Brig.Narayan Nayak, Bhubaneswar V. DCIT, Circle-5(1), Bhubaneswar

ITA 30/CTK/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0858 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 24-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P K SAHOO
• Keywords: Unexplained cash credit; Business income; Retrospective amendment; TDS; Set aside
• Section: 43B; 40(a)(ia); 191; 139(1); 44AB; 194J; 73; 13; 22; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO. 30 /CTK/201 7 AND . / ITA NO. 230 /CTK/201 9 ( / ASSESSMENT YEAR : 20 1 2 - 2 01 3 ) BRIG. NARAYAN NAYAK, PROP: M/S INDUSTRIAL SECURITY & ALLIED SERVICES, F3 - F5, ID MARKET, IRC VILLAGE, NAYAPALLI, BHUBANESAR - 751015 VS. DCIT, CIRCLE - 5(1), BHUBANESWAR ./ PAN NO. : A BAPN 3373 Q ( / APPELLANT ) .. ( / RES PONDENT ) /ASSESSEE BY : SHRI P.K.SAHOO, CA /REVENUE BY : SHRI S UBHENDU DUTTA , DR / DATE OF HEARING : 25 / 02 /20 20 / DATE OF PRONOUNCEMENT : 05/06 /20 20 / O R D E R PER L.P.SAHU , A M : TH E ASSESSEE HAS FILED THE ABOVE TWO APPEALS, ONE IS AGAINST THE ORDER PASSED BY THE CIT(A) - 2, DATED 27.10.2016 ARISING OUT OF THE ORDER PASSED BY THE AO U/S.143(3) OF THE ACT AND ANOTHER IS AGAINST THE ORDER PASSED BY THE CIT(A) - 2, BHUBANESWAR, DAT ED 14.04.2019 ARISING OUT OF THE ORDER PASSED BY THE AO U/S.271(1)(C) OF THE ACT. 2. FIRST WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO.30/CTK/2017, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 2 (1) THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) - 2 BHUBANESWAR CONFIRMING THE ADDITION OF UNSECURED LOAN OF RS. 10,02,312/ - FROM ITS EMPLOYEES AS UNEXPLAINED CASH CREDIT IS ILLEGAL, BAD IN LAW, CONTRARY TO THE RULE AND CIRCUMSTANCES OF THE CASE. DURING THE COURSE OF HEARING BEFO RE THE ASSESSING OFFICER, IDENTITY CARDS (I. CARD) OF EMPLOYEES WERE PRODUCED. THE UNSECURED LOAN ACCEPTED FROM EMPLOYEES IS VERY NOMINAL AND THAT IS TREATED AS A SECURITY MONEY KEPT WITH THE EMPLOYER AND PAID BACK WHEN THEY LEFT THE SERVICE. (2) CONFIRM ING THE ADDITION OF RS.87,83,626/ - ON ACCOUNT OF LEAVE ENCASHMENT IS BAD IN LAW. ACTUALLY THIS IS THE AMOUNT PAID TO EMPLOYEES IN LIEU OF LEAVE I.E. PAYMENT MADE FOR WORKING ON WEEKLY OFF DAYS AND PAID HOLIDAYS. THIS IS A WRONG HEAD BEING REFLECTED IN THE PROFIT & LOSS ACCOUNTS AS LEAVE ENCASHMENT INSTEAD OF SALARY IN LIEU OF LEAVE. (3) THE ORDER OF THE LEARNED COMMISSIONER CIT APPEAL - 2, BHUBANESWAR CONFIRMING THE ADDITION OF GRATUITY AMO UNTING TO RS. 6,77,823/ - MADE BY THE ASSESSING OFFICER IN COMPUTING T HE BUSINESS INCOME OF THE APPELLANT IS CONTRARY TO LAW AND FACTS OF THE CASE. (4) CONFIRMING THE ADDITION OF DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AMOUNTING TO RS. 18,29,501/ - IS BAD IN LAW AND HENCE IS LIABLE TO THE DELETED. ACTUAL LY, THE AMOUNT HAS BEEN DEPOSITED TO THE P.F AUTHORITIES DURING THE YEAR, BUT BEYOND STATUTORY DUE