STEELSWORTH PRIVATE LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under S. 256(1) of the IT Act, 1961 (for short "the Act"), the following question has been referred by the Tribunal, Guwahati, for opinion of this Court : "Whether, on the facts and circumstances of the case, the Tribunal had any material to hold that the assessee has underestimated advance tax payable and thereby reduced the amount payable in instalments for the year relevant to the asst. year 1975 -76 -

(2.) THE AO completed assessment for the year 1975 -76 and the AO passed order under S. 216 of the Act. According to him, the assessee filed an estimate of advance tax on 5th Sept., 1974, under s. 212(1) showing advance tax payable at Rs. 9,34,500. Thereafter, on 13th March, 1975, a revised estimate was filed under S. 212(2) indicating advance tax payable by the assessee at Rs. 23,20,500. The AO observed that the assessee reduced the amount payable in the earlier estimate and, therefore, the AO ordered for payment of interest under S. 216 by the assessee on the basis of the calculation given in the order itself. The interest was computed at Rs. 38,433. The assessee took up the matter before the CIT(A) and the CIT(A) held that the assessee was vigilant that his estimate of advance tax should be commensurate with the expectation of income and tax thereon. The CIT(A) after considering all the aspects of the matter came to the conclusion that the assessee could not be accused of deliberately underestimating his advance income and deliberately paying underestimate advance tax, therefore, the assessee could not be directed to pay interest under s. 216 of the Act.

(3.) THE Revenue preferred an appeal before the Tribunal against the order passed by the CIT(A). The assessee did not file any cross appeal. The appeal was heard along with other appeals filed by the Revenue in respect of the assessment of other years. The Tribunal passed a consolidated order on 20th May, 1988. The Tribunal came to the conclusion that the assessee knew that the advance tax payable for the year was more than that payable during the earlier assessment year, inasmuch as, by the end of December, 1973, the sales had gone up to Rs. 1,47,79,902 whereas, the sale up to December, 1974, was only Rs. 1,58,99,329 and, therefore, there was a difference of about Rs. 10 lakhs for which no revised estimate was filed in December, 1974. Accordingly, the Tribunal did not agree with the conclusion arrived at by the CIT(A). It was of the opinion that the assessee had underestimated the advance tax payable and thereby reduced the amount payable in instalments. The order of the CIT(A) was, therefore, revised by restoring the order passed by the AO. Thereafter, the assessee filed a Miscellaneous Application (M.P. No. 5 (Fauhati) of 1988, dt. 22nd Aug., 1988) stating, inter alia that certain submissions of the assessee were not recorded in the judgment of the Tribunal which according to the assessee constituted an apparent mistake. The assessee, therefore, prayed for necessary orders. However, the Tribunal while disposing of the said miscellaneous application on 22nd Feb., 1989, observed that there was no mistake apparent from record and rejected the application. Though the assessee filed an application under S. 256(1) of the Act to refer three questions later on the assessee prayed for amendment and submitted revised questions. The Tribunal, however, referred only one question as referred to above, for opinion of this Court.