Parshuram Sharafi Sahakari Mandli Ltd., Rajkot V. The Pr. Commissioner of Income Tax-1, Rajkot

ITA 21/RJT/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0060 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 08-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M N MAURYA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO. 21/RJT/2019 (ASSESSMENT YEAR : 2014-15) SHRI PRASHURAM SHARAFI MANDALI LTD. 201, ORBIT PLAZA, NEAR SWAMINARAYAN STATUE, DR. YAGNIK ROAD, RAJKOT VS. PR. COMMISSIONER OF INCOME TAX-1, RAJKOT [PAN NO. AAA AP2 097 D] (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI KALPESH DOSHI , A R RESPONDENT BY : SHRI M. N. MAURYA, CIT D.R. DATE OF HEARING 26.02.2020 DATE OF PRONOUNCEMENT 29.06.2020 O R D E R PER MS. MADHUMITA ROY JUDICIAL MEMBER: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 07.01.2019 PASSED BY THE PR. COMMISSION ER OF INCOME TAX- 1, RAJKOT ARISING OUT OF THE ORDER DATED 12.12.2019 PASSED BY THE DCIT, CIRCLE 1(2), RAJKOT UNDER SECTION 143(3) R.W.S 26 3 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) FO R THE ASSESSMENT YEAR (A.Y.) 2014-15. 2. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD. ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE CONSEQUENTIAL ORDER UNDER SECTION 143(3) R.W.S. 263 OF THE ACT HA S ALREADY BEEN PASSED BY THE LD. DCIT, CIRLCE-1(2), RAJKOT ON 12.12.2019 DETERMINING THE - 2 - ITA NO.21/RJT/2019 SHRI PARSHURAM SHARAFI SAHAKARI VS. PR. CIT ASST.YEAR 2014-15 INCOME OF THE ASSESSEE AT NIL. HENCE, THE IMPUGNED ORDER BEFORE US DATED 07.01.2019 IS ALLEGED ITS FORCE AND BECOME IN FRUCTUOUS. IN VIEW OF THE MATTER WE DISMISS THE MATTER AS INFRUCTUOS. 3. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S DISMISSED AS INFRUCTUOUS. 4. BEFORE PARTING WE WOULD LIKE TO MAKE CERTAIN OBS ERVATION RELATING TO THE ISSUE CROPPED UP UNDER PRESENT SCENARIO OF COVI D-19 PANDEMIC AS TO WHETHER WHEN THE HEARING OF THE MATTER WAS CONCLUDE D ON 26.02.2020 THE ORDER CAN BE PRONOUNCED TODAY I.E. ON 26.06.202 0. THE ISSUE HAS ALREADY BEEN DISCUSSED BY THE CO-ORDINATE BENCH IN THE CASE OF DCIT VS. JSW LTD. (ITA NOS. 6264 & 6103/MUM/2018) PRONOUNCED ON 14.05.2020 IN THE LIGHT OF WHICH IT IS WELL WITHIN THE TIME LIMIT PERMITTED UNDER RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1 963 IN VIEW OF THE FOLLOWING OBSERVATIONS MADE 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 PR ONOUNCED TODAY ON THE DAY OF 14TH MAY, 2020, MUCH AFTER THE EXPIRY OF 90 DAYS FROM THE DATE OF CONCLUSION OF HEARING. WE ARE ALSO ALIVE TO THE FACT THAT RULE 34(5) OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1963, WH ICH DEALS WITH PRONOUNCEMENT 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. - 3 - ITA NO.21/RJT/2019 SHRI PARSHURAM SHARAFI SAHAKARI VS. PR. CIT ASST.YEAR 2014-15 (B) IN CASE WHERE THE ORDER IS NOT PRONO UNCED IMMEDIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A D ATE FOR PRONOUNCEMENT. (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 T HE ORDER WITHIN 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 A ND EXTRAORDINARY CIRCUMSTANCES OF THE CASE, THE BENCH SHALL FIX A FUTURE DAY FOR P RONOUNCEMENT OF THE ORDER, AND SUCH DATE SHALL NOT ORDINARILY (EMPHASIS SUPPLIED B Y US NOW) BE A DAY BEYOND A FURTHER PERIOD OF 30 DAYS AND 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 DATE OF CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT T O NOTE THAT THE EXPRESSION ORDINARILY HAS BEEN USED IN THE SAID R ULE ITSELF. THIS RULE WAS INSERTED AS A RESULT OF DIRECTIONS OF HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF SHIVSAGAR VEG RESTAURANT VS ACIT [( 2009) 317 ITR 433 (BOM)] WHEREIN THEIR LORDSHIPS HAD, INTER ALIA, DIR ECTED THAT WE, THEREFORE, DIRECT THE PRESIDENT OF THE APPELLATE TR IBUNAL TO FRAME AND LAY DOWN THE GUIDELINES IN THE SIMILAR LINES AS ARE LAI D DOWN BY THE APEX COURT IN THE CASE OF ANIL RAI (SUPRA) AND TO ISSUE APPROPRIATE ADMINISTRATIVE DIRECTIONS TO ALL THE BENCHES OF THE TRIBUNAL IN THAT BEHALF. WE HOPE AND TRUST THAT SUITABLE GUIDELINES SHALL BE FRAMED AND ISSUED BY THE PRESIDENT OF THE APPELLATE TRIBUNAL W ITHIN SHORTEST REASONABLE TIME AND FOLLOWED STRICTLY BY ALL THE BE NCHES OF THE TRIBUNAL. IN THE MEANWHILE(EMPHASIS, BY UNDERLINING, SUPPLIED BY US NOW), ALL THE REVISIONAL AND APPELLATE AUTHORITIES UNDER THE INCO ME-TAX ACT ARE - 4 - ITA NO.21/RJT/2019 SHRI PARSHURAM SHARAFI SAHAKARI VS. PR. CIT ASST.YEAR 2014-15 DIRECTED TO DECIDE MATTERS HEARD BY THEM WITHIN A P ERIOD OF THREE MONTHS FROM THE DATE CASE IS CLOSED FOR JUDGMENT. IN TH E RULED SO FRAMED, AS A RESULT OF THESE DIRECTIONS, THE EXPRESSION ORDINAR ILY 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 CIRCUMSTANCES. 