Judgment:
R.K. Abichandani, J.
1. Tribunal, Ahmedabad Bench 'B', has referred the following question at the instance of the direction issued by this Court for the opinion of this Court under Section 256(2) of the IT Act, 1961 :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest under Section 216 was rightly charged ?'
2. The matter pertains to the asst. yr, 1982-83 in respect of which the assessee had filed a return on 29th June, 1982, declaring a total income of Rs. 30,41,556. Revised return was filed by the assessee on 25th Nov., 1983, declaring an income of Rs. 28,95,923. The assesseecompany had filed estimate in Form No. 29 on 15th June, 1981, estimating its income at Rs. 21,06,000 after claiming set off in respect of business loss caused which was of Rs, 3,94,000. Advance tax payable was shown as Rs. 11,87,257. The assessee-company ought to have paid the tax in the instalment of Rs. 3,95,752 as per the estimate filed but it paid Rs. 3,76,961 on 28th Aug., 1981 and Rs. 3,76,961 on 4th Nov.,1981. In the revised estimate filed under Section 212(3A) filed on 15th Dec., 1981, the income was estimated at Rs, 31,00,000 and the advance tax payable was shown to be Rs. 17,90,250. The last instalment of Rs. 10,36,328 was paid by the assessee on 19th Dec., 1981. The assessee was, therefore, called upon to explain as to why interest under Section 216 should not be charged for underestimating advance tax payable in the first two instalments. The assessee replied to the show cause on 29th Sept., 1984, inter alia, contending that due to diverse factors it was impossible for an industry like the one of this company to estimate the income at a correct figure. The ITO did not find any substance in the explanation of the assessee and rejected the same by holding that the assessee had not produced any evidence to show that in the earlier quarters its sales were less and that the sales had shot up in the subsequent quarter. It was held that the assessee failed to prove with the help of any figures regarding sales, purchase, etc., that the estimate filed on 15th June, 1981, was based on any reasonable data. Interest was, therefore, ordered to be charged under Section 216 of the Act.
3. It is evident from the order of the ITO that after issuance of the show-cause notice to the assessee and taking into consideration their reply, the ITO came to a finding that the assessee had underestimated the income in the first two quarters without there being any reasonable ground. The appellate authority confirmed the said order of the ITO.
4. The only contention that was raised on behalf of the assessee before us was that in view of the decision of this Court in CIT v. Nagri Mills Ltd. : [1987]166ITR292(Guj) interest cannot be levied under Section 216 of the IT Act unless the ITO finds that the assessee had underestimated the advance tax payable by it.
5. It is clear from the order of the ITO that copious reasons are given by the ITO for holding that the interest was leviable under Section 216 of the IT Act on the ground that the assessee had underestimated advance tax payable by it and had not given any satisfactory explanation for underestimating advance tax payable by it. In this view of the matter, we are of the opinion that the Tribunal was right in holding that the interest under Section 216 was rightly charged. The question referred to us is, therefore, answered in affirmative against the assessee and in favour of the Revenue. The reference stands disposed of accordingly with no order as to costs.