DATE. (5) THE ORDER OF THE LEARNED COMMISSIONER CIT APPEAL - 2, BHUBANESWAR CONFIRMING THE ADDITION . OF EPF AMOUNTING TO RS. 4,81,965/ - MADE BY THE ASS ESSING OFFICER IN COMPUTING THE BUSINESS INCOME OF THE APPELLANT IS CONTRARY TO LAW AND THE FACTS OF THE CASE. U/S 43B OF INCOME TAX ACT, 1961 THE AMOUNT IS AN ALLOWABLE EXPENSES AS BECAUSE THE AMOUNT WAS NOT CLAIMED AS EXPENSES IN THE FINANCIAL YEAR 2010 - 11. THE AMOUNT WAS NOT PROVIDED IN THE BOOKS OF ACCOUNTS AS BECAUSE IT WAS DEBITED TO PF CONTRIBUTION IN THE FINANCIAL YEAR 2011 - 12. (6) CONFIRMING THE ADDITION BY DISALLOWING ESI CONTRIBUTION AMOUNTING TO RS 1,97,901/ - IS BAD IN LAW AND CONTRARY TO RU LE AND CIRCUMSTANCES OF THE CASE. U/S 43B OF INCOME TAX ACT 1961 ,THE AMOUNT IS AN ALLOWABLE EXPENSES AS BECAUSE THE AMOUNT WAS NOT CLAIMED AS EXPENSES IN THE FINANCIAL YEAR 2010 - 11. THE AMOUNT WAS NOT PROVIDED IN THE BOOKS OF ACCOUNTS AS BECAUSE IT WAS D EBITED TO ESI CONTRIBUTION IN THE YEAR 2011 - 12. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 3 (7) THE ORDER OF THE LEARNED COMMISSIONER CIT, APPEAL - 2, BHUBANESWAR CONFIRMING THE ADDITION OF AUDIT FEES & LEGAL FEES U/S 40 A(IA) AMOUNTING TO RS 1,03,500/ - AND RS. 70,000/ - RESPECTIVELY MADE BY THE ASSES SING OFFICER IN COMPUTING THE BUSINESS INCOME OF THE APPELLANT IS CONTRARY TO LAW AND THE FACTS OF THE CASE. THE ASSESSEE HAS MAINTAINED BOOKS OF ACC OUNTS AND IS SUBJECT TO TAX AUDIT U/S 44AB OF THE INCOME TAX ACT, 1961. THE AUDIT FEES AND LEGAL EXPENSE HAS BEEN PAID SUBSEQUENTLY BY ACCOUNT P AYEE CHEQUES. (8) THE APPELLANT CRAVES LEAVE TO ADD OR AMEND AN GROUND OF APPEAL. 3. FURTHER THE ASSESSEE HAS TAKEN ADDITIONAL GROUNDS OF APPEAL, WHICH READ AS UNDER : - 1. REGARDING CLAUSE - 4, PAGE - 5 OF THE ASSESSMENT ORDER, THE LEARNED ASSESSING OFFICER HAS DISALLOWED RS. 87,83,626/ - TOWARDS LEAVE ENCASHMENT TO EMPLOYEES ERRONEOUSLY. SIMILAR NATURE OF EXPENSES TO THE TUNE OF RS. 37,41,317/ - HAVE BEEN ALLOWED BY LEARNED CIT APPEALS TO THE ASSESSEE FOR THE A.Y. 2015 - 16 VIDE IT APPEAL NO. - 378/2017 - 18 DATED 27.04.2018. THE COPY OF THE ASSESSMENT ORDER OF LEARNED CIT(APPEALS) IS ENCLOSED HEREWITH VIDE ANNEXURE - 1. 2. REGARDING EMPLOYEES CONTRIBUTION TO PROVIDENT FUND OF RS. 18,29,501/ - CLAUSE - 6, PAGE - 7&8 OF THE ASSESSMENT ORDER, ITMAY BE SEEN THAT THE CONTRIBUTION AMOUNT WAS PAID BEFORE DUE DATE FOR FILLING RETURN OF INCOME U/S 139(1) AND ONLY IN FEW DAYS DELAY FRO M THE DUE DATE I.E. 20 TH OF THE EVERY MONTH. THE SIMILAR CASE HAS BEEN HEARD IN THIS CUTTACK BENCH OF ITAT(ITA NO. 131/CTK/2018) IN FAVOUR OF THE ASSESSEE M/S INDUSTRIAL SECURITY & ALLIED SERVICES PVT. LTD. IN WHICH BRIG. NARAYAN NAYAK IS ONE OF THE DIRECT OR. COPY OF ASSESSMENT ORDER IS ENCLOSED HEREWITH VIDE ANNEXURE - 2. SO THE ADDITION OF RS. 18,29,501/ - MAY BE DELETED. 