9911796707
TMI Blog1977 (3) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the discretion in the assessee's favour. The contentions which have been taken before us by the Department are two fold. The first contention is that the levy of interest under s. 216 is not discretionary as has been held by the Appellate Assistant Commissioner but is mandatory. It is submitted that the expression 'may' which has been used in that section is to be construed as 'shall' and in that view of the matter, there can be no question of the Income Tax Officer exercising any discretion. secondly it is urged that as the estimate u/s. 212 (1) was filed in the last month of the accounting year there was no reason why the assessee could not have framed a more accurate estimate of its income. The assessee, on the other hand, has relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Officer's discretion which should be judicially exercised,. If the assessee satisfies the Income Tax Officer that there were reasonable grounds supported by facts and circumstances for his making low estimates for the first three instalments or for deferring the payment of tax on a part of his income and there was no wrong deferment no penal interest should be charged." The only aspect which we therefore have to see is whether the facts of the case were such as to justify the exercise of the discretion in the assessee's favour. In this connection reference may usefully be made to the assessee letter dt 14th October, 1972 addressed to the Income Tax Officer. The shortfall in its estimate was explained in the said letter as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner disposed of this claim in the following terms:- "xx In the above circumstances the Income Tax Officer is directed to give deduction for the sum of Rs. 5.86 lacs for the asst. year 1973-74 in case it is held later that the sum is not admissible for the asst. year 1972-73 It will thus be seen that the Appellate Assistant Commissioner has not given a blanket direction for the deduction of the amount as the Departmental ground would tend to a suggest. All that he has held is that in the event of the Tribunal's decision for the asst. year 1972-73 being reversed, the allowance should then be given in the assessment year under appeal (i.e. 1973-74). The ground set out in the memo of appeal is thus not happily worded. Be that as it may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner for the allowance of the amount in the assessment year 1973-74 is accordingly hereby withdrawn, and the ground pertaining to this item is allowed to this extent. 5. The third ground is against the direction of the Appellate Assistant Commissioner for the allowance of a sum of Rs. 13,965 being the commission payable to Kirloskar Electric Co. It is not in dispute that by virtue of the agreement between the parties, the said commission of Rs. 13,965 became payable during the accounting year. What the Department contends, however, is that the necessary provision having not been made in the accounts the deduction cannot be allowed even though the accountsof the assessee are maintained an on the mercantile system of accounting. The Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate, when received, disclosed the actual liability at Rs. 4,82,8000 on these facts, the question before us is whether the authorities below were justified in disallowing a sum of Rs. 17,200 being the excess of the provisions as made in the books over the provision as required in the terms of the actuarial valuation. Having heard the parties we are of the opinion that the disallowance is not justified. In the first place s. 36 (1)(v) no where stipulates that the contribution to an approved Gratuity Fund are necessarily to be regulated by actuarial valuation. Indeed, in the first few years of the existence of the assessee's Gratuity Fund the contributions were being made by the assessee without reference to an actuary and such contri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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