Judgment :- 1. At the instance of the Revenue, the Income Tax Appellate Tribunal, Cochin Bench has referred the following two questions of law for the decision of this Court under S.256(2) of the Income Tax Act: 1. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal is right - i) in cancelling the order of the Income Tax Officer levying interest under S.216; ii) in holding that (a) the assessee has taken reasonable care in preparing the basis for estimate and the basis so prepared is a well informed guess work; (b) it is a bona fide estimate and it cannot be called an under estimate prepared deliberately; 2. Whether, on the facts and in the circumstances of the case and also in view of the finding by the Income Tax Officer that 'the assessee had deliberately under-estimated their liability to advance tax at' nil' should not the Tribunal have sustained the order of the officer/ remitted the case to the officer for denovo consideration?" 2. The respondent is a public limited company. We are concerned with the assessment year 1977-78. The accounting period ended on 31-12-1976. The controversy in this case is whether the assessee under-estimated the advance tax payable by it, which resulted in non-payment of the first two instalments, on 15-6-1976 and 15-9-1976. During the relevant accounting year, advance tax was payable under S.211(1) of the Income Tax, 1961 as it stood then. The latest assessed year of the assessee was 1973-74. Based on the latest assessed year (1973-74), the Income Tax Officer served a notice on the assessee on 28-5-1976 and directed the assessee company to remit the advance tax of Rs.48,11,980/- in three instalments- on 15-6-1976,15-9-1976 and 15-12-1976.'The assessee-company filed an estimate on 15-6-1976. It stated that its liability is 'nil'. No advance tax was remitted. On 15-9-1976 (the second instalment date), the assessee remitted a sum of Rs.8,00,000/-. It did not submit an estimate. However, on 14-12-1976, the assessee company filed a second estimate showing that the advance tax payable is Rs.35,20,000/-. On the same date, the assessee sent a cheque to the assessing authority towards the liability, a sum of Rs.25,20,000/-. The assessment for the year 1977-78 was completed on 22-9-1980. It did not submit an estimate. However, on 14-12-1976, the assessee company filed a second estimate showing that the advance tax payable is Rs.35,20,000/-. On the same date, the assessee sent a cheque to the assessing authority towards the liability, a sum of Rs.25,20,000/-. The assessment for the year 1977-78 was completed on 22-9-1980. We are told that there was an appeal from the assessment order and the appellate order was given effect to by the officer, by order dated 16-3-1981. Either in the original assessment order or in the revised assessment order giving effect to the appellate order, no interest was charged under S.216 of the Income Tax Act, 1961. On 7-7-1981, the Income Tax Officer served a notice on the assessee to show cause why interest under S.216 should not be charged. It is seen that the assessee filed its objection thereto on 20-7-1981. The plea of the assessee was that it has remitted more than the tax that will be due for the year if certain rectifications were carried out. Repelling the plea of the assessee, the Income Tax Officer held that the assessee has deliberately under estimated its liability, and levied interest of Rs.98,560/- under S.216(1) of the Income Tax Act., For non-payment of advance tax due on 15-6-1976, an amount of Rs.61,600/- as interest was levied. For non-payment of advance tax and surcharge due on 15-9-1976, interest of Rs.36,960/- was levied. The above sums totalled to Rs.98,560/-. 3. In appeal, before the Appellate Commissioner, the assessee seems to have shown a manuscript calculation from its file, wherein the assessee estimated the profit for the half year and also contended that the company had some expansion programme during the year and a new plant went into production and that they anticipated some 'teething trouble' and it prepared a working sheet on 14-6-1976. The Commissioner of Income Tax (Appeals) declined to accept the above plea and held that the assessee had no reason for filing a low estimate and avoiding payment of tax payable on 15-6-1976 and 15-9-1976 by way of advance tax. The order passed by the Commissioner of Income Tax (Appeals) is Annexure B dated 12-10-1982. The order passed by the Income Tax Officer dated 27-7-1981 (Annexure A) was affirmed. The assessee took up the matter in appeal before the Income Tax Appellate Tribunal, Cochin Bench. The order passed by the Commissioner of Income Tax (Appeals) is Annexure B dated 12-10-1982. The order passed by the Income Tax Officer dated 27-7-1981 (Annexure A) was affirmed. The assessee took up the matter in appeal before the Income Tax Appellate Tribunal, Cochin Bench. By order dated 31-12-1984, the Income Tax Appellate Tribunal held that the assessee has reasonable care (?) in preparing the basis for the estimate and the basis so prepared is a well informed guess work. The Tribunal also held that the estimate prepared cannot be called an under-estimate or done deliberately' and in this view, the order passed by the Income Tax Officer levying interest under S.216 was cancelled. It is thereafter, at the instance of the Revenue and as directed by this Court in O.P.No.1152 of 1986, the Income Tax Appellate Tribunal has referred the two questions of law, formulated herein above, for the decision of this court. 