Appeal details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 8258 (ITAT-AMRITSAR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 2 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-06-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
24-03-2020
Assessment Year
2010-2011
Appeal Filed On
12-04-2019
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH AMRITSAR BEFORE SHRI L.P. SAHU, AM & SHRI RAVISH SOOD, JM . .. . / ITA NO.238/ASR/2019 ( / ASSESSMENT YEAR :2010-2011) SHREE GURU NANAK DEV QUIN-CENTENARY CELEBRATIONS COMMITTEE, GURU NANAK BHAWAN, LUDHIANA VS. ITO(EXEMPTIONS) WARD, JALANDHAR ./ PANNO. : AAWFS 2431 F ( / APPELLANT ) .. ( / RESPONDENT ) ! ' '' ' /ASSESSEE BY : SHRI S.K.MUKHI, ADVOCATE ' '' ' /REVENUE BY : SHRI M.P.SINGH, CIT-DR ' ' / DATE OF HEARING : 06/02/2020 ' ' / DATE OF PRONOUNCEMENT : 30/06/2020 / O R D E R PER L.P.SAHU, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-4, LUDHIANA, DATED 08.02.2019, ON THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE ORDERS OF LD. CIT(A) IS ILLEGAL, ERR ONEOUS AND PERVERSE AND THUS NEEDS TO BE QUASHED. 2. THAT THE ISSUANCE OF NOTICE U/S 147/148 IS BAD I N LAW AS NO NEW MATERIAL WAS THERE WITH THE AO TO INITIATE ACTION U /S 147 AND THE PROCEEDINGS IN FURTHERANCE OF ILLEGAL NOTICE ARE VO ID AB-INITIO AND DESERVE TO BE SET ASIDE. 3. THAT THE ADDITION MADE BY AO AND PARTIALLY CONFI RMED BY CIT (A) IS DEVOID OF PROPER APPRECIATION OF FACTS ON RECORD AND AGAINST EXPRESS PROVISIONS OF LAW AND DESERVE TO BE SET ASI DE. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE PRESENT APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME ON 15.06.2010 DECLARING TOTAL INCOME AFTER CL AIMING EXEMPTION ITA NO.238/ASR/2019 2 U/S.12AA R.W.S.11 OF THE ACT, 1961. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED ON 03.09.2012 THEREIN THE RETURNED INCOME WAS ACCEPTED BY THE AO. THEREAFTER TH E CASE WAS SELECTED FOR SCRUTINY U/S.148 R.W.S. OF THE I.T.ACT, 1961 AFTER RECORDING REASONS AND OBTAINING APPROVAL FROM THE COMPETENT AU THORITY AND STATUTORY NOTICES WERE ISSUED U/S.148 OF THE ACT ON 27.03.2017. SUBSEQUENTLY, OTHER STATUTORY NOTICES WERE ALSO ISS UED TO THE ASSESSEE. THE REASONS RECORDED BY THE AO AS UNDER :- 2. BEFORE GOING AHEAD, AND EXTRACT OF REASO NS OF REOPENING THE CASE U/S 147 IS GIVEN HEREUNDER: 'ON PERUSAL OF RECORD IT, REVEALED THAT DOSING BALA NCE OF CAPITAL FUND AS ON 31.03.2009 WAS RS. 1,83,63,024/- BUT OPE NING BALANCE OF CAPITAL FUND AS ON 31.03.2010 WAS TAKEN AS RS. 2,81,68,024. THIS HAS RESULTED INTO OVERSTATEMENT OF CAPITAL FUND TO THE TUNE OF RS.9805000/- (28168024-183630324) CAPITAL FUND DETAILS :- 31.03.2009 RS. 18363024/- 31.03.2010 RS. 28168024/- UNEXPLAINED ADDITION RS. 9805000/- IT WAS ASCERTAINED FROM THE ASSESSMENT RECORD THAT ASSESSEE HAS NOT FILED EXPLANATION ALONGWITH DOCUMENTS/EVIDENCE ABOUT SOURCE OF HIS INCREASE IN THE CAPITAL FUND. RESULTANTLY, A SSESSEE HAS TAKEN OVERSTATEMENT OF CAPITAL FUND TO THE TUNE OF RS.980 5000/-. THEREFORE, TREATED AS ESCAPEMENT OF RS.9805000/-. SECONDLY, IT WAS NOTICED FROM THE BALANCE SHEET TH AT ASSESSEE HAS SHOWN RECEIPTS OF RS.2,07,46,843/- UNDER THE HEAD O F SHOPPING COMPLEX/LIBRARY HEAD BUT NOT CREDITED IN INCOME & E XPENDITURE ACCOUNT. THIS RECEIPTS WAS CAPITALIZED DIRECTLY. TH IS HAS RESULTED INTO INCOME ESCAPED ASSESSMENT TO THE TUNE OF RS.2, 07,46,843/-. THE TOTAL ESCAPED ASSESSMENT COMES TO RS.98,50,000+2,07,46,843=3,05,51,843/-. ITA NO.238/ASR/2019 3 THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME IN PUR SUANCE TO NOTICE ISSUED U/S.148 OF THE ACT, BUT HE FILED A LETTER DATED 19.07.2017, STATING AS