Income Tax Appellate Tribunal - Madras
Dr. Rajah Sir M.A. Muthiah Chettiar Of ... vs Wealth-Tax Officer on 22 May, 1987
Equivalent citations: [1987]22ITD62(MAD)
ORDER
T.V.K. Natarajachandran, Accountant Member
1. These two sets of appeals pertaining to the same assessee are consolidated and disposed of by this common order as they involve common issue and arise out of the two sets of orders of the Commissioner (Appeals) dated 11-6-1984 and the Appellate Assistant Commissioner dated 10-1-1985. The common issue is whether the rectificatory orders passed by the Wealth-tax Officer under Section 35 of the Wealth-tax Act, 1957 for the assessment years 1970-71 to 1978-79 excluding1 the estate duty liability completely from the net wealth already computed are justified in law or not.
2. The facts of the case are clearly stated in the orders passed by the Commissioner (Appeals). However, they are briefly referred to in order to appreciate the background. Late Kumara Raja M.A.M. Muthiah Chettiar was one of the coparceners of the Hindu undivided family of Dr. Raja Sir M.A. Muthiah Chettiar of Chettinad, Chettinad House, Raja Annamalaipuram, Madras. He died on 24-1-1970 leaving behind his wife Kumara Rani Smt. Meenakshi Achi, mother Rani Meyyammai Achi, besides father Dr. Raja Sri M.A. Muthiah Chettiar and brother Dr. M.A.M. Ramaswamy. On his death 1/3rd share in the property of the Hindu undivided family devolved on his legal heirs in terms of proviso to Section 6 of the Hindu Succession Act, 1956 and this has been duly accounted for by the accountable person in accordance with Section 7(1) of the Estate Duty Act, 1953. The estate duty attributable to the estate passing on death was Rs. 8,57,050. The properties of the Hindu undivided family were not physically divided. In the original assessments made it would appear that just as 1/3rd of the property of the Hindu undivided family falling to the share of the deceased was excluded from the net wealth of the Hindu undivided family for these years so also 1/3rd of the estate duty liability was excluded by the Wealth-tax Officer. Subsequently by rectificatory orders the Wealth-tax Officer excluded totally the estate duty liability from the net wealth of the Hindu undivided family for these years under consideration on the ground that the estate duty liability pertained to the share of the Hindu undivided family property of the deceased and therefore it pertained to that share which passed on his death.
3. On appeal the Commissioner (Appeals) held firstly that the issue was not debatable as the provisions of the Estate Duty Act were quite straightforward. Secondly he held that under Section 74 of the Estate Duty Act the estate duty liability is a first charge on the 1/3rd of the share of the Hindu undivided family passing on death and therefore the other coparceners were not liable to pay out of the estate which did not pass on the death of the deceased. Alternatively he held that even though there was no physical partition of the property of the Hindu undivided family but there was only notional partition, if the Hindu undivided family paid the estate duty liability it was entitled to recover the same from the legal heirs of the deceased. Further even if the estate duty liability is treated as a liability it is not admissible in terms of Section 2(m) as the debts are secured on property in respect of which wealth-tax was not chargeable and therefore such debts should not be deducted from the net wealth of the Hindu undivided family. Thus he upheld the rectificatory orders passed by the Wealth-tax Officer for the assessment years 1970-71 to 1974- 75.
4. In respect of another set of appeals the Appellate Assistant Commissioner following the orders passed by the Commissioner (Appeals) dated 11-6-1984 upheld the rectificatory orders passed by the Wealth-tax Officer for the assessment years 1970-71 to 1974-75.
5. At the time of hearing the learned representative of the assessee stated the facts of the case and submitted that originally 2/3rd of the assets and debts were considered in the hands of the assessee Hindu undivided family while 1/3rd thereof was assessed in the hands of the legal heir. In particular he pointed out that the Wealth-tax Officer allowed 2/3rd of the liability to estate duty in the hands of the Hindu undivided family and 1/3rd in the hands of the legal heir. He further submitted that there was no partition in the Hindu undivided family consequent on death and therefore the estate duty liability is a charge on all the properties of the Hindu undivided family including the share of the deceased which notionally passed on Ms death in terms of proviso to Section 6 of the Hindu Succession Act. Further he contended that Section 2(m) does not mention estate duty payable as it is concerned with tax, penalty and interest and Rule 35A of the Tribunal Rules specifically provides for filing of separate stay petition regarding recovery of estate duty in contradistinction with income-tax, interest and penalty. Referring to the decision of the Allahahad High Court in the case of Maharani Raj Laxmi Kumari Devi v. CED [1980] 121 ITR 1002, he submitted that the function of proviso to Section 6 of the Hindu Succession Act was not to effect a disruption in a coparcenary family but it creates a fiction only for the purpose of fixing the persons who are entitled to succeed to the property of the deceased coparcener. Therefore proviso to Section 6 of the Hindu Succession Act does not effect a partition by operation of law. He then referred to the decision of the Gujarat High Court in the case of CWT v. Kantilal Manilal [1973] 90 ITR 289, for the proposition that the property that devolved on the legal heirs was a specific share in definite ascertained properties subject of course to payment of proportionate share of debts and liabilities. He added that for this reason the Wealth-tax Officer made the original assessments allowing proportionate liability for estate duty as a deduction and therefore they were correct and need not require any rectification.
6. Alternatively it was submitted that the original assessment orders passed by the Wealth-tax Officer also could not be rectified under Section 35 since the issue was debatable. Reliance was placed on the decision of the Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 and the Delhi High Court in the case of CIT v. Delhi Cement Stockists [1971] 81 ITR 515. Further reliance was placed on the decision of the Supreme Court in the case of State of Maharashtra v. Narayanrao Shamrao Deshmukh [1985] 22 Taxman 38 for the proposition that even after devolution of the property the legal heirs continued to remain members of the Hindu undivided family governed by Mitakshara law. In the facts and circumstances of the case therefore it was submitted that there was no mistake apparent from the record which called for rectification and as the issue is debatable rectification of orders was not warranted.
7. The learned departmental representative on the other hand submitted that the estate duty liability is the liability of the legal heirs and not of Hindu undivided family. Under Section 74(1) of the Estate Duty Act the estate duty liability shall be a first charge on the immovable property that passed on death and even if the liability has been met by the Hindu undivided family it was entitled to reimbursement. Further the estate duty is payable by the accountable persons and they can claim such liability. Consequently he supported the orders passed by the authorities.
