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TMI Blog2003 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... r mill in Shamli, District Muzaffarnagar. For the assessment year 1978-79, the return was submitted for the income derived from manufacture and sale of sugar, showing an estimate of Rs. 15 lakhs. Subsequently, the revised return was filed in December, 1977, on an estimate of Rs. 65 lakhs. The assessment order dated July 31, 1980, was passed on the basis of the revised return on the income of Rs. 65,29,900. The last part of the order runs as under: "Charge interest as per law. Issue notice under section 274/273(a). Charge interest under section 215. Assessed. Issue demand notice and challan." It appears that while issuing the demand notice along with the demand of charge of interest under section 215, interest was also demanded under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d increase in the income. The underestimation was with regard to pay reduced tax, and therefore, the provisions of section 216 of the Act are attracted. Section 216 of the Act reads as under: "216. Interest payable by assessee in case of underestimate, etc.-Where, on making the regular assessment, the Assessing Officer finds that any assessee has- (a) under section 209A or section 212 underestimated the advance tax payable by him and thereby reduced the amount payable in either of the first two instalments;....." Section 215 of the Act provides that 15 per cent. interest shall be leviable for the period during which the demand was deficient on the difference between the amount paid and the amount which should have been paid having regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Sanitary Ware and Industries Ltd. [1989] 180 ITR 21, it has been held by the Calcutta High Court that levy of interest under section 216 is not obligatory, rather it is discretionary. Unless there is a finding regarding default of the assessee, interest cannot be charged under section 216 of the Act. In Chief Commissioner (Admn.) v. Mysore Minerals Ltd. [1992] 197 ITR 572, the Karnataka High Court held that in the absence of any finding given by the assessing authority of underestimation, which is a jurisdictional fact, to attract section 216 of the Act, the interest cannot be levied. In CIT v. Pure Beverages Ltd. [1995] 214 ITR 57, the Gujarat High Court has held that where the assessee's sales were much lower than in the previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h case, if the Income-tax Officer finds an underestimation or deferment of payment of advance tax, he will have to hold an inquiry and find out whether the underestimation was done by the assessee with a view to reduce the amount of advance tax payable, or he had wrongly and deliberately deferred payment of advance tax..." Thus from the above, it becomes clear that the underestimation in itself may not be sufficient to attract the provisions of section 216 of the Act for levying the interest if there had been bona fide mistake on his part while making the underestimation. The learned Income-tax Appellate Tribunal is the final court of findings of fact. In the instant case, the Tribunal has considered every aspect of the matter including t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored...." Thus before this court, Shri Gulati could not furnish any explanation for the difference of Rs. 48 lakhs in the first return and in the revised return, and thus, the assessee miserably failed to furnish any satisfactory explanation for this unexpected increase in the income to the extent of Rs. 48 lakhs, and that being a question of fact recorded by the Tribunal in the absence of any satisfactory explanation by the assessee, we are of the view that the Tribunal has rightly recorded the said finding setting aside the order passed by the appellate authority. Thus, in view of the above, we are of the opinion that the Tribunal was justified in law in sustaining the levy of interest under section 216 of the Act. Accordingly, we answ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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