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDI A TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PREVENT SPREAD OF COVID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED F ROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATION WIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE M AHARASHTRA GOVERNMENT, AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID 19. THE EPI DEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXAT ION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CASE, THERE WAS UNPRECEDENTE D DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF F ACT, 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 VID E ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO A FE W MORE DAYS PRIOR TO, AND AFTER, THE LOCKDOWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03 .2020 TILL THE DATE ON WHICH THE LOCKDOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE - 5 - ITA NO.21/RJT/2019 SHRI PARSHURAM SHARAFI SAHAKARI VS. PR. CIT ASST.YEAR 2014-15 LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE E XTENDED 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 VALIDITY 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 202 0 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDE D ACCORDINGLY, AND ALSO OBSERVED THAT ARRANGEMENT CONTINUED BY AN ORD ER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURT HER TILL 15TH JUNE 2020. IT HAS BEEN AN UNPRECEDENTED SITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTI FICATION 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 MAJEURE CLAUSE) MAY BE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FO LLOWING THE DUE PROCEDURE. THE TERM FORCE MAJEURE HAS BEEN DEF INED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEIT HER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE POSITION, AND IT IS OF FICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA AND THE COVID-19 EPIDEMIC HAS B EEN NOTIFIED AS A DISASTER UNDER THE NATIONAL DISASTER MANAGEMENT ACT , 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURI NG WHICH LOCKDOWN WAS IN FORCE CAN BE ANYTHING 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 REQUIRING PRONOUNCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDIN G THE IMPORTANT FACT THAT THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN - 6 - ITA NO.21/RJT/2019 SHRI PARSHURAM SHARAFI SAHAKARI VS. PR. CIT ASST.YEAR 2014-15 WAS IN FORCE. WE MUST FACTOR GROUND REALITIES IN MI ND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMATIC TOOL OF T HE SOCIAL ORDER. THE TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMAT ISM, AND THAT IS HOW THE LAW IS REQUIRED TO INTERPRETED. THE INTERPRETAT ION 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, NOT IFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDEN TED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UN DOUBTEDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)], H ONBLE BOMBAY HIGH COURT DID NOT APPROVE AN ORDER BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATIO N HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APR IL 2020, HELD THAT DIRECTED WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME- BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME S HALL STAND EXTENDED ACCORDINGLY. THE EXTRAORDINARY STEPS TAKEN SUO MOT U BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOCKDOWN CANNOT BE TREATED AS AN ORD INARY PERIOD DURING WHICH THE NORMAL TIME LIMITS ARE TO REMAIN IN FORCE . IN OUR CONSIDERED VIEW, EVEN WITHOUT THE WORDS ORDINARILY, IN THE L IGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING W HICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, TH E EXCEPTION, TO 90- DAY TIME-LIMIT FOR PRONOUNCEMENT OF ORDERS, INHEREN T IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THE RE IS NO, AND THERE - 7 - ITA NO.21/RJT/2019 SHRI PARSHURAM SHARAFI SAHAKARI VS. PR. CIT ASST.YEAR 2014-15 CANNOT BE ANY, BAR ON THE DISCRETION OF THE BENCHES TO RE-FIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BETWEEN 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 CONSID ERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACT S OF THIS CASE. 5. 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 TRIBU NAL) RULE 1963. ORDER IS, THUS, PRONOUNCED IN THE OPEN COURT. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S DISMISSED AS INFRUCTUOUS. THIS ORDER PRONOUNCED IN OPEN COURT ON 29/06/2020 SD/- SD/- ( WASEEM AHMED ) ( MS. MAD HUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/06/2020 TANMAY, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , ! /DR,ITAT, RAJKOT 6. '# $% / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , ! / ITAT, RAJKOT