T.D. SUGLA, J.

In this estate duty reference at the instance of the department, the Tribunal has referred to this Court only one question of law under section 64(1) of the Estate Duty Act, 1953. The question reads thus:

"Whether on the facts and circumstances of the case, income tax refund of Rs. 13,69,092/- payable to the deceased was includible in the estate of the deceased, though it was received after deceaseds death by the accountable person"

2. The deceased late Gen. S.S.J.B. Rana died on June 4, 1976. The proceedings relate to the estate duty assessment in respect of his estate. The controversy is about the sum of Rs. 13,69,092/- which was received by his legal representatives as refund of the income-tax and wealth-tax for different assessment years pertaining naturally to the period prior to his death. While, according to the Estate Duty Authorities and the Tribunal, the aforesaid amount of Rs. 13,69,092/- represented the property of the deceased passing on death and thus chargeable to estate duty, it was the contention of the accountable persons that the refund had become due after the death of the deceased and thus, was not a property passing on death.

3. It is desirable to mention that out of the aforesaid sum of Rs. 13,69,092/- a sum of Rs. 13,39,859/- represents refund of income-tax for the assessment year 1976-77. Facts relating to other amounts of refund are stated to be similar. In the circumstances, it is proposed to refer to the facts pertaining to the above amount of refund only. The deceased had, during the financial year ending March 31, 1976 paid income-tax in advance which was found to be far in excess of his actual income tax liability for the year. He died on June 4, 1976. Return of income for the year 1976-77 was filed by the legal heirs and representatives on September 30, 1976. If the returned income was accepted, there would have been a refund of about Rs. 22 lakhs and odd. However, on completion of the assessment on July 27, 1979, the amount of refund worked out to Rs. 13,39,859/-. This amount was subsequently refunded.

4. In order to appreciate the controversy involved herein, we have to first consider the nature of tax paid by an assessee in advance i.e. whether it is a payment on account or a deposit or whether it is a payment of tax due. Sections 210 and 212 of the Income-tax Act, 1961 are relevant in this behalf. The deceased being admittedly a person previously assessed by way of regular assessment, he was liable to pay advance tax only on receipt of a notice from the Income-tax Officer under section 156 read with section 210(1) of the I.T. Act. We are not concerned in this reference with the provisions under sub-sections (2) and (3) of that section. Section 212 (3-A) requires an assessee to file his own estimate of advance tax payable by him if his income on the basis of which tax was amended by the Income tax Officer was likely to exceed by 1/3rd of such income. If advance tax is not paid as required under these provisions, the assessee is treated as an assessee in default and as held by this Court in the case of (Prakash Cotton Mills P. Ltd. v. G.I.T.)1, 120 I.T.R. 497 even penalty can be imposed for non-payment of advance tax. In the circumstances, it has to be held that the tax paid in advance is neither a payment on account nor a deposit. It is discharge of legal obligation under the Status. In a similar case that came up before the Supreme Court in the cases of (Commr. of Wealth tax v. Standard Vacum Oil Co. Ltd.)2, 59 I.T.R. 569 (S.C.) it was held, that there was no material difference between advance tax paid under section 18- A and tax due and paid under a demand notice issued after an assessment. Advance tax demanded and not paid was held to be debt owed by the assessee within the meaning of sub-section (a) of section 2 of the Wealth-tax Act.

5. Next pertinent question is when does the right to refund arise. As stated earlier, the return of the income for the assessment year 1976-77 was filed on September 30, 1976 i.e. about three months after the death. Even then we will assume for the present that the deceased on the last day of the financial year i.e. 31-3-1976, could be aware of the fact that the income-tax payable by him for the year was muchless and that he was entitled to refund. The question will still be whether this awareness amounts or can in law amount to an accrual of a right to refund in the nature of property or whether it was only a right to claim. It is true that the world property has been defined in section 2(15) of the Estate Duty Act in very wide terms. While dealing with the concept of property under the Estate Duty Act, the Supreme Court in (M. Ct. Muthiah and anr. v. C.R.D.)3, 161 I.T.R. 768 agreeing with the view of the Jammu & Kashmir High Court in the case of (C.R.D. v. Kasturi Lal Jain)4, 93 I.T.R. 435, at page 791 observed that insurance money in the case of accident became property on the happening of specified contingency. That property arose on the death of the deceased during the subsistence of the policy. The property came into being on that contingency after death. Therefore, no property can be deemed to pass on the death of the deceased as no property existed at the time of the death. Under the circumstances, it will be reasonable to assume that in order to fall within the expression property and "property passing on death", the property in some shape or the other must exist at the time of the death. In the present case, the deceased could not have claimed any refund until the assessment was completed and the refund became due as a result of that assessment. This is evident from the fact that on the basis of return the amount of refund would have been more than Rs. 22,00,000/-. It is no bodys case that amount was property at the time of death. The amount due on completion of assessment alone is considered property for the purpose and rightly so as it could not be said with certainly that any amount by way of refund would be due until the finalisation of assessment. All these events were to happen and happened in this case subsequent to the death of the deceased. It cannot therefore be accepted that just because on the basis of the returned income for the financial year ending 31-3-1976, the deceased would be entitled to refund of a particular amount, the right to refund as distinct from mere right to claim had accrued to the deceased before 4-6-1976.

6. Gujarat High Court had on occasion to consider this question in Wealth-tax proceedings in the case of (Commissioner of Wealth-tax v. Arvindhbhai Chunubhai)5, 133 I.T.R. 800. In that case the assessment proceedings were pending on the valuation date. The Court observed that even assuming that there was likelihood of refund in future and the likely amount of refund might be an asset, it was not capable of evaluation on the valuation date and such an asset was not capable of being ascertained. Rajasthan High Court considered this very question in the case of (C.I.T. v. Rangnath Bangur)6, 152 I.T.R. 71. Applying the Supreme Court decisions in 59 I.T.R. 569 and (Assam Oil Co. Ltd. v. C.W. T.)7, 60 I.T.R. 267. It was held that the assessee had no claim or title to the refund prior to the date the assessment was completed and therefore the amount of refund was not an asset in the hands of the assessee on the valuation date. It is true that Madras Court in the case of (Srinivasan v. C.W.T.)8, 152 I.T.R. 599 took a contrary view. However, in a subsequent decision reported in (Fazalbhoy Investment Co. P. Ltd. v. C.I.T.)9, 176 I.T.R. 129 the Court doubted its decision in 152 I.T.R. 599 and directed the Tribunal to refer the question of law to it under section 27 of the Wealth Tax Act. In a different context Kerala High Court in the case of (Her Highness Setu Parvati Bayi v. C.W.T.)10, 170 I.T.R. 197 held that the assets on the valuation date are not dividend and not gross dividend, as the tax deducted at source from the dividend being not an asset on the valuation date.

Allahabad High Court had an occasion to consider this question in a Estate Duty case. The case is (Smt. Shaila Prasad v. C.R.D.)11, 142 I.T.R. 315. Referring to the definition of the expression "property passing on death" in section 2(16), the Court held that even though assessment was completed long after the death the amount of refund was referable to the death and therefore property passing on death includible in the principal value of the estate. It is pertinent to mention that Allahabad High Court considered this very question again in (C.E.D. v. Maharani Raj Laxmi Devi)12, 168 I.T.R. 389. The earlier decision 142 I.T.R. 315 was not brought to the notice of the Court. It was held that the amount of refund as a result of assessment completed after the death was not property passing on death and therefore not includible in the principal value of the estate.

7. Shri Jetly, the learned Counsel for the department, contended that the decisions rendered under the Wealth-tax Act were distinguishable inasmuch as the expressions "property" and "property passing on death" had a definite meaning under the Estate Duty Act being defined under sections 2(15) and 2(16) of the Estate Duty Act. He laid great emphasis on the fact that Income tax due on the valuation date or on the date of the death, for the period immediately prior to death or valuation date must of necessity be computed after the death or valuation date as the case may be, yet such dues are admittedly treated as the liability of the assessee deceased on such dates. There is no good reason why a different standard should be applied while considering the question of refund. In support of his contention, Shri Jetly placed reliance on Full Bench of Delhi High Court decision in the case of (Dewan Labh Chand v. Controller of Estate Duty)13, 83 I.T.R. 538 Mysore High Court decisions in the case of (M. Lakshaman v. Controller of E.D)14, 55 I.T.R. (F.B.) 20 and the Supreme Court decision in the case of (Mrs. Khorshed Shapoor Chenai v. Asst. C.W.D.)15, 122 I.T.R. 21. Referring then to the provisions of section 23-B(2) of the Income-tax Act, he stated that on the death of a person his legal heirs were entitled to receive any refund due to the deceased. Thus, right not only to claim but also to receive refund passed on the death of the deceased. What was postponed is only the ascertainment of quantum of it till the completion of assessment.

8. Expression property has not been defined in the Wealth-tax Act. The expression assets is defined in section 2(e) of the Wealth-tax Act to include property of every description moveable or immoveable except specified properties. Both expressions are defined in widest possible terms. There is, thus, no material difference between assets under the Wealth-tax Act and property under the Estate Duty Act.

In any event the Supreme Court held in 161 I.T.R. 768 (supra) at page 791 in the context of accident policy :

"The property in this case is the sum of Rs. 2 lakhs which became receivable by the nominee or the legal representatives of the deceased because of the death of the deceased in an air accident during the subsistence of the policy. That right to the sum arose because (a) the deceased died, (b) in air accident, (c) during the subsistence of the policy, that property was not there before. Therefore, the property came into being on that contingency after death. In our opinion, therefore, no property can be deemed to pass on the death of deceased..."

In the circumstances unless it is possible to say that there was some amount due by way of the refund as of right at the time of the death, it will not be property under the Estate Duty Act. Until the completion of assessment, the deceased or his heirs had no right to claim refund as whether or not there would be any refund due was to depend upon the completion of the assessment. The assessment could have resulted in a further demand rather than any refund. The fact that refund due was found to be Rs. 13,39,859/- as against Rs. 22,00,000/- and odd on the basis of returned income supports our view that until the completion of assessment nothing was certain. In the circumstance, it is not possible to accept Shri Jetlys contention that on the date of death the deceased had or can be said to have any right to claim refund. There was no property in existence at the time of the death of the deceased. No doubt definition of the expression "property passing on death" superficially looked at, gives an impression that even a refund due as a result of assessment completed after the death may on account of its reference to a period before death is property passing on death within the meaning of section 2(16). Since, however, mere right to claimed refund it ultimately found due cannot be held property under section 2(15), it cannot certainly fall under the expression "property passing on death" merely because that expression pertakes within it an ascertainment subsequent to but with reference to death.

9. Gujarat and Rajasthan High Courts in cases (supra) have admittedly held that refund falling due as a result of the assessment order or any other order after the valuation date, is not an asset on the valuation date under the W.T. Act. Madras and Allahabad High Courts have taken a conflicting views in the matter. Having regard to the Supreme Court decision in 161 I.T.R. 768, in our judgment mere right to claim refund which may or may not materialise is not property within the meaning of section 2(15) of the Estate Duty Act. Once it is held that it is not a property, the question of its passing on death could not arise.

In view of the discussion above we answer the question referred to us by the Tribunal in the negative and in favour of the accountable persons.

No orders as to costs.

Question answered in negative.