8. The learned representative of the assessee submitted that the karta of the Hindu undivided family was both legal heir and also accountable person and therefore the estate duty payable was a liability in terms of Chapter VI of the Estate Duty Act.
9. We have duly considered the rival contentions. There is no dispute on any hand regarding the fact that on the death of the deceased 1/3rd share of the Hindu undivided family property devolved on the legal heirs by virtue of proviso to Section 6 of the Hindu Succession Act. The share that devolved is only notional and not actual by means of metes and bounds. Thus the proviso to Section 6 of the Hindu Succession Act does not effect a disruption in a coparcenary family and only creates a fiction for limited purpose. The fiction is created for the purpose of fixing the persons who are entitled to succeed to the property of the deceased coparcener that is for the purpose of laying down the succession. The fiction is limited in scope and does not effect: a partition by operation of law. This is what has been observed by their Lordships of the Allahabad High Court in the case of Maharani Raj Laxmi Kumari Devi (supra). Since there is no physical partition but the quantum of share being fixed or the proportion is crystallised it is nonetheless subject to payment of proportionate share of the debts and liabilities. The property that belongs to the Hindu undivided family and the share that devolved on the legal heirs in the absence of physical partition by metes and bounds continued to be enjoyed as tenants in common and the legal heirs on whom the share devolved by intestate succession also continued to be members of the family vide the observation of the Gujarat High Court in the case of Kantilal Manilal (supra) at page 295 and the decision of the Supreme Court in the case of Narayanrao Shamrao Deshmukh (supra). Further the property that devolved or interest in the property thereof was under the management of the karta of the family who happened to be the accountable person also in this case and he has rendered the account of the deceased. As per Section 53 which deals with the accountable persons, their duties and liabilities, it is provided that they shall be accountable for whole of estate duty limited to the extent of assets actually received and in case there are two or more accountable persons they shall be jointly and severally liable for whole of the estate duty. Further the valuation of interest in coparcenary property ceasing on death is governed by provisions of Section 39 and Sub-section (3) thereof. The total value of all the properties must first be determined as if they belonged to the deceased and after allowing the exemption under Section 33(1) the remaining must be divided as if there was partition at the time of death in order to determine the share due to the deceased. Thus the valuation of the entire property of the Hindu undivided family is the first step in the direction of ascertaining the share of the deceased and also for the purpose of allowing proportionate debts and liabilities thereof. In the circumstances, therefore, the original assessments were completed allowing 2/3rd of the estate duty payable in the hands of the Hindu undivided family while 1/3rd of the estate duty payable was allowed in the hands of the legal heirs. No doubt the estate duty payable on the property passing on the death of the deceased was thus bifurcated between the Hindu undivided family and the legal heirs of the deceased in the ratio of 2/3rd and 1/3rd as per the original assessments although the estate duty payable is attributable to the share of the deceased that passed on his death. Section 74 creates first charge on immovable property passing on the death of the deceased after the debts and encumbrances allowable under Part VI of the Estate Duty Act, 1953. It is in these circumstances that the assessee chose to claim the entire liability to estate duty but the Wealth-tax Officer bifurcated the liability in the ratio of 2/3rd in the assessment of the Hindu undivided family and 1/3rd in the assessment of legal heirs. If the assessee were to discharge the estate duty liability it can be only out of sale of the property of the Hindu undivided family or that passed on the death of the deceased and in the absence of any physical partition and allotment of any specific property it was not possible for the legal heirs to do so. In case the Hindu undivided family discharges the liability from out of its property it is entitled to recover the same from the legal heirs out of the share of the property that passed on death of the deceased. Thus as a matter of fact the joint and several liability imposed under Section 53(5) would come into operation so far as the payment of estate duty liability is concerned. It is only a matter of fineness of law that the liability should be appropriated to the share of the Hindu undivided family property that devolved on the legal heirs in terms of proviso to Section 6 of the Hindu Succession Act. It is for this reason that we are of the opinion that the liability to estate duty is attributable only to the share of the Hindu undivided family property that is deemed to pass on the death of the deceased in terms of Section 7(1) of the Estate Duty Act, the principal value of which is to be computed in terms of Section 39(1) and (3) of the Estate Duty Act. In this view of the matter there is no quarrel over the question that the estate duty liability is attributable to the share of the deceased that devolved on the legal heirs.
10. However we are unable to accept the view of the authorities that the allowance of 2/3rd liability to estate duty in the hands of the Hindu undivided family was a mistake apparent from the record which could be rectified under Section 35 of the Wealth-tax Act, 19.57. According to the Wealth-tax Officer, as seen from the rectificatory orders it is as simple as excluding the estate duty liability in the same manner as 1/3rd of the property that was excluded from the Hindu undivided family on account of property devolving on the legal heirs on the death of the deceased in terms of proviso to Section 6 of the Hindu Succession Act. According to the Commissioner (Appeals) the entire estate duty liability is to be allowed in the hands of the legal heirs out of 1/3rd share of the estate passing on the death of the deceased. In other words the authorities viewed that the estate duty liability is to be allowed out of the estate that passed on death of the deceased as it is the first charge on the immovable properties so passed. The Andhra Pradesh High Court in the case of Barkat Alikhan v. CED held that in determining the principal value of the estate of the deceased under Section 36 of the Estate Duty Act the amount of estate duty payable cannot be taken into account and the principal value of the estate should not be reduced accordingly. This decision was rendered following an earlier decision of the same Court in the case of CED v. Estate of Late Omprakash Bajaj [1977] 110 ITR 263, wherein, after consideration of various provisions the High Court held that the estate duty is neither a debt nor an encumbrance and is not encumbrance either within the meaning of Section 74(1) of the Estate Duty Act or within the broader meaning of the word 'encumbrance'. In this connection the Andhra Pradesh High Court has relied on the ratio of the Gujarat High Court decision in the case of CIT v. Mrs. Indumati Ratanlal [1968] 70 ITR 353, wherein it has been held that the liability of every accountable person is a personal liability limited to the extent of the assets actually or constructively received by him. It has been further observed that qualitatively it is personal liability and not a liability payable only out of the assets of the deceased, but the assets of the deceased actually or constructively received merely constituted the limit of the liability. Further, as pointed out by the Gujarat High Court in the case of Kantilal Manilal (supra) at page 294, the quantum of share of the deceased though fixed and the proportion in which the share is to be counted is also crystallised themselves subject to of course payment of proportionate share of the debts and liabilities and such proportionate share of debts and liabilities would include the liability to estate duty also. This is how the assessee has understood the case and the learned counsel for the assessee also relied on this decision in support of his case. The question whether the debts and liabilities in terms of Section 44 of the Estate Duty Act would include the estate duty payable on the property deemed to pass is a debatable point and there could be possibly two opinions and in any case it is not a mistake apparent on the record. The Commissioner (Appeals) held that the liability is attributable to the share of the property that passed on death of the deceased and therefore deductible therefrom. This is another view which is possible. The Delhi High Court in the case of Delhi Cement Stockists (supra) observed that for a mistake to be apparent on the face of the record, the mistake must be obvious and patent and it should not be necessary to hold investigation or to go into lengthy and complicated arguments to find out the mistake. Any mistake which can only be found out by arguments and is not otherwise obvious from the record cannot be an error or a mistake apparent from the record. In this case there was only a change of opinion on the part of the Wealth-tax Officer. The Supreme Court in the case of Volkart Bros. (supra) observed that a mistake apparent on the record must be an obvious and patent mistake and not something which could be established by a long-drawn process of reasoning on points on which there may be conceivably two opinions. It also observed that a decision on a debatable point of law is not a mistake apparent from the record. In view of the legal principles stated above and multiplicity of views expressed on the same issue, we are of the opinion that there is no mistake apparent from the record and there was only change of opinion and in any case the issue is highly debatable. Therefore the Wealth-tax Officer was not justified in passing the rectificatory orders for these years and the Commissioner (Appeals) was not justified in sustaining the same on the ground that there was mistake apparent from the record. Consequently we set aside and annul the orders passed by the authorities for these years.
