TMI Blog2003 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... rded the said finding setting aside the order passed by the appellate authority. - we answer the question in the affirmative, i.e., in favour of the Revenue and against the assessee. - - - - - Dated:- 6-5-2003 - Judge(s) : DR. B. S. CHAUHAN., GHANSHYAM DASS. JUDGMENT At the instance of the assessee the following question has been referred under section 256(1) of the Income-tax Act, 1961 (hereinafter called "the Act"), for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in sustaining levy of interest under section 216 of the Income-tax Act?" The assessee is a company incorporated under the Companies Act, 1956, and runs a sugar mill in Shamli, District Muzaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under section 216 of the Act nor any finding was recorded by him to the extent that the return was filed on the basis of underestimate, it was improper for the Revenue to charge the interest under section 216 of the Act and unless there was something to show that underestimation was with a view to pay reduced tax, the provisions of section 216 of the Act are not attracted. He has submitted that some underestimation may not always attract any provision of section 216 of the Act. On the contrary, Shri Chopra, learned standing counsel for the Revenue, has submitted that the difference in the first estimate and subsequent estimate had been Rs. 48 lakhs and there was no explanation of the assessee for the unexpected increase in the income. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may be erroneous and so on. But section 216 refers to underestimation of advance tax under sub-sections (1), (2), (3) and (3A) of section 212. It does not limit such underestimation of advance tax to underestimation for reasons other than underestimation of current income." In CIT v. Elgin Mills Co. Ltd. [1980] 123 ITR 712, this court held that furnishing of underestimation should be deliberate to attract the provisions of section 216 of the Act. However, in Oudh Sugar Mills Ltd. v. CIT [1994] 210 ITR 692 (Bom), it has been held that whenever there is or has been underestimation of advance tax payable due to underestimation of aggregate income, interest can be imposed under section 216 of the Act. In CIT v. Hindusthan Sanitary Ware an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e control of the assessee. The court further held as under: "If the Legislature wanted interest levied under section 216 to be compensatory in character, then it would have used a different phraseology and would not have conferred a discretion on the Income-tax Officer. If payment of interest under this Act was intended to be compensatory, then on mere underestimation of the advance tax payable and less payment of advance tax and mere deferment of the payment of advance tax, the Legislature would have made payment of interest automatic. The intention of the Legislature in enacting section 216 clearly appears to be to make that the assessee pays interest who deliberately or intentionally paid less advance tax. Thus, in each case, if the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee during the period from June 9, 1977, to September 30, 1977, giving rise to additional income and, secondly, that there was excise rebate ordered subsequent to June 9, 1977, which went to add to assessment's estimated current income. Thus, the said rebate orders, both bearing dates subsequent to September 30, 1977, did not give rise to any unexpected income to the assessee. Impugned estimate dated June 9, 1977, was thus an underestimate clearly to the extent of over Rs. 16 lakhs at least. In other words, the assessee has not been able to establish that there was unexpected increase in income to the extent of Rs. 48 lakhs. The Appellate Commissioner's finding is set aside and the Income-tax Officer's finding is restored...." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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