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TMI Blog1979 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the assessee, viz., that there was no under-estimate of current income within the meaning of s. 216, that interest under s. 216 was rightly not charged in the original assessment order and the subsequent order under s. 154 charging interest under s. 216 was without jurisdiction. But he upheld the alternative contention of the assessee that the computation of interest under s. 216 was not correct. He held that the instalment of advance tax payable by the assessee by 13th Dec., 74 was Rs. 28,780, that since he paid Rs. 8,429 only on 13th Dec., 74 towards the first instalment of advance tax, the shortfall was Rs. 20,351 and interest at 12 per cent was payable on that shortfall of Rs. 20.351 at 12 per cent for the period between 15th D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r filed a revised estimate of the advance tax payable by it for that year. In the light of the revised estimate filed by the firm the assessee filed his own revised estimate, according to which the advance tax payable by him for that year was Rs. 57,561. Since he had already paid Rs. 8,429 by 15th Dec., 74 as the first instalment of the advance tax as per his earlier estimate dt. 13th Dec., 74 he paid the balance of Rs. 49,132 by 15th March, 75. 4. The ITO completed the assessment for the asst. yr. 1975-76 on a total income of Rs. 1,11,750 by the assessment order dt. 26th March, 76, accepting the return filed by the assessee but no interest under s. 216 was charged in that assessment order on the shortfall in the payment of the first inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11th March, 75 was correct and the balance of advance tax due as per the revised estimate was paid by the assessee by the due date for payment of the second instalment, the assessee's original estimate filed on 13th Dec., 74 was incorrect and the reduced amount of first instalment of advance tax payable by him by 15th Dec., 74 by filing the incorrect estimate and, therefore, under the provisions of s. 216(a) he was liable to pay interest on the shortfall in the first instalment of advance tax paid by him. 7. Before going into the question as to whether interest under s. 216 was chargeable in the present case, we will first deal with the question as to whether the interest under s. 216 could not be charged at all in any by an order under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be said to be a mistake apparent on the face of the record and such interest could not be charged later through an order of rectification under s. 35 (corresponding to s. 154 of the present Act). Even in the case of interest payable under s. 139(8), it would appear from the following passage in Chaturvedi Pithisaria's Income-tax Law that the Guj. High Court held that in a case where the facts and circumstances would go to show that there was no waiver of interest under s. 117A the ITO was justified in charging interest through rectification proceedings: "In Dalwadi Co. vs. CIT (I.T.R.No.54 of 1972 decided by the Gujarat High Court on 17th Dec., 73), the ITO did not charge interest under s. 139(8) for delay in submission of return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the jurisdictional facts specified in that section are established. In order to charge interest under s. 216(a) the jurisdictional fact to be established is that of making the regular assessment, the ITO has found that the assessee had under-estimated the advance tax payable by him and thereby reduced the amount payable in either of the two instalments. Once that jurisdictional fact is established, the charging of interest is no doubt automatic. Neither the ITO in his order under s. 154 nor the AAC in his appellate order had recorded any finding that the assessee has under-estimated the advance tax payable by him. On the contrary, the AAC has proceeded on the basis that there is no need for any deliberate under-estimate to attract this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the assessee that he filed his original estimate on the basis of the estimate filed by the firm of which he was a partner and that when that firm filed a revised estimate in its case he also filed a revised estimate as a consequence thereof. The AAC in the view taken by him, had not considered this aspect, viz., whether the assessee filed his original estimate knowing or having reason to believe it to be untrue and thereby reduced the first instalment of advance tax payable by him. In the absence of a finding that the assessee had under-estimated the advance tax payable by him and thus reduced the first instalment of advance tax, the question of charging interest under s. 216 would not arise. Since the AAC had not considered this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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