11. In the result the appeals are allowed.
K.A. Thanikkachalam, Judicial Member
1. These appeals filed by the assessee relate to the assessment years 1970-71 to 1978-79. Since the questions involved in all these appeals are common, they are taken up together and disposed of by this common order for the sake of convenience.
2. The assessee is a Hindu undivided family consisting of the following coparceners:--
(1) Dr. Raja Sir M.A. Muthiah Chettiar -- Father
(2) Kumararajah M.A.M. Muthiah Chettiar
(died on 24-1-1970) -- Son
(3) Dr. M.A.M. Ramaswamy -- Son
On the death of one of the coparceners, namely Kumararajah M.A.M. Muthiah Chettiar on 24-1-1970 by virtue of proviso to Section 6 of the Hindu Succession Act, 1956 his undivided 1/3rd share in the HUF properties devolved on his wife Kumararani Srat. Meenakshi Achi and mother Rani Meyyammai Achi. In computing the net wealth of the HUF by virtue of this legal position, only 2/3rd of the assets and debts of the HUF is being assessed in the hands of the assessee. The balance of 1/3rd is being assessed in the following manner :--
Kumararani Smt. Meenakshi Achi (wife of 2) 1/6 On the death of mother Smt. Meyyammai Achi on 1-3-1970 her legal heirs viz. Dr. Rajah Sir M.A. Muthiah Chettiar 1/12 Dr. M.A.M. Ramaswamy 1/12 Total 1/3
3. The accountable persons of the late Kumararajah included his 1/3rd undivided share in the HUF property while submitting the estate duty return in accordance with Section 7(1) of the Estate Duty Act. The present HUF-assessee herein, submitted its wealth-tax returns for the assessment years under consideration as on the relevant valuation dates and in these returns it excluded the value of the 1/3rd share going to the legal heirs of the late Kumararajah in accordance with Section 6 (proviso) of the Hindu Succession Act. This position was accepted by the WTO. The assessee claimed that the entire estate duty attributable to the undivided share of the late Kumararajah viz. Rs. 8,57,050, should be deducted as a liability from the gross wealth returned by the HUF. Before the WTO the assessee submitted that the entire estate duty could be recovered from the property remaining with the HUF as on 31-3-1970 under the provisions of Section 74 of the Estate Duty Act.
4. The WTO did not deduct the entire estate duty liability of Rs. 8,57,050. Since he deducted 1/3rd of the value of the assets possessed by the HUF before the death of Kumararajah, he similarly excluded 1/3rd of the estate duty of Rs. 8,57,050. He thus allowed 2/3rd of Rs. 8,57,050 viz. Rs. 5,71,366 as a liability deductible from the assets of the HUF as on 31-3-1970.
5. The WTO thereafter rectified the wealth-tax assessments under Section 35 of the Wealth-tax Act after giving show cause notice to the assessee. In this rectification order he refused to deduct any portion of the estate duty liability of Rs. 8,57,050 from the wealth of the HUF. The WTO stated that since he excluded the 1/3rd share of the late Kumararajah from the assets of the HUF, he should ignore the corresponding estate duty liability relating to that 1/3rd share. Whereas in the original assessment order he allowed a deduction of 2/3rd of Rs. 8,57,050, i.e. Rs. 5,71,366, in the present rectification order dated 21-2-1983, he did not allow anything as a deduction by way of estate duty liability. As against these orders the assessee went in appeal before the CIT (A).
6. Before the CIT (A) the assessee took a preliminary legal ground that the WTO had no jurisdiction to invoke the provisions of Section 35 since a debatable point was at issue. The CIT (A) was of the view that there is no debatable point at issue as the provisions are quite straightforward and, therefore, he held that the WTO rightly invoked the provisions of Section 35.
7. On merits the assessee argued that under Section 74 of the Estate Duty Act every piece of property, whether movable or immovable, owned by the HUP is saddled with the estate duty liability attributable to the 1/3rd share of Kumararajah. It was further submitted that there was no actual partition on the date of death i.e. on 24-1-1970. The immovable properties of the HUF were not partitioned by metes and bounds. Therefore, according to the assessee either the entire estate duty liability of Rs. 8,57,050 or at least 2/3rd thereof should be allowed as a deduction in the wealth-tax assessment of the HUF.
8. The CIT (A) has pointed out that the provisions of the Estate Duty Act are clear. Under Section 74 the estate duty payable in respect of property passing on the death of a person, shall be a first charge on the "property so passing" on the death of Kumararajah. He further pointed out that the coparceners other than the late Kumararajah are not liable to pay out of the estate not passing on the death of Kumararajah. The CIT (A) further pointed out that it is also quite possible that the Assistant Controller might be in a position to recover either the entire estate duty of Rs. 8,57,050 or 2/3rd thereof from the assets of the HUF even after the death of Kumararajah. But in such an event, the HUF would be entitled to recover the estate duty so paid from the legal heirs of the late Kumararajah. Under these circumstances, the CIT (A) was of the view that the WTO was justified in ignoring the estate duty liability altogether while computing the net wealth of the HUF. He pointed out that the WTO's action is also further justified by the provisions of Section 2(m) of the WT Act, 1957. According to this section where any debts are secured on any property in respect of which wealth-tax is not chargeable, such debts should not be deducted from the gross wealth of the assessee. In the present case, no wealth-tax is chargeable on the 1/3rd share of the late Kumararajah.' Therefore, the entire estate duty liability which is a charge on such 1/3rd share should be ignored according to the CIT (A). Accordingly, the CIT (A) confirmed the rectification order made by the WTO.
9. The substance of the order of the CIT (A) is that the entire estate duty liability attributable to the undivided share of late Kumararajah must be allowed as a deduction in the wealth-tax assessments to be made on the legal heirs of late Kumararajah subject to the provisions of Section 2(m)(iii) of the WT Act. Subject to this remark, the rectification orders were confirmed by the CIT (A) for all the assessment years under consideration. Aggrieved, the assessee filed these appeals before the Tribunal.
10. So far as the jurisdiction under Section 35 of the WT Act is concerned, the case of the assessee was that the CIT (A) erred in confirming the orders passed by the WTO under Section 35 of the WT Act. According to the learned counsel appearing for the assessee, the estate duty is debt relating to the entire totality of the assets and is a charge on all the properties belonging to HUF and cannot be attributable to the 1/3rd share of assets that devolved on the legal heirs as per proviso to Section 6 of Hindu Succession Act. He further pointed out that only a notional partition is contemplated under Section 6 of the Hindu Succession Act and on such notional partition debts of HUF cannot be linked to the notionally partitioned assets. Another submission made by the learned counsel was that the WTO has no jurisdiction under Section 35 as there is no error apparent on the face of the record. According to the learned counsel, whether the estate duty liability is an allowable debt or not is a debatable point of law and hence, such issue cannot be dealt with in an order passed under Section 35. On the other hand, the learned Departmental Representative supported the order passed by the CIT (A).
11. This matter came up for consideration before the Tribunal, Madras Bench-B. The learned Accountant Member, who proposed the order in WTA Nos. 741 to 745 (Mds)/84 & WTA Nos. 289 to 292 (Mds)/85 accepted the CIT (A)'s view on merits, i.e. the learned A.M. was agreeable to the view of the CIT (A) that the entire estate duty liability attributable to the undivided share of late Kumararajah must be allowed as a deduction in the wealth-tax assessments to be made on the legal heirs of late Kumararajah subject to the provisions of Section 2(m)(iii) of the WT Act.
12. So far as the jurisdiction of the WTO in invoking the provisions of Section 35 of the WT Act is concerned, the learned A.M. was of the view that "the question whether the debts and liabilities in terms of Section 44 of the Estate Duty Act would include the estate duty payable on the property deemed to pass is a debatable point and there could be possibly two opinions and in any case it is not a mistake apparent on the record".
13. In view of the findings given in. his order, the learned A.M. held that the WTO was not justified in passing the rectificatory orders for these years and the CIT (A) was not justified in sustaining the same on the ground that there was a mistake apparent from the record. With respect I am unable to agree with the view taken by the learned A.M. on the question of rectification done under Section 35 of the WT Act.
14. According to the learned counsel appearing for the assessee whether the estate duty liability is an allowable debt or not is a debatable point of law and hence, such issue cannot be dealt with in an order passed under Section 35. In Estate of Late Omprakash Bajaj's case (supra) the Andhra Pradesh High Court held as under :--
Thus, so far as the liability for payment of estate duty is concerned, it is a personal liability of the accountable person and we respectfully agree with the interpretation placed by the Gujarat High Court on Section 53 of the Estate Duty Act. In the light of that decision--particularly in view of the fact that the liability for payment of estate duty is a personal liability of the accountable person--it cannot be said that it is a 'debt' contemplated by Section 44. Estate duty being a liability not of the estate itself, which passes to the accountable person or which the accountable person comes into possession of, but a personal liability of the accountable person himself, it is difficult to accept the contention urged on behalf of the accountable person before us that estate duty is 'debt' contemplated by Section 44 of the Act.
It further held that:
Section 74(1) of the Estate Duty Act clearly provides that, for the purpose of payment of estate duty, first charge on the immovable property so passing, shall rank in priority 'after the debts and encumbrances' allowable under Part VI of the Act. It is, therefore, obvious that estate duty can never form part of the debts and encumbrances allowable under Part VI of the Act, after which alone it ranks in priority. Section 44, which deals with debts and encumbrances to be allowed while determining the principal value of an estate which passes on the death of a deceased, is one of the sections in Part VI of the Act, and, therefore, so far as Section 44 is concerned, the debts and encumbrances mentioned therein can never include estate duty payable on the estate which passes on the death of the deceased.
The provisions of Section 53 were considered by a Division Bench of the Gujarat High Court in Mrs. Indumati Ratanlal's case (supra). The principal question before the Division Bench of the Gujarat High Court was whether interest paid on a loan borrowed for the purpose of payment of estate duty was deductible for the purpose of income-tax. While dealing with this question the High Court held as under :
There is no difference between interest paid on money borrowed to pay income-tax and interest on money borrowed to pay estate duty. While the former is not paid for the purpose of making or earning the income, the latter is not made for the purpose of making or earning the the assets. Whether interest paid is allowable under Section 57(iii) of the Act or not, depends on the facts of each case. If property is received by a person subject to a charge for payment of a liability and moneys are borrowed for clearing that liability, the interest paid on such borrowed moneys will be an allowable expenditure. If, therefore, at the date when the estate duty was paid by the assessee, the shares were charged with the liability for payment of estate duty, the interest paid on the money borrowed to pay estate duty would be allowable under Section 57(iii). If, however, the moneys had been borrowed by the assessee for the purpose of discharging what is purely a personal liability as an accountable person to pay the estate duty, the interest would not be allowable.
