These cross appeals by revenue and assessee are directed against order of CIT(A), IX, New Delhi dated 24-1-1985 relating to assessment year 1975-76. By this order, ld. CIT(A) reduced quantum of penalty from Rs. 12,90,800 levied by Income-tax Officer u/s. 273(a) of Income- tax Act, 1961 by his order dated 21-9-1984 to Rs. 7,74,470. reduction is on account of impugned penalty being reduced from 25 per cent of shortfall of tax to 15 per cent thereof by ld. CIT(A). This action of his has left both parties aggrieved. Hence, present cross appeals before us. 2. Before us, arguments were opened by revenue, through Shri B.D. Sinha. It was submitted that Income-tax Officer issued to assessee notice u/s. 210 of Act because assessee was existing assessee. This notice was served upon assessee on 30th May, 1974. This notice took into consideration previously assessed total income of Rs. 2,53,10,000 and, therefore, demanded tax thereon amounting to Rs. 1,43,47,719 in three equal instalments payable on or before 15-6-1974, 15-9-1974 and 15-12-1974. It w s submitted on behalf of revenue that instead of paying tax in accordance with this notice served upon assessee assessee filed estimate of its total income and tax payable thereon u/s. 212. This estimate was filed for first time on 13-6-1974. In this estimate, total income was taken as nil and consequently, tax payable also was shown as nil. 3. Thereafter, assessee filed, it was contended, revised estimate on 7-9-1974. In this estimate, total income was taken at Rs. 3,11,31,000. tax payable thereon was estimated at Rs. 1,79,78,000. As per this estimate this tax of Rs. 1,79,78,000 was payable in two equal instalments of Rs. 89,89,000. assessee rounded off payment from this figure to Rs. 90 lakhs and paid same on 13-9-1974. 4. Thereafter assessee filed third estimate on 13-12-1974, in which income was estimated at Rs. 1,76,92,000 and tax payable was worked out at Rs. 1,00,59,000. assessee had paid on 13-9-1974 sum of Rs. 90 lakhs as stated earlier. Therefore, balance of tax payable, i.e. (Rs. 1,00,59,000-Rs. 90,00,000), Rs. 10,59,000 was paid on 16-12-74. 5. It was contended by ld. D.R. that assessment was framed on substantially higher total income than total income shown in estimate filed by assessee on 13-12-74. Finally, after giving appeal effect for first time to order of Tribunal, total income came to Rs. 3,55,82,700 as per order dated 24-8-1984. tax payable shown came to Rs. 2,02,96,173. Thus, it would be seen that both figures of estimated total income and tax payable thereon, it was contended, were understated by assessee. ITO, therefore, issued notice to assessee to show cause why penalty need not be levied u/s. 273(a) for filing estimate of total income and tax payable thereon, which assessee knew or had reason to believe to be untrue. In response to this notice, assessee made written submissions before ITO. After taking into consideration explanation tendered by assessee, ITO proceeded to levy impugned penalty of Rs. 12,90,800 on facts and in circumstances of case, he held that estimate filed by assessee on 13-12-74 was to knowledge of assessee untrue. It was contended by ld. D.R. that ITO has given reasons in impugned penalty order why he came to such conclusion. It was pointed out to us that particularly it was clear that assessee had deliberately underestimated income on basis of certain projections for last two months and bad also taken into consideration expenditure to tune of Rs. 43 lakhs incurred on scientific research wrongly into estimate of total income and tax payable in mala fide manner. 6. In support of his arguments, it was projected that assessee made substantial payments u/s. 140A as indicated in impugned penalty order. These payments are Rs. 70 lakhs paid on 30-10-1975 and Rs. 51,31,784 paid on 14-11-1975. It was, thus, emphasised that very factum of payment of Rs. 1,21,31,784 by assessee, it is shown that estimate filed by assessee on 13-12-1974 on basis of which tax payable was shown at mere figure of Rs. 1,00,59,000 establishes mala fide of assessee and justifies imposition of penalty of 25 per cent of shortfall. It was, thus, contended that ld. CIT(A) erred in tinkering with order of ITO and reducing penalty as he did. 7. Particularly attacking order of ld. CIT(A) on ground of taking into consideration quantum of interest levied u/s. 215 of Act in reducing into consideration quantum of interest levied u/s. 215 of Act in reducing penalty, ld. D.R. contended that decision of ld. CIT(A) is contrary to law laid down by Supreme Court in case of Gursahai Seigal v. CIT [1963] 48 ITR 1. 