3. REGARDING NON DEDUCTION OF TDS FROM AUDIT FEES AND LEGAL FEES OF RS. 1,70,500/ - CLAUSE - 9, PAGE - 10 OF THE ASSESSMENT ORDER, 30% OF THE EXPENDITURE MAY BE DISALLOWED AS DECIDED IN CUTTACK BENCH OF ITAT RECENTLY IN CASE OF M/S SRI NILMADHAB BUILDERS PVT. LTD. VS. ITO, WARD - 1(3), BHUBANESWAR, ITA NO - 296/CTK/2018. THE ABOVE ADDITIONAL GROUNDS MAY PLEASE BE CONSIDERED FOR PASSING THE ORD ER. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 4 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 12.11.2012 DECLARING AT TOTAL INCOME OF RS.38 , 99 , 378/ - . THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASS ESSEE FILED DETAILS OF ACCOUNTS AND BILLS AND VOUCHERS MAINTAINED ALONG WITH AUDIT REPORT U/S.44AB OF THE ACT. AFTER EXAMINING THE MATERIALS/DOCUMENTS PRODUCED BY THE ASSESSEE, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN LIABILITY TOWARDS UNSECURED LOAN AMO UNTING TO RS.10,02,312/ - . THERE WAS NO OPENING BALANCE IN THIS REGARD AS ON 01.04.2011. THE ENTIRE AMOUNTS WERE RECEIVED DURING THE IMPUGNED ASSESSMENT YEAR. IN REGARD TO THIS, THE ASSESSEE SUBMITTED DETAILS OF THE EMPLOYEES FROM WHOM ALLEGED ADVANCES/LOAN S IN CASH HAS BEEN OBTAINED. THE DETAILS OF 61 EMPLOYEES WERE SUBMITTED AND IT WAS NOTICED THAT LOANS WERE TAKEN FROM THE EMPLOYEES WERE BELOW RS.20,000/ - . THE AO ASKED TO FILE THE COMPLETE ADDRESS, PAN AND LEDGER ACCOUNT IN HIS BOOKS FROM LOANEE. IN RESPO NSE TO THIS, THE ASSESSEE PRODUCED PHOTOCOPIES OF THE IDENTITY CARDS ISSUED TO 40 NOS. OF EMPLOYEES OUT OF THE 61 PERSONS. THE AO NOTICED THAT THE ASSESSEE DID NOT DISCHARGE FULLY THE ONUS CAST UPON HIM TO ESTABLISH THE IDENTITY OF THE PAYEES AND THE LOANS RECEIVED BY WAY OF CASH. THE AO DOUBTED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN TRANSACTIONS. A SHOW CAUSE NOTICE WAS ISSUED ON 27.02.2015 TO FURNISH THE FURTHER EVIDENCE IN THIS REGARD. IN RESPONSE TO THE SHOW ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 5 CAUSE NOTICE, THE ASSESSE E SOUGHT DOCUMENTS MANY TIMES BUT THE DESIRED INFORMATION WERE NOT FURNISHED. THE AO NOTICED THAT THE ASSESSEE COULD NOT FURNISH THE IDENTITY CARD IN RESPECT OF THE 21 EMPLOYEES AND HE ALSO NOTICED THAT THESE WERE LOW PAID EMPLOYEES AS MENTIONED IN THE SHO W CAUSE NOTICE THEN HOW THEY CAN LEND THE MONEY TO HIS EMPLOYEE AND THE LOANS WERE RECEIVED FROM CASH AND THE ASSESSEE ALSO COULD NOT PRODUCE THE DOCUMENTS LIKE PAN, IT RETURNS ETC. IN SUPPORT OF THE LOANS TAKEN FROM HIS EMPLOYEE. ACCORDINGLY, THE AO ADDED THE TOTAL LOAN AMOUNT OF RS.10,02,312/ - TO THE TOTAL INCOME OF THE ASSESSEE. 