In the case of Kantilal Manilal (supra) at page 294 the Gujarat High Court held that "the quantum of share is fixed : the proportion in which the share is to be counted are also crystallised. This specific share in definite ascertained properties, subject of course to payment of proportionate share of the debts and liabilities, devolves on the heirs by intestate succession". Such proportionate share of debts and liabilities would include the liability to estate duty also does not find a place in the judgment of the above-said High Court. This is the assessee's interpretation for which there is no justification.
15. In the case of Barkat Alikhan (supra) the following question was referred to the Hon'ble High Court:
Whether on the facts and in the circumstances of the case for purposes of determining under Section 36 of the ED Act the principal value of the estate passing on the death of the deceased, the amount of estate duty payable is liable to be taken into account and the principal value of the estate should be reduced accordingly or whether the amount could be deducted as a 'debt' under Section 44 of the ED Act ?
While answering this question the Andhra Pradesh High Court held as under :
A similar question was considered by a Division Bench of this Court in CED v. Estate of Late Omprakash Bajaj [1977] 110 ITR 263 (AP) and it was held that in determining the principal value of the estate of the deceased under Section 36 of the ED Act, the amount of estate duty payable cannot be taken into account and the principal value of the estate should be reduced accordingly. The correctness of this decision is not challenged before us. In view of this decision, the question has to be answered in the negative and against the accountable person.
The amount of estate duty chargeable under Section 5 could not be deducted for purposes of computing the value of the property on death : In re Mrs. Constance Lubeck [1970] 78 ITR 199 (Mad.) ; Smt. V. Pramila v. CED [1975] 99 ITR 221 (Kar.) ; Estate of Late Omprakash Bajaj's case (supra) ; Smt. Shantaben Narottamdas v. CED [1978] 111 ITR 365 (Guj.) and CED v, Smt. P. Leelavathamma [1978] 112 ITR 739 (AP).
16. Thus, the Courts are having uniform view that the estate duty liability is not a debt as contemplated under Section 44 of the ED Act, so as to be capable of rendering itself as a debt to be deducted from out of the estate passing on the death of the deceased.
17. Where without any elaborate argument one could point out to an error and say "here is a, substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it", a clear case of an error apparent on the face of the record would be made out--Thungabhadra Industries Ltd. v. Govt. of A.P. AIR 1964 SC 1372. Where by misreading a section, which is clear, a wrong view is taken and a wrong calculation is made, it would certainly come within the purview of Section 154 as a mistake apparent on the face of the record--CIT v. Mcleod & Co. Ltd. [1982] 134 ITR 674, 677 (Cal.). In ITO v. Asok Textiles Ltd. [1961] 41 ITR 732, the Supreme Court recalled the view taken by it in the earlier case and held that, under these provisions, the Income-tax Officer could examine the record and, if he discovered any mistake, whether of fact or of law, he could rectify it. The Supreme Court also pointed out that the restrictive operation of the power of granting review of mistake or error apparent on the face of the record under Order XLVII, Rule 1, of the Code of Civil Procedure did not apply to a case of rectification of a mistake apparent from the record in income-tax proceedings. (Also see A.H. Wheeler & Co. (P.) Ltd. v. ITO [1964] 51 ITR 92 (All.) ; Arvind N. Mafatlal v. ITO [1957] 32 ITR 350 (Bom.) ; ITO v. ITAT [1965] 58 ITR 634 (All.). But a mere complexity of the problems or that some genuine argument is necessary to discover the same may not be sufficient to oust the jurisdiction of the taxing authorities to rectify such a mistake-- T.S. Rajam v. CED [1968] 69 ITR 342 (Mad.).
18. Thus it could be seen that there is a uniform judicial view that the estate duty liability is not a debt contemplated under Section 44 of the ED Act rendering itself deductible from the principal value of the estate passing on the death of the deceased under Section 36 of the ED Act. Therefore, it cannot be said that it is a debatable point of law. Inasmuch as the issues involved in these appeals is covered by the judgment of the Supreme Court in the case of Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum [1981] 129 ITR 440 on merits, and the issue regarding the deduction of estate duty liability from out of the estate that passing according to Section 36 of the ED Act is covered by the uniform judicial view taken by several decisions cited supra, the rectification of the mistake occurred in the original orders passed by the CED in the present cases, appears to be a natural corrolary. Considering the power of the ITO to invoke the jurisdiction under Section 35 of the WT Act as adumbrated by the Supreme Court in the decisions cited supra, it cannot be said that the WTO was in error in rectifying the mistake under Section 35 of the WT Act in all the assessment years under consideration. In that view of the matter, the orders of the CIT (A) in confirming the action taken by the WTO under Section 35 of the WT Act are justified. Accordingly, the appeals filed by the assessee in all the assessment years under consideration are dismissed.
REFERENCE UNDER SUB-SECTION (11) OF SECTION 24 OF THE WEALTH-TAX ACT, 1957 READ WITH SUB-SECTION (4) OF SECTION 255 OF THE INCOME-TAX ACT, 1961 As there is a difference of opinion between the members we refer the following question to the President under Sub-section (11) of Section 24 of the Wealth-tax Act :
Whether, on the facts and in the circumstances of the case, the rectificatory orders passed by the Wealth-tax Officer under Section 35 of the Wealth-tax Act, 1957 in the view that there was mistake apparent from the record are justified or not ?
ORDER Dr. S. Narayanan, Vice President
1. The above appeals involve the nine assessment years 1970-71 to 1978-79. The appellant is a HUF. The common objection taken in all these appeals is to the orders passed by the WTO under Section 35 of the Wealth-tax Act, 1957 ("the Act") whereunder he excluded the estate duty liability originally allowed as a deduction in the assessment of net wealth for these years. There was a difference of opinion on the validity of such action of the WTO. The learned Accountant Member, who wrote the leading order, held that the WTO was not justified in passing the said orders and that the Commissioner (A) was also not justified in sustaining these orders of the WTO. In other words, according to the learned A.M., there was no mistake apparent from the record so as to clothe the WTO with the jurisdiction to act under Section 35. He was, therefore, of the view that the said orders of the WTO had to be cancelled.
