Law:

Section:

Section 5, read with section 15, of the Estate Duty Act, 1953 and sections 5 and 2(d) of the Provident Funds Act, 1925 - Property passing on death - Deceased, who was member of Indian Civil Service, subscribed to Indian Civil Service (Non-European Members) Provident fund - On his death amount to his credit was paid to his nominee - He had power to change nomination during his life time - Whether on facts, subscriber had property in fund which passed on his death and, therefore, provisions of section 5 of 1953 Act would apply - Held, yes - Whether, therefore, amount in question was liable to estate duty in hands of accountable person - Held, yes. FACTS The deceased was a member of the Indian Civil Service. He had subscribed to the Indian Civil Service (Non-European Members) Provident Fund and at the time of his death certain amount was standing credit to his account. He had nominated his wife as the person entitled to receive the amount in the event of his death before retirement. Accordingly, the amount was paid to her. The Assistant Controller brought this amount to tax under section 15. The Appellate Controller confirmed the assessment. On appeal to the Tribunal, it was contended that the amount did not form part of the estate of the deceased, since it was payable to the nominee direct and that the deceased had no disposal right over the amount. The Tribunal, however, confirmed the assessment. On reference : HELD Under section 247(1) and 250(1) of the Government of Indian Act, 1935, the Secretary of State for India notified the Indian Civil Service (Non-European member) Provident Funds Rules, 1943. The summary of said Rules would go to show that the subscriber had (1) a power to nominate the person who was entitled to the fund at the time of his demise, (2) to withdraw the amount to the credit of the fund at any given time in accordance with the Rules, (3) to make changes of nomination as and when he considered necessary, subject to course to the nominee being a member of the family, and (4) to substitute the provident fund by the pension fund. There is nothing in the Rules to show that anyone else has title to the Fund during the lifetime of the subscriber.…

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