5. FURTHER ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS DEBITED IN HIS PROFIT AND LOSS ACCOUNT RS.87,83,626/ - TOWARDS LEAVE ENCASHMENT PAID TO EMPLOYEES. ON PERUSAL OF THE BOOKS OF ACCOUNTS, THE AO NOTICED THAT THE ENTIRE LEAVE ENCASHMENT DEBITED INTO PROFIT AND LOSS ACCOUNT WAS SHOWN AS PROVISION IN THE LIABILITY SIDE OF THE BALANCE SHEET AS ON 31.03.2012. THE DETAILS WERE ASKED TO THE ASSESSEE LIKE CREDIT OF LEAVE, PROCEDURE FOR COMPUTATION OF LEAVE ENCASHMENT AND EVIDENCE IN REGARD TO LEAVE ENCASHMENT AFTER 31.03.2012. IT WAS ALSO NOTICED BY THE AO THAT THERE SIMILAR PROVISIONS WERE ALSO APPEARING IN THE BALANCE SHEET AS ON 31.03.2013. THEREFORE, HE DREW INFERENCE THAT THE SOME PROVISIONS ARE STILL UNPAID TILL THE DATE OF FILING OF THE RETURN OF INCOME AS PER SECTION ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 6 139(1) OF THE ACT I.E. ON 30.09.2012. HE, THEREFORE, CONCLUDED THAT IT IS NOT ALLOWABLE AS PER SECTION 43B(F) OF THE ACT AND SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AND ACCORDINGLY THE AO ADDED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE TO HIS TOTAL INCOME. 6. FURTHER ON SCRUTINY OF ACCOUNTS, THE AO NOTED THAT THE ASSESSEE HAS DEBITED RS.6,77,823/ - TOWARDS AMOUNT OF GRATUITY TO EMPLOYEES IN THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AND IT WAS SHOWN AS PAYABLE IN THE LIABILITY SIDE OF THE BALANCE SHEET. THE ACTUAL DETAILS OF THE PAYMENTS OF GRATUITY WERE NOT PRODUCED BY THE ASSESSEE. THE AO NOTICED THAT IF THE SAM E WAS NOT PAID TO THE APPROVED FUND AS MENTIONED IN SECTION 40A(7) OF THE ACT, THEREFORE, THE SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE FOR FURNISHING EXPLANATION AS TO WHY THE CLAIMED EXPENDITURE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF ACT AND, THE REFORE, IS NOT TO BE DISALLOWED. THEREFORE, THE AO ADDED TO THE TOTAL INCOME TO THE ASSESSEE TO THE TUNE OF RS.6,77,823/ - . 7. FURTHER, ON SCRUTINY OF ACCOUNTS THE AO NOTICED THAT THE ASSESSEE HAS NOT PAID WITHIN THE DUE DATE TO THE STATUTORY LIABILITIES I. E. EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND OF RS.18,29,501/ - AND EPF OF RS.4,81,965/ - AND ESI CONTRIBUTION OF RS.1,97,901/ - . ACCORDINGLY THE AO DISALLOWED THE ENTIRE PAYMENTS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 7 8. FURTHER THE AO NOTICED THA T THE ASSESSEE HAS NOT DEDUCTED TDS ON THE EXPENDITURE INCURRED BY THE ASSESSEE TOWARDS AUDITED FEES AND LEGAL FEES PAID TO THE CHARTERED ACCOUNTANT AND ADVOCATES, AS SUM OF RS.1,03,500/ - AND RS.70,000/ - , RESPECTIVELY, WHICH WAS REQUIRED TO BE DEDUCTED AS PER SECTION 194J OF THE ACT. ACCORDINGLY, THE AO NOTICED THAT THE ASSESSEE HAS VIOLATED THE TDS PROVISIONS. THEREFORE, HE DISALLOWED THE ABOVE PAYMENTS AS PER SECTION 40(A)(IA) OF THE ACT AND COMPLETED THE ASSESSMENT. 9. AGGRIEVED FROM THE ABOVE ADDITIONS, THE ASSESSEE APPEALED BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL OF THE ASSESSEE. 