UNDER :- 3. THE ASSESSED-SOCIETY HAS NOT FILED ANY ITR FOR A.Y.2010-11 IN RESPONSE TO NOTICE U/S.148 OF INCOME TAX ACT. HOWEV ER, THE ASSESSEE VIDE ITS LETTER DATED 19.07.2017 FURNISHED AS UNDER : I. AS STATED IN THE LETTER IT IS HEREBY CLARIFIED T HAT NO INCOME HAS ESCAPED TAX. THE DETAILED CAPITAL A/C IS ENCLOSED. IN THIS YEAR THE SOCIETY HAS RECEIVED 99 YEAR LEASE AMOUNT FROM THE SHOPS SITUATED IN THE COMPLEX AND IS A CAPITAL RECEIPT AND ACCORDI NGLY CAPITALIZED. II. SHOPPING COMPLEX/LIBRARY RECEIPT IS A LEASE FOR 99 YEARS SINCE THE YEAR 1999-2000 AND IS A ONE TIME CAPITAL RECEIPT. I N NO WAY IT IS A REVENUE RECEIPT TO BE TAKEN IN INCOME & EXPENDITURE ACCOUNT. THIS IS BALANCE OF AMOUNT FOR THAT SHOPS WHICH ARE PENDI NG FOR EXECUTION OF LEASE DEEDS. THE ENTIRE LEASE DEEDS WE RE EXECUTED IN F.Y.2012-13 AND NIL BALANCE OF SAME IS THERE IN THA T YEAR. THE COPY OF BALANCE SHEET AS ON 31.03.2013 ENCLOSED ALONGWIT H NOTES TO ACCOUNTS STATING THE POSITION. SUBSEQUENTLY, THE ASSESSEE ALSO FILED REPLY ON 03.08 .2017, WHICH WAS CONSIDERED BY THE AO AND THE AO NOTICED THAT IN THE RE ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT FILE DETAILS AS RE QUIRED BY THE AO. ACCORDINGLY, THE REASSESSMENT WAS COMPLETED U/S.144 /147 OF THE ACT AND DETERMINED TOTAL INCOME OF THE ASSESSEE AT RS.3,05 ,51,843/-. 3. AGAINST THE ABOVE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND HE ALSO CHALLENGED THE REOPENIN G OF THE CASE BY THE AO AND HE ALSO FILED DETAILED WRITTEN SUBMISSIONS BEFORE THE CIT(A). DURING THE COURSE OF HEARING, THE CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO WHICH WAS DULY CONFRONTED BEFORE THE AS SESSEE AND REJOINDER WAS ALSO FILED BY THE ASSESSEE AGAINST THE REMAND REPORT. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE AND RELYING SOME CASE LAWS, DISMISSED THE APPEAL OF THE ASSESSEE . ITA NO.238/ASR/2019 4 4. FEELING FURTHER AGGRIEVED, THE ASSESSEE IS IN APP EAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 5. LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE C IT(A) AND VEHEMENTLY ARGUED THAT THE REOPENING OF THE CASE WHI CH WAS COMPLETED U/S.143(3) OF THE ACT, CANNOT BE REOPENED M ERELY ON THE CHANGE OF OPINION WITHOUT ANY ADDITIONAL MATERIAL. IT WAS ALSO SUBMITTED BY THE LD. AR THAT ALL THE FINANCIAL DOCUMEN TS WERE FURNISHED BEFORE THE AO AT THE TIME OF ORIGINAL ASSESSMENT ON WHICH BASIS THE AO PASSED ORDER AND DETERMINED THE TOTAL INCOME AT NIL AFT ER GIVING EFFECT OF SECTION 12AA R.W.S.11 OF THE ACT. FROM THE REASO NS RECORDED BY THE AO, THERE IS NO TANGIBLE MATERIAL MENTIONED BY THE A O AND FULL AND TRUE DISCLOSURE WAS MADE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT U/S.143(3) OF THE ACT. THEREFORE, THE CASE OF THE A SSESSEE CANNOT BE REOPENED. THE DETAILS OF CAPITAL FUNDS RECEIVED BY THE ASSESSEE WERE DISCLOSED THROUGH THE RECONCILIATION STATEMENT FILED A T THE TIME OF ORIGINAL ASSESSMENT. THE AO HAS REOPENED THE CASE O N THE BASIS OF AUDIT OBJECTION WHICH WAS DULY REPLIED BY THE ASSESSEE TO T HE AO. THIS IS MERE CHANGE OF OPINION WHICH IS NOT PERMITTED AS PER THE DECISIONS OF MANY COURTS IN RESPECT OF COMPLETED ASSESSMENTS. TO SUPPORT HIS CONTENTIONS, LD. AR RELIED ON THE FOLLOWING CASE LAWS :- I) CIT VS. M/S KELVINATOR OF INDIA LIMITED, CIVIL A PPEAL NOS.2009- 2011 OF 2003, DATED 18.01.2010(SUPREME COURT), AND II) PR. CIT VS. BALDEV SINGH, ITA NO.286 OF 2016(O& M) (PUNJAB AND HARYANA HIGH COURT). ITA NO.238/ASR/2019 5 6. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF LOW ER AUTHORITIES AND THE AO HAS RIGHTLY REOPENED THE CASE WHICH HAS R IGHTLY BEEN DISMISSED BY THE CIT(A) RELYING ON MAY CASE LAWS. IT WAS ALSO SUBMITTED BY LD. DR THAT THE CASE LAWS RELIED ON BY TH E LD. AR IS DISTINGUISHABLE ON THE FACTS. 7. AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTI RE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF AUTHORITIES BELO W, WE NOTICED FROM THE DOCUMENTS SUBMITTED BY THE ASSESSEE THAT THI S ISSUE WAS ALREADY BEEN QUESTIONED BY THE AO AT THE TIME OF MAK ING ORIGINAL ASSESSMENT U/S.143(3) OF THE ACT IN THE QUESTION NO .12 DATED 06.02.2012. IN RESPONSE TO THIS, THE ASSESSEE SUBMI TTED HIS REPLY ON 23.02.2012 AT SERIAL NO.12. THE FINANCIAL STATEMENT WAS ALSO SUBMITTED BEFORE THE AO AND THE NOTES OF ACCOUNT WERE ALSO APP ENDED WITH THE FINANCIAL STATEMENTS. FURTHER IT IS ALSO CLEAR FROM THE DOCUMENTS AVAILABLE BEFORE US THAT THIS CASE HAS BEEN REOPENE D BY THE AO ON THE BASIS OF AUDIT OBJECTION IN REGARD TO CAPITAL FUNDS. THE ASSESSEE HAD ALSO DULY REPLIED OF THE AUDIT OBJECTIONS AS PER HIS LETTER WHICH IS PLACED ON RECORD. DETAILS OF CAPITAL FUNDS WERE ALSO SUBMIT TED BEFORE THE AO, WHICH MEANS THIS ISSUE WAS ALREADY BEEN EXAMINED BY THE AO AT THE TIME OF FRAMING ORIGINAL ASSESSMENT. THEREAFTER THE AO PASSED ORDER U/S.143(3) OF THE ACT AND ACCEPTED NIL RETURN OF THE ASSESSEE. THE CASE LAWS RELIED ON BY THE LD. AR IN THE CASE OF M/S KELV INATOR OF INDIA ITA NO.238/ASR/2019 6 LIMITED (SUPRA) ALSO SUPPORTS THE CASE OF THE ASSES SEE, WHEREIN THE HONBLE SUPREME COURT HAS HELD AS UNDER :- HEARD LEARNED COUNSEL ON BOTH SIDES. A SHORT QUEST ION WHICH ARISES FOR DETERMINATION IN THIS BATCH OF CIVIL APPEALS IS, WH ETHER THE CONCEPT OF 'CHANGE OF OPINION' STANDS OBLITERATED WITH EFFECT FROM 1ST APRIL, 1989, I.E., AFTER SUBSTITUTION OF SECTION 147 OF THE INCOME TAX ACT, 1961 BY DIRECT TAX LAWS (AMENDMENT) ACT, 1987? TO ANSWER THE ABOVE QUESTION, WE NEED TO NOTE THE C HANGES UNDERGONE BY SECTION 147 OF THE INCOME TAX ACT, 1961 [FOR SHORT, 'THE ACT'] . PRIOR TO DIRECT TAX LAWS (AMENDMENT) ACT, 1987, SECTION 147 READS AS UNDER: 'INCOME ESCAPING ASSESSMENT. 147. IF [A] THE INCOME-TAX OFFICER HAS REASON TO BELIEVE TH AT, BY REASON OF THE OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO M AKE A RETURN UNDER SECTION 139 FOR ANY ASSESSMENT YEAR TO THE INCOME-TAX OFFICER OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR HIS ASSESSMENT FOR THAT YEAR, INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THAT YEAR, OR [B] NOTWITHSTANDING THAT THERE HAS BEEN NO OMISSION OR FAILURE AS MENTIONED IN CLAUSE (A) ON THE PART OF THE ASSESSEE, THE INCOME- TAX OF FICER HAS IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 , ASSESS OR REASSESS SUCH INCOME OR RECOMPUTE THE LOSS OR THE D EPRECIATION ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR).' AFTER ENACTMENT OF DIRECT TAX LAWS (AMENDMENT) ACT, 1987, I.E., PRIOR TO 1ST APRIL, 1989, SECTION 147 OF THE ACT, READS AS UNDER: '147. INCOME ESCAPING ASSESSMENT.-- IF THE ASSESSIN G OFFICER, FOR REASONS TO BE RECORDED BY HIM IN WRITING, IS OF THE OPINION THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 , ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSME NT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURS E OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LO SS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS T HE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR).' AFTER THE AMENDING ACT , 1989, SECTION 147 READS AS UNDER: 'INCOME ESCAPING ASSESSMENT. 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 , ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SU BSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE COMPUTE THE LOSS OR ITA NO.238/ASR/2019 7 THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THI S SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR).' ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE TO SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX LAWS (AMENDM ENT) ACT, 1987, RE- OPENING COULD BE DONE UNDER ABOVE TWO CONDITIONS AN D FULFILLMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE ACT [WITH EFFECT FROM 1ST APRIL, 1989], THEY ARE GIVEN A GO-BY AND ONLY O NE CONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESSING OFFICER HA S REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDI CTION TO RE- OPEN THE ASSESSMENT. THEREFORE, POST-1ST APRIL, 1989, POWER TO RE-OPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTER PRETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFR AID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFIC ER TO RE-OPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION ', WHICH CANNOT BE PER SE REASON TO RE-OPEN. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO RE- ASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS TH E POWER TO RE-ASSESS. BUT RE-ASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRE-CONDITION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVE D, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE-O PENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK AB USE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, AS SESSING OFFICER HAS POWER TO RE-OPEN, PROVIDED THERE IS 'TANGIBLE MATER IAL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BEL IEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BE LIEVE' BUT ALSO INSERTED THE WORD 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAIN ST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE-INTRODUCED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GROUND THAT I T WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CIRCULAR NO.549 DATED 31ST OCTO BER, 1989, WHICH READS AS FOLLOWS: '7.2 AMENDMENT MADE BY THE AMENDING ACT , 1989, TO REINTRODUCE THE EXPRESSION `REASON TO BELIEVE' IN SECTION 147 .--A NUMBER OF REPRESENTATIONS WERE RECEIVED AGAINST THE OMISSION OF THE WORDS `REASON TO BELIEVE' FROM SECTION 147 AND THEIR SUBSTITUTION BY THE `OPINION' OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, `REASON TO BELIEVE' HAD BEEN EXPLAINED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WE LL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MER E CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT , 1989, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EXPRESSION `HAS REASON TO BELIEVE' IN PLACE OF THE WORDS `FOR REASONS TO BE R ECORDED BY HIM IN ITA NO.238/ASR/2019 8 WRITING, IS OF THE OPINION'. OTHER PROVISIONS OF TH E NEW SECTION 147 , HOWEVER, REMAIN THE SAME.' FOR THE AFORE-STATED REASONS, WE SEE NO MERIT IN TH ESE CIVIL APPEALS FILED BY THE DEPARTMENT, HENCE, DISMISSED WITH NO ORDER A S TO COSTS. 8. FURTHER, THE HONBLE PUNJAB AND HARYANA HIGH COUR T IN THE CASE OF BALDEV SINGH(SUPRA), HAS HELD AS UNDER :- 6. AS WE NOTED EARLIER THE DETAIL S IN RESPECT OF TRANSACTIONS WERE CALLED FOR BY THE ASSESSING OFFICER AND THE AS SESSEE FURNISHED THE SAME. ON THE BASIS THEREOF THE ASSESSING OFFICER AC CEPTED THE RETURN IN THIS RESPECT. THE TRIBUNAL ON THIS BASIS AND AFTER FOLLOWING THE JUDGMENTS OF DELHI HIGH COURT IN MADHUKAR KHOSLA V. ASSISTANT COMMISSIONER OF INCOME TAX (2014) 90CCH 0023 DELHI HIGH COURT AND ORIENT CRAFTS LTD. 354 ITR 536 (DELHI) RIGHTLY ALLO WED THE APPEAL ON THE GROUND THAT THE ASSESSING OFFICER WAS NOT ENTITLED TO ASSUME JURISDICTION UNDER SECTION 147 OF THE ACT IN THE ABSENCE OF ANY NEW INFORMATION OR MATERIAL. WE ARE UNABLE TO STATE THAT THE FINDING I S PERVERSE OR IRRATIONAL. 9. RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL DECISIO NS, WE ARE OF THE OPINION THAT IN ABSENCE OF ANY NEW MATERIAL POINTED OUT BY THE ASSESSEE IN THE REASONS RECORDED, THE REASSESSMENT U/S.147 OF THE ACT IS NULL AND VOID AND WE QUASH THE REASSESSMENT ORDER P ASSED BY THE AO ON LEGAL GROUND. SINCE WE HAVE ALREADY QUASHED THE R EASSESSMENT ORDER PASSED BY THE AO ON LEGAL GROUND, OTHER GROUNDS O N MERITS NEED NO ADJUDICATION. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED ON LEGAL GROUND. 10. NOW, A PROCEDURAL ISSUE COMES BEFORE US THAT TH OUGH THE HEARING OF THE CAPTIONED APPEAL WAS CONCLUDED ON 06.02.2020, HOWEVER, THIS ORDER IS BEING PRONOUNCED MUCH AFTER THE EXPIRY OF 9 0 DAYS FROM THE DATE OF CONCLUSION OF HEARING. WE FIND THAT RULE 34( 5) OF THE INCOME ITA NO.238/ASR/2019 9 TAX APPELLATE TRIBUNAL RULES, 1962, WHICH ENVISAGES THE PROCEDURE FOR PRONOUNCEMENT ORDERS, PROVIDES AS FOLLOWS: 34(5) THE PRONOUNCEMENT MAY BE IN ANY OF THE FOLLOW ING MANNERS: - (A) THE BENCH MAY PRONOUNCE THE ORDER IMMEDIATELY U PON THE CONCLUSION OF HEARING. (B) IN CASE WHERE THE ORDER IS NOT PRONOUNCED IMME DIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A D ATE OF PRONOUNCEMENT. (C) IN A CASE WHERE NO DATE OF PRONOUNCEMENT IS GIV EN BY THE BENCH, EVERY ENDEAVOUR SHALL BE MADE BY THE BENCH TO PRONO UNCE THE ORDER WITHIN 60 DAYS FROM THE DATE ON WHICH THE HEARING O F 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 ORD ER, AND SUCH DATE SHALL NOT ORDINARILY BE A DAY BEYOND A FURTHER PERI OD OF 30 DAYS AND DUE NOTICE OF THE DAY SO FIXED SHALL BE GIVEN ON TH E NOTICE BOARD. AS SUCH, ORDINARILY, THE ORDER ON AN APPEAL SHOULD BE PRONOUNCED BY THE BENCH WITHIN NO MORE THAN 90 DAYS FROM THE DATE O F CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT TO NOTE THAT THE EXPRESSION ORDINARILY HAS BEEN USED IN THE SAID RULE ITSELF. THIS RULE WAS INSERTED AS A RESULT OF DIRECTIONS OF HONBLE HIGH COURT IN T HE CASE OF SHIVSAGAR VEG RESTAURANT VS ACIT (2009) 319 ITR 433 (BOM), WH EREIN, IT WAS, INTER ALIA , OBSERVED AS UNDER: WE, THEREFORE, DIRECT THE PRESIDENT OF THE APPELLA TE TRIBUNAL TO FRAME AND LAY DOWN THE GUIDELINES IN THE SIMILAR LINES 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 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, SUPPLIE D BY US NOW),ALL THE REVISIONAL AND APPELLATE AUTHORITIES UNDER THE INCO ME-TAX ACT ARE DIRECTED TO DECIDE MATTERS HEARD BY THEM WITHIN A P ERIOD OF THREE MONTHS FROM THE DATE CASE IS CLOSED FOR JUDGMENT. IN THE RULES SO FRAMED, AS A RESULT OF THESE DIRECTI ONS, THE EXPRESSION ORDINARILY HAS BEEN INSERTED IN THE REQUIREMENT T O PRONOUNCE THE ITA NO.238/ASR/2019 10 ORDER WITHIN A PERIOD OF 90DAYS. THE QUESTION THEN AR ISES WHETHER THE PASSING OF THIS ORDER, BEYOND NINETY DAYS, WAS NECESS ITATED BY ANY EXTRAORDINARY CIRCUMSTANCES. 11. WE ALSO FIND THAT THE AFORESAID ISSUE HAS BEEN A NSWERED BY A COORDINATE BENCH OF THE TRIBUNAL VIZ; ITAT, MUMBAI F BENCH IN DCIT, CENTRAL CIRCLE-3(2), MUMBAI VS JSW LIMITED & ORS (I TA NO.6264/MUM/18 DATED 14.5.2020, WHEREIN, IT WAS OBSE RVED AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SITUATION IN THE COUNTRY. ON 24TH MARCH,2020, HONBLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PREVENT THE SPREAD OF COVID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDE D FROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNA L 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 AFEW 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 JURISDICTION AL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SH ALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN. H ONBLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESI DES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED T HAT, 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 26 TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY, AND ALSO OBSERVED THAT ARRANGEMENT C ONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SH ALL CONTINUE FURTHER TILL 15TH JUNE2020. IT HAS BEEN AN UNPRECEDENTED S ITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA H AS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AN D FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FOLLOWING THE DUE PROCEDURE.... THE TERM FORCE MA JEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE ITA NO.238/ASR/2019 11 NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS TH E POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA A ND THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DISASTER UNDER THE NATIONAL DISASTER MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCKDOWN WAS IN FORCE CAN B E ANYTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE O F 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 SH OULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORCE. WE MUST FACTOR GROUND REALIT IES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCEMENT O F THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMA TIC 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 INTERPRETATION SO ASSIGNED BY US IS NOT ONLY INCONSONANCE WITH THE LE TTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TIME WH EN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDENTED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBTEDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)], HONBLE BOMBAY HIGH COURT DID NOT APPRO VE 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 APRIL2020, HELD THAT DIRECTED WHILE CAL CULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERAT E SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY. THE EXT RAORDINARY STEPS TAKEN SUO MOTU BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOC KDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORM AL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WI THOUT THE WORDS ORDINARILY, IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING WHICH LOCKOUT WAS IN FORCE IS TO EXCL UDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLA TE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FO R PRONOUNCEMENT 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. 12. RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL DECISI ON OF HONBLE BOMBAY HIGH COURT AND THE TRIBUNAL, WE ARE OF THE CO NSIDERED VIEW THAT THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORC E SHALL STAND EXCLUDED FOR THE PURPOSE OF WORKING OUT THE TIME LIMI T FOR ITA NO.238/ASR/2019 12 PRONOUNCEMENT OF ORDERS, AS ENVISAGED IN RULE 34(5) O F THE APPELLATE TRIBUNAL RULES, 1963. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) OF I TAT RULES, 1963 BY PUTTING THE COPY OF THE SAME ON NOTICE BOAR D ON 30/06/2020 AT AMRITSAR. SD/ - (RAVISH SOOD) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / AMRITSAR; , DATED 30/06/2020 PRAKASH KUMAR MISHRA, SR.P.S. ' '' ' - - - - .- .- .- .- / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) ITAT AMRITSAR BENCH, AMRITSAR 1. / THE APPELLANT- SHREE GURU NANAK DEV QUIN-CENTENARY CELEBRATIONS COMMITTEE, GURU NANAK BHAWAN, LUDHIANA 2. / THE RESPONDENT- ITO(EXEMPTIONS) WARD, JALANDHAR 3. / ( ) / THE CIT(A), 4. / / CIT 5. - , , / DR, ITAT, AMRITSAR 6. / GUARD FILE. - //TRUE COPY//
