(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal (“the Tribunal” for short) dated 10.9.1999. For the assessment year 1988-89, at the time of admission of the appeal, following substantial question of law was framed :
“That the Appellate Tribunal has erred in law and on facts in deleting the interest charged under section 217(1A) of the Act.”
2. The issue pertains to charging of interest under section 217(1A) of the Income Tax Act, 1961 (“the Act” for short). The Assessing Officer while framing assessment noticed that the assessee had not sent the estimate for the purpose of advance tax though required and accordingly, directed collection of interest under section 217(1A) of the Act. The assessee carried the matter in appeal. The Commissioner (Appeals) deleted such interest relying on the decision of this Court in case of Commissioner of Income Tax, Gujarat-II v. Bharat Machinery and Hardware Mart, reported in (1982) 136 ITR 875. He observed as under :
“42. The Ground No.14 relating to charging of interest u/s.217(1A). It is submitted that in view of decision of Hon'ble Gujarat High Court in the case of Bharat Machinery and Hardware Mart, 136 ITR 875, interest u/s.217(1A) should not have been charged. On careful decision of the matter, I feel that income appeal became liable for interest on a/c. of unforeseen loans in view of decision of Hon'ble Gujarat High Court in the above case, interest u/s.217(1A) is not chargeable and accordingly, the assessing officer is directed to not charge interest u/s.217(1A).”
3. Revenue carried the issue in appeal before the Tribunal. The Tribunal by the impugned judgment, confirmed the commissioner's view making following observations :
“18. The next ground relates to charging of interest u/s. 217 of the Act. In para 42 of the appellate order, the ld. CIT (A) has directed the A.O. not to charge interest u/s. 217(1A). He has followed the decision of the Hon'ble Gujarat High Court in the case of Bharat Machinery and Hardware Mart (136 ITR 875). The Revenue has objected to this direction. However, we are unable to sustain this ground of appeal in favour of the Revenue in view of the clear pronouncement of the jurisdictional High Court on the issue.”
4. Having heard the learned counsel for the revenue, we notice that the facts have been recorded by the Commissioner and the Tribunal briefly. However, nothing is produced by the revenue to dislodge the briefly recorded facts by the Commissioner and the Tribunal.
5. We notice that the Division Bench of this Court in case of Bharat Machinery and Hardware Mart (supra) held that when there is a difference between the returned income and the assessed income due to Income Tax Officer making estimation under section 145(2) of the Act, levy of interest for failure to send estimate of advance tax would not be permissible.
6. Since the revenue is unable to point out that such ratio is not applicable in the present case, we answer the question in the negative, i.e. against the revenue and in favour of the respondent-assessee. Tax Appeal is dismissed.
[AKIL KURESHI, J.] [HARSHA DEVANI, J.] parmar*