10. FURTHER AGGRIEVED FROM THE CIT(A)S ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUN AL. 11. LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND IN RESPECT OF GROUND NO.1, SUBMITTED THAT THE ASSESSEE HAS TAKEN LOAN FROM HIS EMPLOYEES TOWARDS CASH WHICH WAS BELOW RS.20,000/ - . THE ASSESSEE COMPLIED THE REQUIREMENTS OF THE AO AND ALL THESE WERE NOT GENUINE PERSONS BUT THESE ARE EMPLOYEES. THE EMPLOYEES IDENTITY CARDS WERE PRODUCED BEFORE THE AO AND THE NOMINAL AMOUNT COLLECTED FROM EACH EMPLOYEES WAS TREATED AS A SECURITY MONEY, THEREFORE, IT CANNOT BE TREATED AS UNSECURED LOAN AND THERE IS NO VIOLATION OF SECTION 68 OF THE ACT, 1961. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 8 12. FURTHER, HE SUBMITTED IN RESPECT OF LEAVE ENCASHMENT THAT IT IS A COMPULSORY REQUIREMENT TO GIVE HOLIDAY TO THE EMPLOYEES IF THEY ARE WORKING CONTINUOUSLY I.E. WHOLE WEEK, THEN GET ONE DA Y LEAVE BUT DUE TO SHORTAGE OF SECURITY AND THEIR WILLINGNESS FOR DOING WORKS ON THE HOLIDAY, THEY ARE ENTITLED FOR LEAVE ENCASHMENT PAYMENTS IF THEY HAVE DONE DUTIES ON THE HOLIDAY AND/OR IT WAS ALSO PROVISION MADE, HOWEVER, EMPLOYEES HAVE NOT AVAILED TH E SAME. IT IS A SMALL ORGANIZATION AND SOME OF THE EMPLOYEES HAVE LEFT OUT THE ORGANISATION AFTER SPENDING SOMETIMES. GENERALLY THE EMPLOYEES ENGAGED IN THE ORGANISATION HAVE KEPT THEIR MONEY PENDING WITH THE ORGANISATION AND WHEN THEY GO TO THEIR VILLAGES , THEY COLLECT ALL THE MONEY ON ACCOUNT OF THEIR DUES FROM THE ORGANISATION AT A TIME. IN RESPECT OF GRATUITY AMOUNTING TO RS.6,77,823/ - ACTUALLY IT IS NOT GRATUITY AND IT IS A NATURE OF COMPENSATION PAID TO EMPLOYEES AFTER LEAVING TO THE INSTITUTION FOR S OME PERIOD AND THERE IS NO COMPLAINT AGAINST THE EMPLOYEES AND THESE EMPLOYEES WORKED FOR GOODWILL OF THE ASSESSEE COMPANY, THEREFORE, THEY ARE PAID A LUMPSUM AMOUNT AS A GRATUITY BUT DUE TO MISTAKE OF THE ACCOUNTANT THE WRONG NOMENCLATURE HAS BEEN GIVEN I N THE BOOKS OF ACCOUNTS WHICH HAS SUBSEQUENTLY BEEN PAID TO THE EMPLOYEES. FURTHER IN RESPECT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI CONTRIBUTION, THE ASSESSEE SUBMITTED THAT IT WAS PAID BEFORE FILING OF THE RETURN OF INCOME, THEREFORE, IT SHO ULD BE ALLOWED AS PER SECTION 43B OF ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 9 THE ACT. IN SUPPORT OF HIS CONTENTIONS, LD. AR RELIED ON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF INDUSTRIAL SECURITY AND ALLIED SERVICES PVT. LTD. IN ITA NO.131/CTK/2018 , ORDER DATED 31.07.20 18, WHEREIN THE ASSESSEE IS DIRECTOR OF THE COMPANY. 13. FURTHER IN RESPECT OF NON - COMPLIANCE OF THE TDS, LD. AR SUBMITTED THAT THESE PAYMENTS WERE GENUINE PAYMENTS AND PAYEES HAVE BEEN INCORPORATED IN THEIR INCOME TAX RETURNS, THEREFORE, THESE PAYMENTS MA Y BE ALLOWED. ALTERNATIVELY RELIED ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SRI NILAMADHAB BUILDERS PVT. LTD., ITA NO.296/CTK/2018, ORDER DATED 26.11.2019 AND SUBMITTED THAT THE TRIBUNAL HAS RESTRICTED THE DISALLOWANCE TO 30% AS A GAINST 100% MADE BY THE AO AND CONFIRMED BY THE CIT(A), THEREFORE, THE LD. AR SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO U/S.40(A)(IA) OF THE ACT DESERVES TO BE REDUCED TO 30%. 14. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW AND SUBMITTED THAT IF THE EMPLOYEES ARE LOW PAID EMPLOYEES, THEN HOW THEY CAN BE LOAN/SECURITY TO THE EMPLOYER. THE AUTHORITIES BELOW HAVE RIGHTLY DECIDED THE ISSUE. THE ASSESSEE ALSO COULD NOT FURNISH THE IDENTITY CARD OF SOME EMPLOYEES WHEREAS HE HAS STATED THAT THESE WERE HIS EMPLOYEES. THE ASSESSEE COULD NOT ALSO FURNISH THE PAN NUMBER FROM ALL THE DEPOSITORS. FURTHER IN RESPECT OF LEAVE ENCASHMENT THE ASSESSEE HAS NOT PROVIDED ANY BASIS FOR CALCULATION OF LEAVE AND TO ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 10 WHOM IT HAS BEEN PAID. FURTHER IN RESP ECT OF EMPLOYEES CONTRIBUTION TO PF & ESI, HE STATED THAT THE ACT IS VERY CLEAR, FIRST IT IS CONSIDERED AS AN INCOME U/S.2(24)(X) AND THEREAFTER IF IT IS PAID IN DUE DATE TO THE PROVIDENT FUND THEN HE IS ENTITLED TO DEDUCT TAX AS PER SECTION 36(1)(VA) OF T HE ACT. REGARDING EMPLOYEES CONTRIBUTION THE ASSESSEE HAS NOT FURNISHED ANY DETAILS OR EVIDENCE EITHER BEFORE THE AO OR BEFORE THE CIT(A). IN RESPECT OF ESI PAYMENT, THE ASSESSEE COULD NOT FURNISH ANY DETAILS, THEREFORE, BOTH THE AUTHORITIES HAVE RIGHTLY D ISALLOWED THE ABOVE PAYMENTS. IN THIS REGARD, LD. DR HAS RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT HOTELS LTD. [2019] 410 ITR 417 (DELHI). IT WAS ALSO SUBMITTED BY THE LD. DR THAT THE CASE LAWS RELIED ON BY THE LD. AR OF THE ASSESSEE IS NOT APPLICABLE IN THE PRESENT CASE. HE FURTHER SUBMITTED THAT IN RESPECT OF ADDITION FOR VIOLATION OF TDS PROVISION, THERE IS NO FORCE IN THE ARGUMENTS OF THE LD. AR OF THE ASSESSEE THAT THE AMENDED PROVISION IS APPLICABLE W.E.F.01.04.2015, WHI CH IS NOT RETROSPECTIVE IN NATURE. THEREFORE, THE AUTHORITIES BELOW HAVE RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE AS PER SECTION 40(A)(IA) OF THE ACT. 15. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY BOTH THE SIDES ON THE GROUNDS FILED ORIGINALLY IN FO RM NO.36 AS WELL AS THE ADDITIONAL GROUND FILED BY THE ASSESSEE SUBSEQUENTLY. AFTER HEARING BOTH THE SIDES AND PERUS ING THE ENTIRE MATERIAL AVAILABLE ON RECORD, WITH REGARD TO ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 11 GROUND NO.1, WE FIND THAT THE AO OBSERVED THAT THERE IS AN OUTSTANDING CREDIT BA LANCE OF RS.10,02,312/ - IN HIS BALANCE SHEET. THE LD.AR OF THE ASSESSEE SUBMITTED THAT IT WAS SECURITY DEPOSITS AND IT HAS BEEN TAKEN FROM THE EMPLOYEES WHICH IS BELOW RS.2000/ - . WE OBSERVE FROM THE DETAILS OF THE AMOUNT THAT ALL THE AMOUNTS ARE BELOW RS. 20,000/ - WHICH ARE VERY LOW AND IT HAS BEEN RECEIVED FROM 61 EMPLOYEES OUT OF WHICH 40 EMPLOYEES IDENTITY CARDS WERE PRODUCED BEFORE THE AO. THE AO DID NOT ISSUE ANY NOTICE EITHER U/S.131 OR U/S.133(6) OF THE ACT TO ANY OF THE EMPLOYEES. IF THE AO HAD ANY DOUBT REGARDING THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS, HE