4. We heard counsel for the Revenue, Mr.P.K.R. Menon, and also counsel for the respondent-assessee, Mr.P.R. Raman. 5. The arguments advanced before us covered a wide range. Suffice it to say, the way in which the Tribunal has disposed of the appeal, is most unsatisfactory. As to whether the assessee made a bona fide estimate and it cannot be called an under-estimate prepared deliberately, is a finding of fact. It is true that the Income Tax Appellate Tribunal, as a final fact finding authority, is competent to enter such a finding of fact. But it should be done fairly and in accordance with law. We are of the view that the argument of the counsel for the Revenue that different explanations were given at different stages by the assessee is well fortified, on the basis of the records before us. 6. The Income Tax Officer served a notice on the assessee on 7-7-1981. The assessee filed its objections thereto on 20-7-1981. Both these documents do not form part of the paper book. So, we have to proceed regarding the contents of the notice and the reply thereto filed by the assessee, as narrated in Annexure A order passed by the Income Tax Officer dated 27-7-1981. The only plea of the assessee was that the entire tax was paid before 15-12-1976. Before the first appellate authority, a new plea was put forward by the assessee. It was stated that the assessee expected increase in the production capacity. The only plea of the assessee was that the entire tax was paid before 15-12-1976. Before the first appellate authority, a new plea was put forward by the assessee. It was stated that the assessee expected increase in the production capacity. They had an expansion programme and a new plant went into production. The assessee anticipated some 'teething trouble' for the new factory and no profit was expected for that year. This was the reason for showing 'nil' in the estimate prepared on 14-6-1976. It is also seen that the assessee had shown a manuscript calculation regarding the profit before the Commissioner of Income Tax. The said manuscript calculation also does not form part of the paper book. The grounds of appeal preferred before the Commissioner of Income Tax also do not form part of the paper book. In second appeal before the Tribunal, the assessee had a different explanation. It is seen from para.4 of the order of the Tribunal that the assessee filed copies of the assessment order dated 22-9-1980, the revised assessment order dated 16-3-1981, the order passed by the Commissioner of Income Tax (Appeals) dated 27-7-81 and photostat copies of the workings of the estimate of advance tax payable for the assessment year 1977-78 prepared on 14-6-1976 and 13-9-1976. The plea made was that the estimate of advance lax was filed on 15-6-1976 based on the assessee's working results for five months upto 31-5-1976 and taking into account the unabsorbed depreciation and development rebate for the assessment years 1974-75,1975-76 and 1976-77 available for set off and a bona fide estimate was made. The Tribunal considered the working sheet prepared on 14-6-1976. It does not appear that these documents were tendered before the Tribunal as additional evidence in accordance with R.29 of the Appellate Tribunal Rules, 1963. No reason is stated for acceptance of these additional documents by the Tribunal. There is nothing on record to show whether these documents were produced before the Assessing Authority or before the first appellate authority at all. Be that as it may, the explanation offered before the Tribunal that the estimate was filed on 15-6-1976 on a bona fide working made on 14-6-1976 was a new plea. It does not appear to have been taken either before the assessing authority or before the first appellate authority. Be that as it may, the explanation offered before the Tribunal that the estimate was filed on 15-6-1976 on a bona fide working made on 14-6-1976 was a new plea. It does not appear to have been taken either before the assessing authority or before the first appellate authority. The first appellate authority, no doubt, referred to a manuscript calculation that was filed, in Para.5 of its order. But it is not clear whether the manuscript calculation is the one that is referred to by the Tribunal. We are stressing these aspects only to show that the plea put forward by the assessee before the Tribunal was a new one, based on fresh documents filed before the Tribunal for the first