8. It was contended that mere fact that there was wide variation between income finally assessed and income declared in estimate filed on 13-12-1974 should be, in view of ratio decidendi, of Allahabad High Court judgment in case of CIT v. U.P. Tannery Co. (P.) Ltd. [1977] 107 ITR 842 should be sufficient to hold that or to raise assumption that estimate filed by assessee on 13-12-1974 was to knowledge of assessee untrue. Therefore, penalty should not have been reduced by ld. CIT(A) in manner he did. 9. It was further contended that it is not for ITO necessarily to prove that estimate filed by assessee was false or untrue because there lies burden upon assessee to justify estimate as true and correct as held in case of Gurdas Ram & Co. v. ITO [1986] 19 ITD 415 (Delhi). It was, thus, contended that if entirety of facts and circumstances is taken into, consideration, it is clear case of penalty leviable u/s. 273(a). ld. CIT(A), therefore, erred in reducing quantum of penalty levied by ITO. His order be reversed and that of ITO restored in its place. 10. On other hand, learned counsel for assessee submitted that authorities below have from very beginning levied and confirmed penalty on misunderstanding of relevant provisions of law. It was submitted that if assessee has been served with notice u/s. 210 then penalty cannot be levied with reference to total income assessed and tax thereon and income estimated and advance tax payable thereon in estimate filed by assessee. Not conceding that penalty is imposable, learned counsel for assessee, for sake of argument, submitted that, penalty if at all is to be levied it should be calculated in accordance with provisions of sec. 273(i)(2) of Act. This provides computation of penalty in case of default u/s. 273(a), i.e., where estimate of advance tax payable by assessee is filed, which he knew or had reason to believe to be untrue. According to these provisions, in such case, ITO may direct that such person shall, in addition to amount of tax, if any, payable by him, pay by way of penalty sum-(i) which in case referred to in clause (a), shall not be less than 10 per cent, but shall not exceed 1-1/2 times amount by which tax actually paid during financial year immediately preceding tile asstt. year under provisions of Chapter 12C when falls short of--(1) 75 per cent of tax determined on regular assessment and modified under provisions of sub- sec. (5) of sec. 215, or (2) where notice u/s. 210 was issued to assessee, amount payable thereunder, whichever is less. 11. It was submitted that though neither before ITO nor before CIT(A), matter was projected in this legal aspect, yet, fact being already on record and there being no necessity for enquiry on facts, this legal issue can be considered at this stage without difficulty. 12. Proceeding to support his submissions that penalty is not leviable on assessee on merits he submitted that ITO has himself considered that first and second estimates filed on 13-6-1974 and 7-9-1974 were such that no allegation could be fastened upon assessee of type that, is necessary for invoking provisions of sec. 273(a), i.e., knowledge of assessee that estimate of total income and advance tax payable was such that he could have reason to believe it to be false or untrue. Coming to details of these estimates, learned counsel for assessee projected that he had placed before authorities below full facts as to how estimates came to be made by to assessee. In this regard, he thought fit to compare figures taken by assessee in two estimates one filed on 7-9-1974 and other filed on 13-12-1974. He stated that he would like to take these figures because estimate filed on 7-9-1974 had been considered as bona fide and bona fides of assessee bad been questioned on basis of estimate filed on 13-12- 1974. Taking figures in estimates filed on 5-9-1974, it was projected to us that assessee had shown estimated gross profit for year at Rs. 9,77,22,000 and had, thereafter, taken deductions like development rebate and capital expenditure on scientific research including claims u/ss. 80J and 80G of Act. details projected to us from page 8 of paper book, which was before authorities below indicated these figures and in light of these details and figures he brought to our notice computation of total income details and figures he brought to our notice computation of total income and tax payable made for purpose of filing estimate' on 13-12-1974. These figures appear at pages 18 and 19. Referring to these pages, it was emphasised that assessee had proceeded to estimate total income and tax payable thereon in same manner and with same method as adopted in earlier two estimates but with difference that in three units run by assessee, namely, Fibretek Engg. Division at Dadri near Ghaziabad, Nimba Hira Cement Division and Syntex Tube Works, Kanpur losses had been noticed. assessee, therefore, took