COULD HAVE AT LEAST ISSUE D ANY NOTICE EITHER U/S.131 OR U/S.133(6) OF THE ACT TO ANY OF THE EMPLOYEES BUT MERELY STAT ING THAT THE ASSESSEE COULD NOT PRODUCE THE IDENT ITY CARD OF THE 21 EMPLOYEES AND THEY HAD NO PAN AND NOT FILING THEIR INCOME TAX RETURNS, CANNOT BE ACCEPTED . IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT THE UNSECURED LOAN ACCEPTED FROM EMPLOYEES IS VERY NOMINAL AND THAT IS TREATED AS A SECURITY M ONEY KEPT WITH THE EMPLOYER AND PAID BACK WHEN THEY LEFT THE SERVICE. IT WAS ALSO SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT T HE EMPLOYEES IDENTITY CARDS WERE PRODUCED BEFORE THE AO AND THE NOMINAL AMOUNT COLLECTED FROM EACH EMPLOYEES WAS TREATED AS A S ECURITY MONEY, THEREFORE, IT CANNOT BE TREATED AS UNSECURED LOAN AND THERE IS NO VIOLATION OF SECTION 68 OF THE ACT, 1961. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 12 AS WELL AS CONSIDERING THE SUBMISSION OF THE ASSESSEE , WE DIRECT THE AO TO DELETE THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 1 6. WITH REGARD TO ADDITION MADE ON ACCOUNT OF LEAVE ENCASHMENT AND GRATUITY RAISED IN GROUND NO S .2 &3 , AS PER THE LD. AR OF THE ASSESSEE, THE EMPLOYEES ARE WORKING CONTINUOUSLY I.E. WHOLE WEEK, THEN GET ONE DAY LEAVE BUT DUE TO SHORTAGE OF SECURITY AND THEIR WILLINGNESS FOR DOING WORKS ON THE HOLIDAY, THEY ARE ENTITLED FOR LEAVE ENCASHMENT PAYMENTS IF THEY HAVE DONE DUTIES ON THE HOLIDAY AND/OR IT WAS ALSO PROVISION MADE, HOWEVER, EMPLOYEES HAVE NOT AVAILED THE SAME. IT IS A SMALL ORGANIZATION AND SOME OF THE EMPLOYEES HAVE LEFT OUT THE ORGANISATION AFTER SPENDING SOMETIMES. GENERALLY THE EMPLOYEES ENGAGED IN THE ORGANISATION HAVE KEPT THEIR MONEY PENDING WITH THE ORGANISATION AND WHEN THEY GO TO THEI R VILLAGES, THEY COLLECT ALL THE MONEY ON ACCOUNT OF THEIR DUES FROM THE ORGANISATION AT A TIME. WE FOUND SUBSTANCE ON THE ARGUMENTS ADVANCED BY THE LD.AR THAT IT WAS NOT A LEAVE ENCASHMENT AS PER SECTION 43B OF THE ACT AS ENVISAGED. IN THE SMALL ORGANIZAT ION UPTO SOME EXTENT THEY DO NOT FOLLOW THE STRICT RULE FOR LEAVE ETC. IN RESPECT OF GRATUITY AMOUNTING TO RS.6,77,823/ - ACTUALLY , IT WAS THE SUBMISSION OF LD. AR BEFORE US THAT IT IS IN THE NATURE OF COMPENSATION PAID TO EMPLOYEES AFTER LEAVING TO THE INS TITUTION FOR SOME PERIOD AND THERE IS NO COMPLAINT AGAINST THE EMPLOYEES AND THESE EMPLOYEES WORKED FOR GOODWILL OF THE ASSESSEE COMPANY, THEREFORE, ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 13 THEY ARE PAID A LUMPSUM AMOUNT AS A GRATUITY BUT DUE TO MISTAKE OF THE ACCOUNTANT THE WRONG NOMENCLATURE HA S BEEN GIVEN IN THE BOOKS OF ACCOUNTS WHICH HAS SUBSEQUENTLY BEEN PAID TO THE EMPLOYEES. CONSIDERING THE ABOVE, WE ALLOW BOTH THE GROUND S OF APPEAL OF THE ASSESSEE AND DIRECT THE AO TO DELETE THE ADDITION S MADE ON ACCOUNT OF LEAVE ENCASHMENT AND GRATUITY T O EMPLOYEES. 