KALYANI SUNDARAM versus ASSISTANT CONTROLLER OF ESTATE DUTY MADRAS & ANOTHER

Citation: [1989] 3 S.C.R. 233 · Decided: 12-05-1989 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Dismissed

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Judgment (excerpt)

KALYANI SUNDARAM 
v. 
ASSISTANT CONTROLLER OF ESTATE 
DUTY MADRAS & ANOTHER 
MAY 12, 1989 
' 
[R.S. PATIIAK, CJ. AND B.C. RAY, J.] 
Estate Duty Act/Estate Duty Rules, 1958-Sections 17, 19(1), 
JO( l)(e), J6, J7 & 61/Rule 15-Assessment of Accountable persons-
Made-Entire estate dilty paid up-Whether rectification of assessment 
permissible. 
· 
Shri Anantharamakrishnan, a reputed industrialist died in 
Madras on April 18, 1964 intestate leaving behind his widow, Valli, two 
sons, Sivasailam and Krishnamoorthy and two daughters, Kalyani and 
Seethe. Some time thereafter, his son Sivasailam, being an accountable 
A 
B 
c 
person rendered the Estate Duty account. All other heirs i.e. his 
D 
mother, brother and sisters, who were also accountable persons, being 
the heirs of the deceased wrote to the Assistant Controller of Estate 
Duty that as accountable persons they agreed to abide by the accounts 
rendered by Sivasailam and whatever explanation is furnished by him 
would be binding on them. 
M/s. Amalgamations Private Ltd. is a company which held shares 
in most of the companies including Simpson and Company Ltd. in 
which company the deceased Anantharamakrishnan too held shares. By 
E 
~ 
a letter of April 27, 1965, Amalgamations informed the assessing au-
thority that the deceased had transferred property to it in the form of 
. shares and that at the time of his death, ·he had controlling interest in the 
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Company. On September 13, 1965, the Assessing Authority wrote to 
Amalgamations that the deceased having transferred 80,377 shares of 
Simpson, as such Amalgamations was a controlled company within the 
meaning of s. 17 of the Estate Duty Act and thus the said company l!!td 
to be regarded as one of the accountable persons in respect of the estate 
of the deceased. Amalgamations was therefore required to submit an 
G 
account of the estate. Accordingly Amalgamations Oled a return and no 
*" objection thereto was taken by any of the heirs. 
Treating Amalgamations as a controlled company and in view of the 
fact that the deceased had control over its affairs, the assessing authority 
valued the shares as per_ the provisions of Rule 15 of the Rule framed l>Y 
233 
H 
234 
SUPREME COURT REPORTS 
[1989] 3 S.C.R. 
the Board under Section 30(1)(e) of the Act. The principal value of the 
A shares was determined ofRs.2,12,29,998 and the duty was computed at 
Rs.1,67,74,697.58, out of which provisional duty in the sum of 
Rs.65,50,542. 73 had been paid. The assessment order was addressed 
both to Amalgamations as also to Shri Sivasailam as accountable 
persons. No appeal was preferred against the said assessment by the 
B 
accountable persons. 
c 
D 
E 
F 
G 
K. S. Sundaram husband of the appellant as her agent and 
constituted power of attorney, on June 11; 1974 wrote to' the Assistant 
Controller seeking certain clarifications. The Assistant Controller 
referring to the agreement between the heirs of .the deceased Anan· 
tharamakrishnan that they were hound by the accounts rendered or 
explanation given by Sivasailam, replied that, since all subsequent pro· 
ceedings had been completed aOer discussion with Sivasailam and 
Amalgamations, the assessment had become final and that it was not 
possible to enter into any further discussion. 
On 2nd January, 1975, appellant's husband as agent filed an 
application under Sec. 61 of the Estate Duty Act, and it was contended 
by him that the assessment order was vitiated by several errors in· 
asmuch as Rule 15 only prescribed the method of valuation of shares 
and debentures of the controlled company and the rule was appendage 
to Sections 36 & 37 of the Act. It was urged that the assessment order 
did not show any details and therefore a rectification order should be 
made indicating the exact amount included under Section 17(1) of the 
Act as the property passing on the death of the deceased. He stated that 
he required this information to know the precise amount which his 
principal had to pay to Amalgamations, as the assessment order did 
not, in terms, indicate apportionment of the duty, for which reason 
rectification was required. 
On January 25, 1975, the Assistant Controller declared by an 
order that he was unable to find any mistake in the assessment order 
which called for any rectification and therefore he declined to act under 
Sec. 61 of the Act. 
Order passed by the Assistant Controller was challenged in the 
High Court by means of Writ Petitions. The High Court

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