SETHURAMAN J. - Under section 64(1) of the Estate Duty Act, 1953, at the instance of the Controller of Estate Duty, the Appellate Tribunal has referred the following question :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the appeal filed by the accountable persons on July 17, 1969, before the Appellate Controller against the levy of penalty was competent in view of the proviso to section 62(1) of the Estate Duty Act and in restoring the appeals back to the Appellate Controller for disposal according to law ?' (T.C. Nos. 209 and 210 of 1972).
At the instance of the Controller of Estate Duty another question was referred in the same case as directed by this court and that question runs as follows :
'Whether the Tribunal was also right in giving a finding on merits of the levy of penalty while deciding the competency of the appeal filed before the Appellate Controller ?' (T.C. Nos. 100 and 101 of 1977).
The questions referred to in T.C. Nos. 210 of 1972 and 101 of 1977 relate to the same estate, while in T.C. Nos. 209 of 1972 and 100 of 1977 relate to another estate. The question referred to in T.C. Nos. 210 of 1972 and 101 of 1977 are identical with the questions referred to in T. C. Nos. 209 of 1972 and 100 of 1977. As the facts are identical, it is enough if we mention the facts in one of the two groups of cases. The estate duty account was filed by the accountable persons on July 17, 1968, admitting a principal value of Rs. 2,22,557. The provisional assessment was made on July 22, 1968, determining the tax payable at Rs. 13,383.65. This amount was payable on or before August 25, 1968. A sum of Rs. 1,363.11 was paid leaving a balance of Rs. 12,000.44. A show-cause notice was issued on September 5, 1968. Since the amount was not paid, a penalty of Rs. 1,200 was levied under section 46(1) of the Indian Income-tax Act, 1922, as applied to section 73(5) of the Estate Duty Act. The accountable person appealed against this levy of penalty before the Appellate Controller. The Appellate Controller dismissed the appeals as incompetent on the ground that the duty due was not paid at the time of filing the appeal and that there was non-compliance of the proviso to section 62(1) of the Estate Duty Act. Against this order the Appellate Controller, there was an appeal to the Tribunal. The Tribunal allowed the appeal and sent the matter back to the file of Appellate Controller for consideration on the merits of the case and disposal of the same according to law. The Tribunal allowed the appeal and restored the matter for the consideration of the Appellate Controller in the following circumstances : The accountable persons filed the appeal before the Appellate Controller on July 17, 1969. They had applied to the Assistant Controller of Estate Duty for stay of collection of tax and the Assistant Controller granted time till December 31, 1969. The appeal came to be disposed of the August 30, 1969, and time had been granted by the Assistant Controlelr on August 16, 1969, itself. Therefore, at the time when the appeal came to be heard by the Appellate Controller there was time for payment of tax till December 31, 1969. It is in these circumstances that the Tribunal allowed the appeal and restored the matter the Appellate Controller for consideration on the merits of the case. We had occasion to consider an identical question in Controller of Estate Duty v. Estate of Late M. Kuppuswami Naicker : 110ITR127(Mad) . It was pointed out in that case :
'Therefore, even though on the date when the accountable person preferred the first appeal on November 29, 1968, what was in force was the original order demanding duty at Rs. 68,833.29, by the time the appeal came to be disposed of, that demand itself had been modified by the Assistant Controller himself. Having regard to the fact that under section 62(2) of the Act, the Appellate Controller had the power to excuse the delay in the filing of an appeal, if on March 31, 1969, the Appellate Controller had entertained the appeal after excusing the delay, certainly he would not have dismissed the appeal on the ground that the proviso to section 62(1) of the Act had not been satisfied, because the demand for the payment of the duty had itself been modified.'
For the reasons mentioned in the said judgment we consider that in the present case also on the date when the appeal came to be disposed of, it was open to the Appellate Controller to have condoned the delay and entertained the appeal on August 16, 1969, when time for payment up to December 31, 1969, was granted. Therefore, it would follow that the Tribunal acted rightly in directing the Appellate Controller to restore the appeal and dispose of the same according to law. In the reference there is a challenge with reference to some of the observations of the Tribunal as regards the liability to pay the penalty itself. These observations are connected with the questions regarding the maintainability of the appeal itself. In the circumstances no exception could be taken to the observations made by the Tribunal, because they were necessary for the disposal of the appeal before it. The Tribunal could not be found fault with if it restored the appeal to the Appellate Controller for disposal according to law. The question in T.C. No. 209 of 1972 is, therefore, answered in the affirmative and against the revenue. We answer the separate question in T.C. No. 100 of 1977 in the affirmative and against the revenue. We similarly answer the questions covered by T.C. Nos. 210 of 1972 and 101 of 1977. The respondents in these two sets of references will be entitled to theior costs. Counsel's fee Rs. 500 one set in T.C. Nos. 209 of 1972 and 100 of 1977 and one set in T.C. Nos. 210 of 1972 and 101 of 1977.