2. The learned Judicial Member, on the other hand, upheld the validity of the WTO's action. According to him, the Commissioner (A) was fully justified in dismissing the assessee's appeals filed against the orders of the WTO under Section 35 for these years. Following this difference of opinion the President directed that the matter be placed before a Third Member for resolving the following controversy :
Whether, on the facts and in the circumstances of the case, the rectificatory orders passed by the Wealth-tax Officer under Section 35 of the Wealth-tax Act, 1957 in the view that there was mistake apparent from the record are justified or not ?
This is how the matter has come up before me.
3. Shri K.R. Ramamani, learned counsel, appeared for the assessee. Shri G. Natarajan presented the Department's case. The relevant facts are : The assessee-family was constituted as under, up to 24-1-1970 : --
Dr. Raja Sir Muthiah Chettiar m Rani Meyyammai Achi
d. 12-5-84 d. 1-3-70
Kumararaja M.A.M. Muthiah M.A.M. Ramaswamy
Chettiar m. Meenakshi Achi
d. 24-1-70
The WTO completed the assessment under Section 16(3) on the assessee-HUF for the assessment year 1970-71 on 23-2-1979, the relevant valuation date being 31-3-1970. On the death of Kumararaja M.A.M. Muthiah Chettiar ("Kumararaja" for short) in accordance with the proviso to Section 6 of the Hindu Succession Act of 1956, the undivided share of Kumararaja devolved on his legal heirs viz. his wife Meenakshi Achi, his father Raja Sir Muthiah Chettiar and his brother M.A.M. Ramaswamy. Since his undivided share consisted of a 1/3rd share in the total properties of the assessee-HUF, the devolution of this 1/3rd share was recorded by the Commissioner (A) as under : and there has been no dispute raised on this :--
1. Kumararani Smt. Meenakshi Achi (wife) 1/6
2. Since the mother of Kumararajah died on 1-3-1970, her 1/6 share devolved on her legal heirs viz.
Dr. Rajah Sir M.A. Muthiah Chettiar and M.A.M. Ramaswamy. Thus Dr. Raja Sir Muthiah Chettiar obtained 1/12 share of the HUP property 1/12
3. M.A.M. Ramaswamy obtained the remaining 1/12 share of the HUP property 1/12 1/3
4. The accountable person of the late Kumararaja included the above 1/3rd undivided share (in the property of the assessee-HUF) as part of the principal value liable to estate duty in the estate duty account filed by him. The estate duty attributable to such undivided 1/3rd share amounted to Rs. 8,57,050. It would be of interest to note here that under Section 74(1) of the Estate Duty Act, 1953 estate duty payable in respect of property, movable or immovable, passing on the death of the deceased shall be a first charge on the immovable property so passing in whomsoever it may vest on his death.
5. The assessee-HUF submitted its wealth-tax return for the assessment year 1970--71 and in this return it excluded the value of the 1/3rd share devolving on the legal heirs of the late Kumararaja under the Hindu Succession Act. Such exclusion from the net wealth of the assessee-HUF was accepted for assessment by the WTO also. The assessee, however, did not stop with this. It went on to claim that the entire estate duty attributable to the undivided share of the late Kumararaja viz. Rs. 8,57,050 should be deducted as a liability from the wealth returned by it. The contention for the assessee before the WTO in this regard was that the entire estate duty could be recovered from the property remaining with the HUF as on 31-3-1970 under the provisions of Section 74 of the Estate Duty Act.
6. The WTO did not accept the above claim for deduction of Rs. 8,57,050. Taking note of the fact that he had to exclude 1/3rd of the value of the properties of the HUF as on 31-3-1970 from assessment to wealth-tax, following the death of the Kumararaja on 24-1-1970, the WTO excluded 1/3rd of the estate duty liability of Rs. 8,57,050 i.e. he allowed as a deduction in the wealth-tax amount 2/3rd of such liability. He did this even though the entire estate duty of Rs. 8,57,050, as already noted, was attributable to the aforesaid 1/3rd share being held to be property passing on the death of the Kumararaja. As a result in the original assessment for 1970-71 the WTO allowed a deduction of Rs. 5,71,366 (Rs. 8,57,050 less 1/3rd thereof). Subsequently the WTO revised this figure by an order dated 4-9-1982. The estate duty liability of Rs. 8,57,050 was revised to Rs. 8,37,611; correspondingly Rs. 5,71,366 was revised to Rs. 5,58,408. These revisions of the figures are not crucial to the point in dispute but have been mentioned to complete the facts.
7. On 21-2-1983 the WTO passed an order under Section 35 of the Act after due notice to the assessee. By this order he held that no portion of the estate duty liability of Rs. 8,57,050 was deductible from the wealth of the assessee-HUF. The WTO's reasoning was: since the entire 1/3rd share of the late Kumararaja stood excluded from the assets of the HUF the entire estate duty liability corresponding to that 1/3rd share should also be ignored. In this view he withdrew the deduction of Rs. 5,48,408 that had been allowed as a deduction in the wealth-tax assessment of the assessee-HUF for this year.
8. The assessee contested this order of the WTO (under Section 35) in appeal. The Commissioner (A), however, dismissed the appeal. In doing so he recorded the following : --
(i) The WTO had full jurisdiction to invoke Section 35. This is not a case where there was a debatable point at issue.
(ii) Section 74 of the Estate Duty Act did not help the assessee. Under that provision estate duty payable in respect of property passing on the death of a person is a first charge on the property so passing. The estate duty attributable to the 1/3rd share of the Kumararaja was a charge only on that 1/3rd share which so passed on his death. The coparceners other than the deceased were not liable to pay such duty out of the properties of the HUF not passing on such death.
(iii) No doubt, there was no physical partition of the properties of the HUF by metes and bounds. There was only a notional partition in terms of Section 6, proviso, of the Hindu Succession Act. It was also possible that the estate duty authorities might have to recover either the entire estate duty of Rs. 8,57,050 or 2/3rd thereof from the assets of the HUF even after the death of the deceased, but in such an event the assessee-HUF would be entitled to recover the estate duty so paid by it from the legal heirs of the Kumararaja. In any case no deduction can be allowed for any estate duty liability from the net wealth of the assessee-family. The net wealth of the assessee-family has to be computed simply excluding the 1/3rd share in the net assets of the assessee-family as on 31-3-1970.
(iv) Section 2(m) of the Act was also relevant in this regard. That provides that any debts which are secured on any property in respect of which wealth-tax is not chargeable are not to be deducted from the wealth of the assessee. In the present case no wealth-tax is chargeable on the undivided 1/3rd share of the Kumararaja. Hence the entire estate duty liability which is a charge on such 1/3rd share should be ignored.
