M/S UBIQUITOUS SIGNS PVT LTD, PALGHAR V. ITO, 15(3)(4), MUMBAI

ITA 297/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6636 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BHARTI SINGH
• Keywords: Bogus purchase

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI C. N. PRASAD, JM & SHRI S. RIFAUR RAHMAN, AM ./ I.T.A. NO . 297 / MUM/ 2019 ( / ASSESSMENT YEAR: 2009 - 10 ) M/S UBIQUITOUS SIGNS PVT. LTD. PLOT NO. 1, SURVEY NO. 70 - B, BLDG. NO. 2, OPP - IPOL, NEXT TO ANAND MANGAL INDUSTRIAL ESTATE, WALIV PHATA, SATIVALI ROAD, VASAI EAST, DISTT - PALGHAR, MAHRASHTRA, PIN - 401208 / VS. ITO - 15 (3)(4 ), 4 TH FLOOR, AAYAKAR BHAV A N, M. K. ROAD, MUMBAI - 400 020 . ./ ./ PAN NO. AA ACU 6857 C ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : MS. BHARTI SINGH , DR / DATE OF HEARING : 05.03 .2020 / DATE OF PRONOUNCEMENT : 15.07.2020 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 24 IN 2 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 20 .09 .17 FOR A SSESSMENT YEAR (IN SHORT A Y ) 20 09 - 10 . 2. AT THE OUTSET, IT IS NOTICED THAT NO NE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. ON THE OTHER HAND, L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE , WE HAVE DEC IDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. LD. DR SUBMITTED THAT ASSESSEE HAS NOT APPEARED BEFORE LD. CIT(A) AFTER SENDING NOTICES ON THE GIVEN ADDRESS IN FORM 35 . THEREFORE, LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE ORDER OF LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE HONBLE ITAT. HE FURTHER SUBMITTED THAT THERE IS HUGE DELAY OF 384 DAYS IN FILING THE APPEAL. 4. CONSIDERED THE SUBMISSION OF L D. DR AND MATERIAL PLACED ON RECORD, WE NOTICE THAT NEITHER ASSESSEE NOR HIS REPRESENTATIVE HAS APPEARED BEFORE LD. CIT(A) EVEN MANY NOTICES WERE SENT TO THE ASSESSEE ON THE GIVEN ADDRESS AND ACCORDINGLY, LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. EV EN BEFORE US, ASSESSEE 3 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. HAS NOT APPEARED, WHICH REFLECTS THAT ASSESSEE IS NOT INTERESTED IN PURSUING THE CASE. THE CONDUCT OF THE ASSESSEE IS VERY CASUAL AND NEITHER THE ASSESSEE NOR HIS REPRESENTATIVE HAD APPEARED BEFORE US AND THE FINDINGS OF THE REVENUE AUTHORITIES HAD ALSO NOT BEEN CONTROVERTED OR REBUTTED. 5. WE FURTHER NOTICE THAT THERE IS HUGE DELAY OF 384 DAYS IN FILING THE APPEAL BEFORE ITAT. NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THE DELAY EXCEPT A LETTER WRITTEN BY THE ASSES SEE MENTIONING T HE REASONS FOR DELAY IS THAT ASSESSEE HAD SHIFTED THE OFFICE TO NEW ADDRESS. 6. ON MERIT, WE NOTICE THAT AO IN THIS CASE HAS MADE 100% DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES AND FURTHER ON APPEAL, LD. CIT(A) DISMISSED THE APPEAL EX - PARTE AS ASSESSEE HA D NOT APPEARED FOR HEARING FROM 24.10.16 TO 19.07.17. DURING THAT PERIOD, ASSESSE WAS GIVEN SEVERAL OPPORTUNITIES. ASSESSEE HAS NOT DEMONSTRATED ANY SERIOUSNESS TO APPEAL PROCEEDINGS. THEREFORE, IT IS DISMISSED IN LIMINE. LD. CIT(A) HAS ADJUDICATED ON MERI TS. 7 . I N VIEW OF THE OVERALL SITUATION AND ASSESSEE HAD FILED THIS APPEAL WITH DELAY OF 384 DAYS WITHOUT ANY SUPPORTING DOCUMENTS 4 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. FOR REASONS OF SUCH DELAY, THEREFORE WE SEE NO REASON S TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS SO RECORDED BY THE LD. CIT (A). HENCE , THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED . 9. IT IS PERTINENT TO MENTION HERE THAT THIS ORDER IS PRONOUNCED AFTER A PERIOD OF 90 DAYS FROM THE DATE OF CONCLUSION OF THE HEARING. IN THIS REGARD, WE PLACE RELIANCE ON THE DECISION OF CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JSW LTD IN ITA NOS. 6264 & 6103/MUM/2018 DATED 14.5.2020, WHEREIN THIS ISSUE HAS BEEN ADDRESSED IN DETAIL ALLOWING TIME TO PRO NOUNCE THE ORDER BEYOND 90 DAYS FROM THE DATE OF CONCLUSION OF HEARING BY EXCLUDING THE DAYS FOR WHICH THE LOCKDOWN ANNOUNCED BY THE GOVERNMENT WAS IN FORCE. THE RELEVANT OBSERVATIONS OF THIS TRIBUNAL IN THE SAID BINDING PRECEDENT ARE AS UNDER: - 7. HOWEVER, BEFORE WE PART WITH THE MATTER, WE MUST DEAL WITH ONE PROCEDURAL ISSUE AS WELL. WHILE HEARING OF THESE APPEALS WAS CONCLUDED ON 7TH JANUARY 2020, THIS ORDER THEREON IS BEING PRONOUNCED TODAY ON 14 TH DAY OF 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, WHICH DEALS WITH PRONOUNCEMENT OF ORDERS, PROVIDES AS FOLLOWS: 5 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. (5) THE PRONOUNCEMENT MAY BE IN ANY OF THE FOLLOWING MANNERS: (A) THE BENCH MAY PRONOUNCE THE ORDER IMMEDIATELY UPON THE CONCLUSION OF THEHEARING. (B) IN CASE WHERE THE ORDER IS NOT PRONOUNCED IMMEDIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A DATE FOR PRONOUNCEMENT. (C ) IN A CASE WHERE NO DATE OF PRO NOUNCEMENT IS GIVEN BY THE BENCH, EVERY ENDEAVOUR SHALL BE MADE BY THE BENCH TO PRONOUNCE THE 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 AND EXTRA ORDINARY 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 NOW) BE A DAY BEYOND A FURTHER PERIOD OF 30 DAYS AND DUE NOTICE OF THE DAY SO FIXED SHALL BE GIVEN ON THE NOTICEBOARD. 