ' including a Hindu undivided family and a local authority ', The Income-tax Act, 1961, defined ' person ' as also including a 'firm'. The Income-tax Officer assessed the firm for the assessment years 1958-59 and 1960-61 to 1962-63, on the assumption that the firm was a person within the meaning of Section 17(1) of the Indian Income-tax Act, 1922. The Income-tax Officer issued a notice in February, 1965, intimating that in its assessment for the abovt-said assessment years there were mistakes apparent from the record inasmuch as the firm had not been charged at the maximum rates of income-tax under Section 17(1) of the 1922 Act. This was on the basis that the firm was not a person within the meaning of that section. The Supreme Court observed :
'It is a matter for consideration whether the definition contained in Section 2(31) of the Income-tax Act, 1961, is an amendment of the law or is merely declaratory of the law that was enforced earlier. To pronounce upon this question, it may be necessary to examine various provisions in the Act as we)l as its scheme.
Section 113 of the Income-tax Act, 1961, corresponded to Section 17(1) of the Indian Income-tax Act, 1922 but that section has new been omitted with effect from April 1, 1969, as a result of the Finance Act, 1965.
From what has been said above, it is clear that the question whether Section 17(1) of the Indian Income--tax Act, 1922, was applicable to the case of the 1st respondent is not free from doubt. Therefore, the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Income-tax Act, 1961. A mistake apparent on the record must be aa obvious and present mistake and out something which can be established by a long drawn process of resigning on points on which there may conceivably be two opinions.'
11. It was therefore held that the Income-tax Officer was wrong in holding that there was a mistake apparent frontthe record.
12. A number of cases were cited at the Bar on the question as to the exact content of the words ' mistake ' and ' mistake apparent from the record'. In Master Constitution Co. (P.) Ltd. v. State of Orissa, : 3SCR99 the Supreme Court observed that an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. But it is open to the Income-tax Officer (under Section 35 of the Indian Income-tax Act, 1922) to examine the record including the evidence and if he discovers any mistake he is entitled to rectify the error : vide Maharana Mills (Private) Ltd. v. Income-tax Officer, : 36ITR350(SC) . Having laid down these tests, the Supreme Court also struck a note of warning in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale, : 1SCR890 . This is what they observed in that case:
' The learned judge (Das Gupta J.)...Iays down the complex nature ofthe arguments as a test of an apparent error of law. The test also maybreak, for what is complex to case judicial mind may be clear and obviousto another; it depends upon the equipment of a particular judge. In theultimate analysis the said concept is compromised of many imponderables : itis not capable of precise definition, as no objective criterion can be laiddown, the apparent nature of the error, to a large extent, being dependentupon the subjective element. So too, in some cases, the boundary betweenerror of law and error of fact is rather thin .... The question whether thesaid errors are errors of law or fact cannot be posited on a priori reasoning,but falls to be decided in each case. We do not, therefore, propose to define with any precision the concept of ' error of law apparent on the face of the record ; but it should be left, as it has always been done, to be decided in each case,'
13. On a consideration of the relevant cases, this is what this court held in T.S. Rajam v. Controller of Estate Duty, : 69ITR342(Mad) :
'' Mistake ' is an ordinary word, but in taxation law, it has a special signification. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. It is difficult to axiomatise and lay down dictas for the discovery of a mistake from official records. The word ' mistake ' is inherently indefinite in scope, as what may be a mistake to one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. Indeed, it is imponderable due to its inherent indefiniteness. It is something which a duly and judiciously instructed mind can find out from the record. . It may be that sometimes an argument, though not a complex study, may be required to find it out. But that by itself is not the test to discountenance it as being not a mistake apparent from record. In the ultimate analysis, the conclusion a well equipped and trained judicial mind will reach after scrutinising the record will govern and his finding whether it is a mistake or not has to be accepted .....
On a fair conspectus of the ratio of the various decisions of this court and the Supreme Court, it is now clear that for a rectification of an error which is said to be apparent from the face of the record, the mere complexity of the problem or that genuine argument is necessary to discover the same may not by themselves be sufficient to oust the jurisdiction of a tribunal to rectify such a mistake. If however it could be discerned with some precision after a fair probe into the assessment records and a reasonable and probable conclusion can be arrived at, that the court's conscience has been shaken, in that there appears an error on record which has to be certainly corrected, then it would appear that the jurisdiction of the Tribunal vesting with power to rectify such mistake arises. As had been repeatedly pointed out, it is very difficult to state where the jurisdiction begins and where it ends. One thing, however, emerges from the discussion above. The essence of rectification is to bring the order which was expressed and intended to be in pursuance of the existing law, into harmony with such law. It presupposes a particular state of affairs and it requires proof that by such a mistake the final order fails to give proper effect of the law and its functions. Once the Tribunal or authority is able to predicate with certainty as to in what manner and how the order suffers by a mistake apparent on its record supported by irrefragable evidence,then it would indeed enable them to bring the order complained agaimt or impugned against in conformity with law and the facts in the record.'
14. Bearing these principles in mind, let us consider the case on hand. The Estate Duty Officer was concerned with the ascertainment of the principal value of the estate which passed on the death of Namasivayam Chettiar. In determining the value of the estate on the date of death court in deductions had to be made. It is not in dispute in this case that one such allowable deduction was the income-tax and excess profits tax liability of the deceased. It, therefore, became necessary for the Assistant Controller of Estate Duty to find out the correct amount of the tax liability of the deceased as on the date of death. At the time of original assessment the Assistant Controller thought that the actual amount payable was Rs. 1,46,506. But it was later on found by him that it was only Rs. 30,000. Under the settlement of agreement or compounding, whichever term may be employed in this connection, the Government accepted Rs. 30,000 as the amount that was payable by the deceased. This settlement was with reference to the dues from the deceased and, therefore, could relate to only the amount payable as on the date of death. It is not a benefit or a reduction given to the accountable person. It may be that in one sense the accountable person also gets the benefit. But what was settled by the department was the amount payable by the deceased and that could relate to the liability of the deceased as on the date of death. If that is so, there could be no doubt that only that sum of Rs. 30,000 should have been deducted in ascertaining the value of the estate of the deceased. But in fact, the Assistant Controller of Estate Duty has deducted a sum of Rs. 1,46,506 in the original order of assessment. Therefore, there had been a mistake in the assessment which the Assistant Controller was entitled to rectify under Section 61 of the Act.
15. On the question whether the petitioner as accountable person has been given a reasonable opportunity of being heard in the matter as required by the proviso to Section 61, the learned counsel advanced twofold arguments. The first was that his client did not receive any notice in person and the chartered accountants on whom the notice was served had no authority to represent the petitioner in the rectification proceedings. Secondly, even on the assumption that notice was properly served on the chartered accountants of the petitioner, there was no reasonable opportunity given to them for filing the objections. On the first part of the contention, it was submitted by the learned counsel that the authorisation given by the petitioner to the chartered accountants expired and exhausted immediately the original assessment order was made on January 30, 1971, and thereafter they had no authority to represent the petitioner. It is true that normally the authorisation given is only for the purpose of conducting that particular proceeding. But it all depends en the wording of the particular authorisation given and will have to be decided as a question of fact in each case. In this case we find that the chartered accountants represented the petitioner in the previous two rectification proceedings, and each ended in the revised order, dated April 14, 1961, and October 13, 1974. It is true that these two revisions were favourable to the petitioner. But that fact would not make any difference as to the authority of the chartered accountants to represent the petitioner. In fact, thy notice was received by the chartered accountants and they requested time for submitting the: reply. Normally, therefore, we can presume that the chaitered accountants had the authority, because we consider that they would have told the Assistant Controller of Estate Duty if they had no authority and would not have asked for time for furnishing their reply. The Appellate Controller of Estate Duty and the Tribunal had seen the actual authority given to the chartered accountants which gave power to them to represent the petitioner ' in connection with all proceedings under the Estate Duty Act, 1953'. It is also seen from the order of the Tribunal in Miscellaneous Petition No. 1973/68-69 dated April 29, 1969, that the learned counsel who represented the petitioner was shown the authority given by the petitioner to the chattered accountants and he was satisfied about the authority. It is also specifically stated therein that the departmental representative produced and showed the power-of-attorney to the Tribunal and the advocate for the petitioner and after satisfying himself the advocate for the petitioner expressly and categorically stated that he did not wish to press the point contained in the grounds of appeal in regard to the service of notice under Section 61 and it is in view of this the Tribunal made a specific reference in its order that no other points were pressed before it. The Tribunal also gave an opportunity to the petitioner to file an affidavit from the counsel who argued the case before the Tribunal if he wanted to contend that the counsel argued the point about the propriety of service of notice on the chartered accountants or that he argued that point. Though the petitioner took time he did not file any such affidavit. The department unfortunately has misplaced the file and the petitioner wants to take advantage of that and reagitate the same question.
16. It is also to be remembered that the entire proceedings including the rectification proceedings were before the same authority and not an appellate or different authority and when an authorisation was given in as wide a term as noted by the Appellate Controller it could be easily presumed that the chartered accountants were given authority to represent the petitioner in the rectification proceedings also. This is especially so because the petitioner is a citizen of Ceylon and is a resident of that country. Having regard to these facts we are satisfied that the chartered accountants had the necessary authority to receive the notice and represent the petitioner in the rectification proceedings. The plea of lack of reasonable opportunity also, in our opinion, in the circumstances of the case, could not be accepted. The petitioner knew fully well about the settlement of the amount due from the deceased at Rs. 30,000, The notice actually was served on the chartered accountants on January 19, 1966. The rectification would have to be made before January 30, 1966, as Section 61 has prescribed a period of 5 years from the date of the original order as the limitation for rectification. It is in those circumstances that the Assistant Controller fixed the date for hearing as January 25, 1966, but the chartered accountants requested for time till February 15, 1966, which certainly could not have been complied with. Having regard to the time available, the subject-matter of the rectification and the circumstance that the rectification itself is the result of the settlement made in pursuance of the request of the petitioner, we are satisfied that the petitioner had a reasonable opportunity. Since the petitioner knew of the settlement, the only question before the Assistant Controller was whether that could be given effect to in the estate duty assessment order. Even today the petitioner is not able to satisfy us that there was any mistake apparent from the record which could be rectified. We have, therefore, to reject this contention of the petitioner.
17. The result is that the writ petition is liable to be dismissed and it is accordingly dismissed. In the tax reference case, though it was at the instance of the petitioner the question was referred, probably being satisfied with the correctness of the order of the Tribunal, the learned counsel did not advance any arguments. We, therefore, refrain from answering that question and return the reference to the Tribunal. The respondent is entitled to his costs in T.C. No. 59/71. Counsel's fee Rs. 250. There will be no order as to costs in the writ petition.