time. It is relying on the above said documents, the Tribunal accepted the plea of the assessee and held that the estimate made by the assessee was a bona fide one and it cannot be called an under-estimate prepared deliberately. For arriving at the said finding of fact, the Tribunal adverted to a plea which was taken before it for the first time. It was so done on the basis of the documents which were not before it in accordance with law. There is no material to show that the above documents were admitted as additional evidence in the appeal. No reason has been stated for receiving those documents at that stage. We do not find any one of the documents included in the paper book filed in this Court. In these state-of-affairs, it is difficult to say whether the finding arrived at by the Tribunal is valid, based on any material or in accordance with law. We may at once say that though the finding of the Tribunal that the under-estimate was one made bona fide, is a finding of fact, such a finding can be made only in accordance with law. However wide the powers of the Appellate Tribunal may be as a final fact finding authority, it has to discharge its functions only in accordance with law. If the finding of fact is entered in the wrong way, it will be unfair and unreasonable. It is trite law that doing what is right may still result in unfairness if it is done in the wrong way. 7. If the finding of fact is entered in the wrong way, it will be unfair and unreasonable. It is trite law that doing what is right may still result in unfairness if it is done in the wrong way. 7. We are of the view, on the basis of the materials placed before us, that it is not possible for this Court to answer the questions referred to this Court satisfactorily and properly. The documents, on the basis of which the Income Tax Officer passed the order, are not before us. The material that seems to have been placed before the first appellate authority is not before us. The materials placed before the Appellate Tribunal and relied on by it are also not before us. In short, the basic documents, on the basis of which all the three authorities have entered findings, do not form part of the paper book. In this case, the explanation given by the assessee seems to be different at different stages. Only a short summary of the same is found in the orders. We do not know the details, if any, in the explanations tendered. In these circumstances, we arc not in a position to answer the questions referred to us as required by law, in a satisfactory manner. Therefore, we decline to answer the questions referred to this Court by the Income Tax Appellate Tribunal. 8. We have already stated that the Appellate Tribunal has disposed of the appeal relying on a plea which was put forward before it for the first lime and on the basis of the documents produced before it for first time. It is not stated that the documents were admitted as additional evidence in the appeal. We are of the view that the Tribunal committed a serious error in adverting to and relying upon the documents, which were tendered before it for the first time, without admitting them as additional evidence in accordance with law. The procedure adopted by the Appellate Tribunal by relying upon fresh documents, without admitting them as additional evidence and without giving reasons, is grossly unfair and illegal. It is based on those documents, the Tribunal has entered a finding that the under-estimate made by the assessee is a bona fide one. We are of the view that the casual way in which the Tribunal has disposed of the appeal is illegal and unfair. It is based on those documents, the Tribunal has entered a finding that the under-estimate made by the assessee is a bona fide one. We are of the view that the casual way in which the Tribunal has disposed of the appeal is illegal and unfair. The order of the Tribunal is infirm and not in accordance with law. While declining to answer the questions referred to this Court, we direct the Income Tax Appellate Tribunal to restore the appeal - I.T.A. No.756 of 1982 - to its file and dispose of the same afresh, in accordance with law. Ordinarily, the Tribunal should dispose of the appeal only on the basis of materials on record and available before it and about which parties to the appeal - assessee and the Revenue - had notice or knowledge. This is an important aspect to be borne-in-mind, since any other approach will be unfair or arbitrary and also unreasonable. It is competent to the Tribunal to admit additional or new evidence in the appeal in accordance with law and for reasons stated. But the parties to the appeal should have fair and proper notice and opportunity in relation thereto. 'Adhocism' in that regard cannot be countenanced in law. We make this position clear. A copy of this judgment, under the signature of the Registrar and the seal of this Court, shall be forwarded to the Income Tax Appellate Tribunal, Cochin Bench, forthwith.