those losses into consideration and since, previous year of assessee, which ends on 31st December had already run its course of 10 months, assessee projected figures for remaining two months and filed estimate. estimate filed, thus, took into consideration, projections of two months and actuals of 10 months. development rebate in estimate filed on 13-12-1974 was. taken at Rs. 1,40,00,000 as against Rs. 91,11,000 and capital expenditure on scientific research was again taken at same figure of. Rs. 43 lakhs in estimate filed on 17-9-1974. It was, thus, submitted that these were mere bona fide projections and taking into consideration track record of assessee such calculations made bona fide were never questioned. It was submitted that even penalty levied u/s. 271(1)(c) was cancelled. Therefore, learned CIT(A) erred in retaining quantum of penalty that he did. Since, there is no case for imposition of penalty upon assessee, entire penalties should have been cancelled. 13. Availing of right of rejoinder in his own appeal, learned D.R. submitted that argument of learned counsel for assessee that assessee took into consideration projections of last two months as incongruous in sense that estimate itself was filed on 13-12-1974 whereas previous year of assessee ended on 31-12-1974 and by time estimate was filed assessee should be aware of figures practically of whole accounting period, and it was also argued that deductions, which assessee had taken into consideration were also considered while filing return and still there was wide variation of course between total income returned and estimate filed on 13-12-1974. 14. learned counsel for assessee availing of rejoinder for his own appeal submitted that due to far flung established businesses of assessee, figures for computing total income and tax payable are called much in advance than imagined by learned D.R. and, therefore, figures taken for computing estimate of total income and tax payable in advance as per estimate filed on 13-12-1974 were figures for period of 10 months. penalty retained by learned CIT(A) may, therefore, be cancelled. 15. We have given careful consideration to rival submissions. Before we come to purely legal aspect about computation of penalty imposable u/s. 273(a) projected to us by ld. counsel for assessee, we proceed to determine issue on merits. When we do so, we find that estimates filed by assessee of its total income and tax payable in advance on 13-6-1974 and 7-9-1974 were accepted by Income-tax Officer to be of type which assessee knew not or did not have reason to believe to be untrue. In other words, two estimates have been accepted as bona fides and reflecting true and correct position of state of affairs of business of assessee from which figures for filing estimates had to be culled out. ITO has, however, levied penalty for estimate filed on 13-12-1974. We have, therefore, to examine whether figures taken for purpose of estimating total income and tax payable thereon were such that assessee could have had knowledge or had reason to believe to be untrue. We find that ITO issued notice u/s. 210 on basis of last assessed income at Rs. 2,53,10,000. assessee, however, did not pay any tax on that basis and as is narrated (supra) filed estimates of income and tax payable thereon three times. We find that total income estimated in estimate filed on 13-12-1974 is Rs. 1,76,92,000 and tax payable thereon at Rs. 1,00,59,000. But before this estimate was filed, assessee had paid Rs. 90 lakhs on 30-9-1974 on basis of estimate filed on 7-9-1974. Thus, taking into consideration, total income estimated in estimate filed on 13-12-1974, balance tax payable was only Rs. 10,59,000. This was paid on 16-12-1974. 16. According to assessment made u/s. 143(3) read with section 144B on 23-9-1978, total income assessed was Rs. 5,74,87,440. This assessment of course was challenged in appeal with result that after giving appeal effect of course was challenged in appeal with result that after giving appeal effect to Tribunal's order dated 24-8-1984, income assessed was such that assessed tax came to Rs. 2,02,96,173. Since assessee had paid advance tax only to extent of Rs. 1,00,59,000 it had to pay self-assessment tax u/s. 140A of Act amounting to Rs. 1,21,31,754. In narrative part of this order, on facts above while recording arguments of parties, dates of payment of this have been recorded. Thus, we find that last assessed income on basis of which ITO issued notice u/s. 210 on 30th May, 1974 was Rs. 2,53,10,000 and finally assessed income for year under appeal was so. much higher that finally assessed tax came to Rs. 2,02,96,173. 