8. QUITE CLEARLY, ORDINARILY THE ORDER ON AN APPEAL SHOULD BE PRONOUNCED BY THE BENCH WITHIN NO MORE THAN 90 DAYS FROM THE DATE OF CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT TO NOTE THAT THE EXPRESSION ORDINARILY HAS BEEN USED IN THE SAID RULE I TSELF. THIS RULE WAS INSERTED 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 LORDSHIPS HAD, INTER ALIA, DIRECTED THAT WE, THEREFORE, DIRECT THE PRESI DENT OF THE APPELLATE 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 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 WITHIN SHORTEST REASONABLE TIME AND FOLLOWED STRICTLY BY ALL THE BENCHES OF THE TRIBUNAL. IN THE MEANWHILE ( EMPHASIS, BY UNDERLINING, SUPPLIE D BY US NOW ), ALL THE REVISIONAL AND APPELLATE AUTHORITIES UNDER THE INCOME - TAX ACT ARE DIRECTED TO DECIDE MATTERS 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 DIRECT IONS, THE EXPRESSION ORDINARILY HAS BEEN INSERTED IN THE 6 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. REQUIREMENT TO PRONOUNCE THE ORDER WITHIN A PERIOD OF 90 DAYS. THE QUESTION THEN ARISES WHETHER THE PASSING OF THIS ORDER, BEYOND NINETY DAYS, WAS NECESSITATED BY ANY EXTRAORDINARY CIRCUMSTANCES. 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 LOCKD OWN 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 SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE MAHARASHTRA GOVERNMENT, AND ON ACCOUN T OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CASE, THERE WAS UNPRECEDENTED DISRUPTION OF JUDIC IAL 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 INDIA, 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 ONLY THIS LOCKDOWN PERIOD BUT ALSO A FEW 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 LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN . HONBLE BOMBAY 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 D ATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL 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 SITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19 TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AND FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FOLLOWING THE DUE PROCEDURE. THE TERM FORCE 7 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS TH E 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 MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCK DOWN WAS IN FORCE CAN BE ANYTHING BUT AN ORDINARYPERIOD. 1 0.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, DISREGARDING THE IMPO RTANT 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 WAS IN FORCE. WE MUST FACTOR GROUND REALITIES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCE MENT 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 INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CONSONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TIME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDENTED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY S YSTEM. UNDOUBTEDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)] , HONBLE BOMBAY HIGH COURT 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 15 TH APRIL 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 SHALL STAN D EXTENDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUOMOTU 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 REMA IN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WITHOUT THE WORDS ORDINARILY,IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING WHICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPEL LATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90 - DAY TIME - LIMIT FOR PRONOUNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN 8 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THER E 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 BETWEEN THE POINT OF TIME WHEN THE HEARING IS CONCLUDED AND THE POINT OF TIME WHEN THE ORDER THEREON IS BEING FI NALIZED, BUT THEN, IN OUR CONSIDERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACTS OF THIS CASE. 11. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOWED, AND APPEAL OF THE ASSESSING OFFICER IS DISMISSED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD. 10 . RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRECEDENT, WE PROCEED TO PRONOUNCE THIS ORDER BEYOND A PERIOD OF 90 DAYS FROM THE DATE OF CONCLUSION OF HEARING. 11 ORDER PRONOUNCED AS PER RULE 34(5) OF ITAT RULES AND BY PLACING THE PRONOUNCEMENT LIST IN T HE NOTICE BOARD ON 15.07.2020 . SD/ - SD/ - ( C. N. PRASAD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 15.07.2020 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 9 I.T.A. NO. 297 /MUM/201 9 M/S UBIQUITOUS SIGNS PVT. LTD. 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI