9911796707
TMI Blog1986 (7) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act, 1961, was not chargeable ? " The Income-tax Officer framed an assessment by his order dated February 26, 1982, and directed charging of interest under sections 215 and 216 of the Act. In this application, we are concerned only with the interest charged under section 216 of the Act. While giving direction to charge interest under section 216, the Income-tax Officer did not record a finding that the assessee had underestimated the advance tax payable by it and thereby reduced the amount payable in either of the first two instalments. It is the case of the Revenue that the assessee had become liable to pay interest under section 216 as it had underestimated the advance tax payable by it. The assessee, being aggrieved by the direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Andhra Pradesh High Court in the case of Addl. CIT v. Vazir Sultan Tobacco Company Ltd. [1980] 122 ITR 251, further held that where the underestimate of advance tax is because of underestimation of income, the provisions of section 216 are not attracted. In the result, the Tribunal directed the Income-tax Officer to delete the interest levied under section 216 of the Act. The Revenue, being dissatisfied with the view taken by the Tribunal, applied to the Tribunal to refer to this court the question set out above for its opinion under section 256(1) of the Act. The Tribunal, however, declined to refer the question because a finding in respect of levy of interest under section 216 was " lacking ". The Revenue has, therefore, approached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce tax payable by it. It is submitted that under the circumstances, the question of law which arises is whether it was necessary for the Income-tax Officer to record a specific finding that the assessee had underestimated the advance tax payable by it, and if he failed to do so, no interest under section 216 was leviable. It is, therefore, submitted that the Tribunal ought to have referred the question set out above for the opinion of this court under section 256(1) of the Act. On a plain reading of section 216, it is clear that interest could not have been levied under that section unless the Income-tax Officer found that the assessee had underestimated the advance tax payable by him. The finding that there was underestimate of the adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest under section 216 is appealable under section 246(m). How would the appellate authority be able to determine whether or not interest levied under section 216 is correctly levied unless a finding as required under section 216 is recorded by the Income-tax Officer ? The Income-tax Officer is therefore also required to record such finding which is backed by reasons. What he is required to find is that the assessee had underestimated the advance tax payable by it. The term " underestimate " indicates that he must find that the assessee had made too low an estimate. The estimate can be said to be an " underestimate " if it is deliberate or intentional. There has to be lack of bona fides on the part of the assessee. The finding of underest ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