17. estimate filed by assessee on 13-12-1974 shows that assessee examined various claims made in estimate fled on 7-9-1974. For example, claim for development rebate in estimate made on 7-9-1974 was Rs. 91,11,000, whereas claim for development rebate was at Rs. 1,40,00,000 in estimate made on 13-12-1974. There is also minor variation upwards in claim of depreciation in so far as figure goes up from Rs. 3,82,79,000 to Rs. 3,87,00,000. However, we find that figure of capital expenditure for scientific research has been maintained in both estimates at Rs. 43 lakhs. Before Income-tax Officer as well as before ld. CIT(A) assessee was unable to establish as to why this figure of Rs. 43 lakhs firstly taken and secondly sustained in estimate filed on 13-12-1974 had been kept same when actual expenditure was less in assessment framed Income-tax Officer allowed actual expenditure of Rs. 12,81,972. Before us except for claiming that it was estimate of scientific research expenditure no reason has been given why when last estimate was framed on 13-12-1974, towards end of accounting period of assessee, this figure of Rs. 43 lakhs was retained as debit in working out total income on which advance tax was to be paid. Therefore, in our considered opinion, authorities below have rightly projected this aspect as going against assessee in determining correctness of estimate being bona fide or not as filed on 13- 12-1974. 18. ITO in his impugned penalty order dated 21-9-1984 has further projected that assessee estimated profit for period from 1-1-1974 to 31-10-1974 at Rs. 8,50,000. estimate for remaining two months was, however, made at Rs. 75 lakhs only. According to ITO, assessee reduced profits for these two months from Rs. 1,70,00,000 to Rs. 75 lakhs by working out averages. He has recorded clearly in impugned penalty order that this assessee could not justify on basis of material evidence during course of penalty proceedings. 19. We find that there was hardly any justification for reducing estimated profits for these two months because apparently despite losses in three units to which ld. counsel for, assessee has adverted to in his arguments and submissions before us, assessee was earning taxable income more than Income last assessed and these losses had been taken into consideration. Before us, except for arguments given. before ITO, copies of computation on basis of which estimates were filed, assessee has not placed any evidence from which it could be gathered whether estimate of income for last two months was such that it could not be said that assessee could not have knowledge or reason to believe it to be untrue. This is part of estimate filed on 13-12-1974 and to great extent is responsible for making that estimate such that could give ITO in course of regular assessment proceedings satisfaction that assessee had knowledge or had reason to believe that estimate filed on 13-12-1974 was untrue. 20. On very careful assessment of relevant evidence and contentions of parties, we have come to conclusion that penalty u/s. 273(a) is leviable upon assessee because in our considered opinion, estimate filed by assessee on 13-12-1974 was such that assessee had knowledge or had reason to believe it to be untrue. question, therefore, is as to what should be quantum of penalty leviable. In this regard, we have to consider legal issue raised on behalf of assessee by its learned counsel. According to him, in working out penalty imposable, ITO has omitted to consider provisions of section 273(1)(a)(i)(2) of Act. This can be done by finding out amount, which would have been payable by way of advance tax if assessee had furnished correct and complete statement in accordance with provisions of clause (a) of sub- section (1) of section 209A, accordance with provisions of clause (a) of sub- section (1) of section 209A, of Act. Now, this to our mind requires investigation on facts. This issue was not raised before authorities below. Therefore, at this stage, we reject this contention outright, as without investigation of facts, it cannot be decided and having not been raised earlier, assessee is not entitled to do so at this stage. 21. Considering entirety of facts and circumstances of case and each of reasons that we have assigned supra for holding that penalty is imposable. We are of opinion that penalty at rate of 15 per cent of shortfall is justified. ld. CIT(A) has retained penalty on Rs. 7,74,470 which comes to 15 per cent of shortfall. In doing so, he has, of course, given different reasons. However, for reasons that we have assigned supra, we uphold this quantum of penalty as imposable upon assessee u/s. 273(a) of Act. 22. In view of what is stated above, we find that appeal of revenue as well as of assessee has to be dismissed. 23. Appeals dismissed. *** INCOME TAX OFFICER v. J. K. SYNTHETICS LTD.