Income Tax Officer,S.K.Ward-2,Himatnagar, Himatnagar V. Shri Dushyant Manilal Pandya, Sabarkantha

ITA 1979/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0866 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-03-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 01-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 271(1)(c); 92B; 274

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./I.T.A. NO. 1979/AHD/2017 ( / ASSESSMENT YEAR: 2012-13) ITO SABARKANTHA WARD-2, HIMATNAGAR, DIST: SABARKANTHA-383001 / VS. SHRI DUSHYANT MANILAL PANDYA 1, ARVALI SOCIETY, NR. PARAS KEROSIN PUMP, VALASANA ROAD, AT-IDAR, DIST. SABARKANTHA- 383230 ./ ./PAN/GIR NO. : AKO PP5 443 N ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI TEJ SHAH, AR / RESPONDENT BY: SHRI DILEEP KUMAR, SR. DR !' /DATE OF HEARING 02/03/2020 #$!' / DATE OF PRONOUNCEMENT 08/06/2020 %& /O R D E R PER MS. MADHUMITA ROY - JM: THE APPEAL FILED BY THE REVENUE FOR A.Y. 2025-13, ARISING OUT OF ORDER OF THE CIT(A)-2, AHMEDABAD DATED 13.06.2017, IN THE PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN S HORT THE ACT. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE PENALTY OF RS. 50,21,210/- U/S. 271(1)(C) OF THE AC T LEVIED BY THE ASSESSING OFFICER. 1.1 THAT THE LD. CIT(A)S ORDER IS PERVERSE SINCE HE HA S OBSERVED THAT THE IMPUGNED PENALTY HAD BEEN INITIATED FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, WHEN THE FACT IS THAT THE AO IN ITA NO. 1979/AHD/2017 [ITO VS. SHRI DUSHYANT MANILAL PANDYA] A.Y. 2012-13 2 THE ASSESSMENT ORDER HAS CLEARLY STATED THAT THE PE NALTY U/S. 271(1)(C) OF THE ACT WAS INITIATED FOR FURNISHING INACCURATE PARTICULARS. 1.2 THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT R EFERENCE IN THIS REGARD IS DECISION, THE HONBLE BOMBAY HIGH COURT I N THE CASE OF CIT VS. SMT. KAUSHALYA AND OTHERS WHICH WAS FOLLOWED BY THE HONBLE ITAT IN THE CASE OF EARTHMOVING EQUIPMENTS SERVICE CORPORATION VS. DCIT [ITA NO. 6617/MUM/2014 DATED 02.05.2017] WHERE IN IT WAS HELD THAT MERE NON-STRIKING OF THE CHARGE OF INITIA TION OF PENALTY IN THE 274 NOTICE DOES OT RENDER THE PENALTY PROCEEDIN GS VOID IF THE ASSESSMENT ORDER SHOWS THE DUE APPLICATION OF MIND. 1.3 THE LD. CIT(A) HAS ALSO FAILED TO APPRECIATE THAT D ISMISSAL OF THE SLP BY THE HONBLE KARNATAKA HC IN THE CASE OF SSAS EM ERALD MEADOWS DOES NOT MEAN THAT IT IS A DECISION OF THE HONBLE SC OR THAT THE SAID ORDER OF THE HONBLE KARNATAKA HIGH COURT HAS MERGE D WITH THE ORDER OF THE HONBLE SC. 1.4 THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT T HE NOTICE U/S. 271(1)(C) R.W.S. 274 IS JUST A SHOW CAUSE NOTICE AN D ANY MISTAKE/OMISSION THEREIN IS CURABLE UNDER SECTION 2 92B OF THE ACT. 2. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ORDER U/S. 271(1)(C) OF THE ACT HAS BEEN PASSED FOR FURNISHING OF INACCU RATE PARTICULARS. THE MERE FACT THAT THE AO HAS ALSO ADDED SOME MORE WORD S TO THAT FINDING WOULD NOT ALTER THAT FACT. 3. AT THE TIME OF HEARING OF THE APPEAL, IT WAS SUB MITTED BY THE LD.AR FOR THE ASSESSEE THAT APPEAL FILED BY THE REV ENUE IS HIT BY RECENTLY ISSUED CBDT CIRCULAR NO.17 OF 2019 DATED 0 8/08/2019 REVISING THE PREVIOUS THRESHOLDS PERTAINING TO TAX EFFECTS. AS PER AFORESAID CIRCULAR, ALL PENDING APPEALS FILED BY RE VENUE ARE LIABLE TO BE DISMISSED AS A MEASURE FOR REDUCING LITIGATIO N WHERE THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMI T WHICH IS NOW REVISED AT RS.50 LAKHS. IN THE INSTANT CASE, THE T AX EFFECT ON THE DISPUTED ISSUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.50 LAKHS AND THEREFORE APPEAL OF THE REVENUE IS REQUIRED TO BE DISMISSED IN LIMINE . 4. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED T HE APPLICABILITY OF THE CBDT CIRCULAR NO. 17 OF 2019. ACCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINA BLE. HOWEVER, IT WILL BE OPEN TO THE REVENUE TO SEEK RESTORATION OF ITS APPEAL ON ITA NO. 1979/AHD/2017 [ITO VS. SHRI DUSHYANT MANILAL PANDYA] A.Y. 2012-13 3 SHOWING INAPPLICABILITY OF THE AFORESAID CBDT CIRCU LAR IN ANY MANNER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 6. BEFORE PARTING WE WOULD LIKE TO MAKE CERTAIN OBS ERVATION RELATING TO THE ISSUE CROPPED UP UNDER PRESENT SCENARIO OF COVID-19 PANDEMIC AS TO WHETHER WHEN THE HEARING OF THE MATTER WAS CONCLUDED ON 02. 