(v) It follows from the above that the entire estate duty liability attributable to the undivided share of the Kumararaja must be allowed as a deduction in the wealth-tax assessments to be made on the legal heirs of the Kumararaja. Such relief would be subject to the provisions of Section 2(m)(iii) of the Act. Otherwise a part of the estate duty liability will not be allowed either in the present assessments or in the wealth-tax assessments of the legal heirs. That would be against the provisions of the Act and also against equity.
9. The WTO, it may be noted, had passed similar rectification orders under Section 35 for the subsequent assessment years of 1971-72 to 1978-79 also, whereby he withdrew the earlier deductions of estate duty liability (of the estate of Kumararaja) allowed to the extent of 2/3rd in the corresponding original assessments of the assessee-HUF for those years. The assessee contested such orders but the Commissioner (A) confirmed the said orders by his orders of 11-6-1984 and 10-1-1985 for the assessment years 1970-71 to 1978-79. (The order of 11-6-1984 covers the assessment years 1970-71 to 1974-75 and that of 10-1-1985 covers the assessment years 1975-76 to 1978-79.) In the latter order the same reasoning as was recorded for the assessment years 1970-71 to 1974-75 in the order of 11-6-1984 was followed by the Commissioner (A). The assessee contested both these orders of the Commissioner (A) in further appeal.
10. The learned Accountant Member accepted the assessee's appeals. His reasoning was briefly as follows :
(i) There was no partition by metes and. bounds on the death of Kumararaja. There was notional partition by virtue of the proviso to Section 6 of the Hindu Succession Act. The property that belonged to the assessee-HUF and the share that devolved on the legal heirs of the Kumararaja "in the absence of physical partition by metes and bounds" continued to be enjoyed as tenants-in-common and the legal heirs also continued to be members of the asseesee-family.
(ii) The property that so devolved or interest in the property thereof was under the management of the karta of the assessee-family, who also happened to be the accountable person in this case. It was he who rendered the accounts of the deceased. In terms of Section 53 of the Estate Duty Act the accountable person was accountable for the whole of the estate duty limited to the extent of the assets actually received.
(iii) Section 39(3) of the Estate Duty Act was also relevant in this regard. The valuation of the entire property of the assessee-family was the first step in the direction of ascertaining the share of the Kumararaja and also for the purpose of allowing proportionate debts and liabilities thereof. Hence the deduction allowed in the original assessments (WT) of the assessee-HUF to the extent of 2/3rd of the estate duty payable was in order. No doubt, the estate duty payable on the property passing on the death of the deceased was thus bifurcated between the assessee-family and the legal heirs of the deceased in the ratio of 2/3rd and 1/3rd as per the original assessments, although the estate duty payable is attributable to the share of the deceased that passed on his death.
(iv) Section 74 of the Estate Duty Act creates a charge on immovable property passing on the death of the deceased "after the debts and encumbrances allowable under the Estate Duty Act". In these circumstances the assessee chose to claim the entire liability to estate duty but the WTO bifurcated the liability in the ratio of 2/3rd (assessee-HUF) and 1/3rd (assessment of legal heirs). The assessee could discharge the estate duty liability only by sale of its properties or of the property that passed on the death of the deceased. In the absence of a partition by metes and bounds the legal heirs would not be able to effect any such sale. If the assessee-family discharged the liability from out of its properties, it would be entitled to recover the same from the legal heirs out of the share of the property that passed on the death of deceased. In other words, the joint and several liability imposed under Section 53(5) of the Estate Duty Act would come into operation so far as the payment of estate duty liability is concerned.
(v) 'It is only a matter of fineness of law that the liability should be appropriated to the share of the Hindu undivided family property that devolved on the legal heirs in terms of proviso to Section 6 of the Hindu Succession Act.' Hence the liability to estate duty is attributable only to the share of the HUF property that is deemed to pass on the death of the deceased in terms of Section 7(1) of the Estate Duty Act.
(vi) The allowance of 2/3rd liability of estate duty in the hands of the assessee-HUF was not a mistake apparent from the record that could be rectified under Section 35 of the Act. The liability to estate duty of every accountable person is a personal liability limited to the extent of the assets actually or constructively received by him. The question whether debts and liabilities in terms of Section 44 of the Estate Duty Act would include the estate duty payable on the property deemed to pass is a debatable point. There could be, conceivably, two opinions about it. It cannot represent a mistake apparent from the record.
(vii) In the instant case there was only a change of opinion on the part of the WTO. There was no obvious and patent mistake apparent from the record. A mistake would not be something which can be established only by a long-drawn process of reasoning on points on which there may be, conceivably, two opinions. Action under Section 35 was, therefore, not justified.
11. The learned J.M. who took a contrary view recorded the following position:
(i) Courts have taken the uniform view that estate duty liability is not a debt as contemplated under Section 44 of the Estate Duty Act so as to be capable of rendering itself deductible from the principal value of the estate on the death of the deceased. Thus it cannot be said that there is any debate on this point of law.
(ii) The Supreme Court held in the case of Gurupad Khandappa Magdum (supra) that it is to be assumed that a partition had in fact taken place between the deceased and the other corparoeners immediately before his death in view of Explanation 1 to Section 6 of the Hindu Succession Act, 1956. This assumption which the statute requires to be made, that a partition had in fact taken place, must permeate the entire process of ascertaining of the ultimate share of the heirs through all its stages. Secondly the issue regarding: deduction of the estate duty liability from out of the estate passing on the death of the deceased according to Section 36 of the Estate Duty Act is also covered by the uniform judicial view taken by various High Courts. In such a clear context it must be held that there was a mistake in the original orders "passed by the CED in the instant case". Hence rectification of the same was in order. In this view of the matter, the orders of the Commissioner (A) had to be confirmed and the appeals dismissed.
12. Shri Ramamani took me through the orders of the authorities below as well as the orders of the learned A.M. and the learned J.M. He placed strong reliance on the order of the learned A.M. He stressed the fact that the assessee-HUF continued to exist even after the death of the Kumararaja, even though a notional partition might have been envisaged under the Hindu Succession Act. In fact the estate duty proceedings were taken out by the Department in the name of Dr. Raja Sir Muthiah Chettiar and in term of Section 2(xii) read with Section 53(1)(b) of the Estate Duty Act it was the case for the assessee that 2/3rd of the estate duty liability in this case was that of the assessee-HUF. The deductions given in the original assessments under appeal here were, therefore, in order. In any case (Shri Ramamani contended) Section 35 of the Act was wholly inapplicable because this was a matter on which there could conceivably be two opinions. Shri Ramamani also referred to the decision in Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 (Mad.). In particular, the following passage (at p. 137) from the judgment of Balasubramanyan, J. was referred to :
In our judgment, the expression 'prejudicial to the interests of the Revenue' is not to be construed in a petty-fogging manner, but must be given a dignified construction. It may be noted that the use of the expression 'Revenue' in our opinion, is significant. It denotes some kind of abstraction or symbol in the same sense in which the expression 'crown' is used to distinguish it from any person enthroned. The interests of the Revenue is not to be equated to rupees and paise, merely. There is a biblical saying that we do not live by bread alone. Varying this saying, it may be said that the Revenue does not live by tax alone. In this sense, therefore, the interests of the Revenue are not tied up merely with realising as much revenue as possible, willy-nilly, merely looking to the productivity aspect of taxation. The jurisdiction of the Commissioner under Section 263 is undoubtedly a supervisory jurisdiction. It is intended for interference in special cases to counteract orders which are erroneous as well as prejudicial to the interests of the Revenue....All that we wish to observe is that the scope of the interference under this section is not to set aside merely unfavourable orders and bring to tax some more money to the treasury. Nor is the section meant to get at sheer escapement of revenue which, as is well known, is taken care of by provisions elsewhere in the Act such, for instance, as Section 147 of the Act. The prejudice must be prejudice to the revenue administration.
13. The point sought to be made by Shri Ramamani was that rightly or wrongly a deduction had been allowed against a genuine statutory liability. It should have been allowed fully in the assessment of the legal heirs of the late Kumararaja. Due to some mix-up (the origins of which are not clear at this stage) the deduction was not claimed in the assessments of the legal heirs of the late Kumararaja. Instead, the deduction was claimed in the assessments of the assessee-HUF and both the Department and the assessee agreed to a particular proportion of deduction in this regard for all these years. To efface this arrangement would be to seriously upset the equities of the situation. The assessments of the legal heirs of the late Kumararaja would now be beyond the limitation period for any consequential relief. Shri Ramamani agrees that no doubt equity and tax are strangers, but asks, does it mean that an appellate body like the Tribunal, committed to delivering substantial justice must support orders which show up the tax to be the sworn enemy of equity ?
14. Shri Natarajan, on the other hand, supported the orders of the Commissioner (A). His approach was simple and direct. He submitted that estate duty was payable only in respect of property passing. It would be a charge only on such property. What was the property that passed here? It was only the 1/3rd undivided share of Kumararaja. There can be no dispute about it. What was the value of that share? What was the estate duty liability relating to such share? Shri Natarajan pointed out that as the orders of the authorities below made it clear, such liability was Rs. 8,37,611. Now this liability can be considered as a deduction only against the net wealth of the person who owned the said 1/3rd share as on 31-3-1970 i.e. the legal heirs of the late Kumararaja. It had absolutely no connection with the wealth of the assessee-family, that family was a totally different entity in law. In fact, the assessee-family gained a tax advantage in that the 1/3rd (undivided) share of the late Kumararaja went out of reckoning after 24-1-1970 so far as its net wealth was concerned. The WTO accepted this position. He assessed the assessee-family on its original wealth (prior to 24-1-1970) minus the said 1/3rd share. The WTO however committed a serious error in considering for deduction the estate duty liability that pertained to the said 1/3rd share. When the WTO proposed to exclude the asset (1/3rd share of the deceased) from its wealth the assessee had no objection at all. In fact that was the assessee's claim also. Following such exclusion, logically and legally, the assessee itself should have excluded the estate duty liability relating to that 1/3rd share also. The assessee instead claimed a deduction for the estate duty liability, may be due to a mistaken appreciation of the legal position. And the WTO, through oversight allowed the claim to the extent of 2/3rd thereof. He thus committed a clear error in law. It was this error he rectified under Section 35. No doubt the question of equity would arise if no such deduction had been claimed by the legal heirs of the late Kumararaja in the assessments concerned. But (the Departmental Representative contends) two wrongs would not make one right. To have allowed deduction of the estate duty liability of the late Kumararaja's estate in the wealth-tax assessments of the assessee-HUF was indefensible in law; and not to rectify such a error would be another error. Hence the Commissioner (A) was justified in maintaining the impugned orders of the WTO.
15. I have considered the position. The learned counsel for the assessee had referred in fact to the point that a HUF continues to exist even after the death of a coparcener, but with a diminished share of the ancestral assets. He had also in this regard drawn my attention to State of Maharashtra v. Narayan Rao Sham Rao Deshmukh [1987] 163 ITR 31 (SC). I do not, ho./ever, see that this position in law can help the assessee in the instant case. What was really a simple matter was, through oversight perhaps, complicated by the ITO at the original stage. One of the coparceners of the assessee-HUF died before the relevant valuation date. The Hindu Succession Act applied. In terms of that Act, 1/3rd of the assessee-family's properties devolved on the legal heirs of the deceased coparcener i.e. as on 31-3-1970 and onwards the assessee-HUF was no longer assessable on 1/3rd share of the property which so passed on the death of the deceased coparcener. There was of course estate duty payable on the property which so passed. This again was a liability which could have had nothing to do with the wealth of the assessee-family. Section 74(1) of the Estate Duty Act does not hold that the liability of the deceased coparcener as in this case would be the liability of the HUP of which the coparcener had been a member. All it says is that the estate duty liability would be the first charge on the immovable property so passing.
16. In other words there was a clear mistake of law when the WTO allowed the deduction to the extent of 2/3rds of the estate duty liability relating to the property that so passed on the death of the deceased. The assessee-HUF was not liable in law as regards such estate duty and the fact that in law the HUP continues even after the death of the Kumararaja does not improve the position for the assessee. The WTO acted validly when he invoked Section 35 and withdrew the deductions for estate duty liability originally allowed from the net wealth of the assessee-HUF. I would, therefore, agree with the conclusion recorded by the learned J.M. and hold that the Commissioner (A)'s orders do not call for interference.
17. The matter will now go back to the Bench which originally heard the appeals for disposal in accordance with law.