03.2020 THE ORDER CAN BE PRONOUNCED TODAY I.E. ON 08.06.2020. THE ISSUE HAS ALREADY BEEN DISCUSSED BY THE CO-ORDINATE BENCH IN THE CASE OF DCIT VS. JSW L TD. (ITA NOS. 6264 & 6103/MUM/2018) PRONOUNCED ON 14.05.2020 IN THE LIGH T OF WHICH IT IS WELL WITHIN THE TIME LIMIT PERMITTED UNDER RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963 IN VIEW OF THE FOLLOWING OBSERVATIONS M ADE THEREIN: 7. HOWEVER, BEFORE WE PART WITH THE MATTER, WE MUS T DEAL WITH ONE PROCEDURAL ISSUE AS WELL. WHILE HEARING OF THESE A PPEALS WAS CONCLUDED ON 8TH JANUARY 2020, THIS ORDER THEREON IS BEING PRONOUNCE D TODAY ON THE DAY OF 14TH MAY, 2020, MUCH AFTER THE EXPIRY OF 90 DAYS FROM TH E DATE OF CONCLUSION OF HEARING. WE ARE ALSO ALIVE TO THE FACT THAT RULE 34 (5) OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1963, WHICH DEALS WITH PRO NOUNCEMENT OF ORDERS, PROVIDES AS FOLLOWS: (5) THE PRONOUNCEMENT MAY BE IN ANY OF THE FOLLOWIN G MANNERS : (A) THE BENCH MAY PRONOUNCE THE ORDER IM MEDIATELY UPON THE CONCLUSION OF THE HEARING. (B) IN CASE WHERE THE ORDER IS NOT PRONO UNCED IMMEDIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A DATE FOR PRONOUNCEM ENT. (C) IN A CASE WHERE NO DATE OF PRONOUNCE MENT IS GIVEN BY THE BENCH, EVERY ENDEAVOUR SHALL BE MADE BY THE BENCH TO PRONOUNCE THE ORDER W ITHIN 60 DAYS FROM THE DATE ON WHICH THE HEARING OF THE CASE WAS CONCLUDED BUT, WHERE IT IS NOT PRACTICABLE SO TO DO ON THE GROUND OF EXCEPTIONAL AND EXTRAORDINARY CIRCUMSTANCES OF THE CASE, THE BENCH SHALL FIX A FUTURE DAY FOR PRONOUNCEMENT OF THE ORDER, AND SUCH DATE SHALL NOT ORDINARILY (EMPHASIS SUPPLIED BY US ITA NO. 1979/AHD/2017 [ITO VS. SHRI DUSHYANT MANILAL PANDYA] A.Y. 2012-13 4 NOW) BE A DAY BEYOND A FURTHER PERIOD OF 30 DAYS AN D DUE NOTICE OF THE DAY SO FIXED SHALL BE GIVEN ON THE NOTICE BOARD. 8. QUITE CLEARLY, ORDINARILY THE ORDER ON AN APPE AL SHOULD BE PRONOUNCED BY THE BENCH WITHIN NO MORE THAN 90 DAYS FROM THE D ATE OF CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT TO NOTE THAT THE EXPRESSION ORDINARILY HAS BEEN USED IN THE SAID RULE ITSELF. THIS RULE WAS I NSERTED AS A RESULT OF DIRECTIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHIVSAGAR VEG RESTAURANT VS ACIT [(2009) 317 ITR 433 (BOM)] WHEREIN THEIR LORDS HIPS HAD, INTER ALIA, DIRECTED THAT WE, THEREFORE, DIRECT THE PRESIDENT OF THE APPELLATE TRIBUNAL TO FRAME AND LAY DOWN THE GUIDELINES IN THE SIMILAR LI NES AS ARE LAID DOWN BY THE APEX COURT IN THE CASE OF ANIL RAI (SUPRA) AND TO I SSUE APPROPRIATE ADMINISTRATIVE DIRECTIONS TO ALL THE BENCHES OF THE TRIBUNAL IN THAT BEHALF. WE HOPE AND TRUST THAT SUITABLE GUIDELINES SHALL BE FR AMED AND ISSUED BY THE PRESIDENT OF THE APPELLATE TRIBUNAL WITHIN SHORTEST REASONABLE TIME AND FOLLOWED STRICTLY BY ALL THE BENCHES OF THE TRIBUNA L. IN THE MEANWHILE(EMPHASIS, BY UNDERLINING, SUPPLIED BY US NOW), ALL THE REVISI ONAL AND APPELLATE AUTHORITIES UNDER THE INCOME-TAX ACT ARE DIRECTED TO DECIDE MAT TERS HEARD BY THEM WITHIN A PERIOD OF THREE MONTHS FROM THE DATE CASE IS CLOSED FOR JUDGMENT. IN THE RULED SO FRAMED, AS A RESULT OF THESE DIRECTIONS, THE EXP RESSION ORDINARILY HAS BEEN INSERTED IN THE REQUIREMENT TO PRONOUNCE THE ORDER WITHIN A PERIOD OF 90 DAYS. THE QUESTION THEN ARISES WHETHER THE PASSING OF THI S ORDER, BEYOND NINETY DAYS, WAS NECESSITATED BY ANY EXTRAORDINARY CIRCUMSTANC ES. 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDIA T OOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PRE VENT SPREAD OF COVID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVEREL Y RESTRICTED ON ACCOUNT ITA NO. 1979/AHD/2017 [ITO VS. SHRI DUSHYANT MANILAL PANDYA] A.Y. 2012-13 5 OF LOCKDOWN BY THE MAHARASHTRA GOVERNMENT, AND ON A CCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHE CKING SPREAD OF COVID 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CAS E, THERE WAS UNPRECEDENTED DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF I NDIA, IN AN UNPRECEDENTED ORDER IN THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT O NLY THIS LOCKDOWN PERIOD BUT ALSO A FEW MORE DAYS PRIOR TO, AND AFTER, THE LOCKD OWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 TH EN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WHICH THE LOCKDOWN IS LIFTED IN TH E JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SH ALL BE EXTENDED FOR A PERIOD OF 15DAYS AFTER THE LIFTING OF LOCKDOWN. HONBLE BOMB AY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESIDES EXTENDING THE V ALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SH ALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY, AND ALSO OBSERVED THAT ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURTHER TILL 15TH JUNE 2020. IT HAS BEEN AN UNPRECEDENTED SITU ATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONA VIR US SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AND FMC (I.E. FORCE MAJEUR E CLAUSE) MAY BE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FOLLOWING THE DUE PROCEDURE. THE TERM FORCE MAJEURE HAS BEEN DEFINED IN BLACKS LAW DIC TIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLL ED WHEN SUCH IS THE POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA AND THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DISASTER UNDER THE NATIONAL DISASTER ITA NO. 1979/AHD/2017 [ITO VS. SHRI DUSHYANT MANILAL PANDYA] A.Y. 2012-13 6 MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCKDOWN WAS IN FORCE CAN BE AN YTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTIC VIEW OF THE RULE REQU IRING PRONOUNCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDING THE IMPORTANT FACT THA T THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS B Y EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORCE. WE M UST FACTOR GROUND REALITIES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE P RONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. THE TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQUIRED TO INTERPRETED. THE INTERPR ETATION SO ASSIGNED BY US IS NOT ONLY IN CONSONANCE WITH THE LETTER AND SPIRIT O F RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TIME WHEN A DISASTER, NOTIF IED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDENTED DISRU PTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBTEDLY, IN TH E CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)], HONBLE BOMBAY HIGH COU RT DID NOT APPROVE AN ORDER BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APRIL 2020, HELD THAT DIRECTED WHILE CALCUL ATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD F OR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY. THE EXTRAORDINARY STEPS TAKE N SUO MOTU BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOCKDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORMAL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR C ONSIDERED VIEW, EVEN WITHOUT THE WORDS ORDINARILY, IN THE LIGHT OF THE ABOVE A NALYSIS OF THE LEGAL POSITION, THE PERIOD DURING WHICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF ITA NO. 1979/AHD/2017 [ITO VS. SHRI DUSHYANT MANILAL PANDYA] A.Y. 2012-13 7 TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FOR PRONO UNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COU RSE, THERE IS NO, AND THERE CANNOT BE ANY, BAR ON THE DISCRETION OF THE BENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BET WEEN THE POINT OF TIME WHEN THE HEARING IS CONCLUDED AND THE POINT OF TIME WHEN THE ORDER THEREON IS BEING FINALIZED, BUT THEN, IN OUR CONSIDERED VIEW, NO SUC H EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACTS OF THIS CASE. 7. ON THE BASIS OF THE OBSERVATION MADE IN THE AFOR ESAID JUDGMENT WE EXCLUDE THE PERIOD OF LOCKDOWN WHILE COMPUTING THE LIMITATION PROVIDED UNDER RULE 34(5) OF THE INCOME TAX (APPELLATE TRIBUNAL) R ULE 1963. ORDER IS, THUS, PRONOUNCED IN THE OPEN COURT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (WASEEM AHMED) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 08/06/2020 TANMAY, SR. PS TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. % / ASSESSEE 3. + ,! -! / CONCERNED CIT 4. -!- / CIT (A) 5. 123 ! ,, ' ,, 56%+% / DR, ITAT, AHMEDABAD 6. 38 9 / GUARD FILE. BY ORDER / %& , :/5 ' ,,56%+% < THIS ORDER PRONOUNCED IN OPEN COURT ON 08/06/2020