1 7. WITH REGARD TO DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AS RAISED BY THE ASSESSEE IN GROUND NO. 4&5 , WE FIND THAT THE LD. DR BEFORE US RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT HOTEL LTD. (SU PRA) AND SUBMITTED THAT THIS ISSUE SHOULD BE RESTORED TO AO FOR VERIFICATION. AFTER HEARING BOTH THE SIDES, PERUSING THE ENTIRE MATERIALS AVAILABLE ON RECORD AND THE ORDERS OF AUTHORITIES BELOW, WE NOTICED THAT THE ASSESSEE HAS NOT DEPOSITED THE EMPLOYEES CONTRIBUTION WITHIN THE DUE DATE AS SPECIFIED IN THAT PARTICULAR ACT. WE FOUND SUBSTANCE IN THE SUBMISSIONS OF THE LD. DR THAT SECTION 36(1)(VA) OF THE ACT DEALS WITH THE DEDUCTION IN RESPECT OF THE SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH THE PROVISIONS OF SUB - SECTION 2(24)(X) OF THE ACT APPLIES, PROVIDED SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN RELEVANT FUND ON OR BEFORE THE DUE DATE. THE DUE DATE IS DEFINED UNDER THE EXPLANATION TO SECTION 36(1)(VA) OF TH E ACT BY STATING THAT THE DUE DATE REFERRED UNDER THE RELEVANT ACT AND CERTAINLY NOT THE DUE DATE FOR FILING ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 14 THE RETURN. WE ALSO FOUND THAT THIS VERY SIMILAR ISSUE HAS ALSO BEEN DECIDED BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF MILIND GUPTA, ITA NOS.382 &383/CTK/2017, ORDER DATED 27.09.2019, WHEREIN THE TRIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF AO TO EXAMINE THE CONTRIBUTIONS MADE WITH REFERENCE TO THE DATES WHEN THEY WERE ACTUALLY MADE AND GRANT RELIEF TO SUCH OF CLAIM WHICH QUALIFIED FOR SUCH RELIE F IN TERMS OF PREVAILING PROVISIONS OF THE ACT. HOWEVER, LD. AR OF THE ASSESSEE RELYING ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S INDUSTRIAL SECURITY & ALLIED SERVICES PVT. LTD. (SUPRA) . WE HAVE CAREFULLY PERUSED THE ORDER PASS ED BY THE TRIBUNAL IN ABOVE CASE WHEREIN THE ASSESSEE IS ONE OF THE DIRECTOR AND FOUND THAT THE TRIBUNAL AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS RESTORED THE ISSUE TO THE FILE OF AO FOR VERIFICATION AS TO WHETHER THE RECIPIENT HAS DISCLOSED T HE AMOUNT RECEIVED FROM THE ASSESSEE IN HER RETURN OF INCOME OR NOT. IF HE FINDS THAT THE RECIPIENT HAS DISCLOSED THE AMOUNT IN HER RETURN OF INCOME, THEN NO DISALLOWANCE SHOULD BE MADE. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER: - 16. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS PAID RS.3,78,000/ - TO SMT. SUNANDA NAYAK TOWARDS HOUSE RENT BY CHEQUE. IF THE RECIPIENT OF THE AMOUNT SMT. SUNANDA NAYAK HAS DISCLOSED HAS DISCLOSED THE AMOUNT RECEIVED FROM THE ASSESSEE IN HER RETURN OF INCOME AND PAID DUE TAX THEREON, IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD ., 377 ITR 635 (DEL), THEN, NO DISALLOWANCE IN THE HANDS OF THE ASSESSEE IS CALLED FOR. THEREFORE, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 15 WHETHER THE RE CIPIENT SMT. SUNANDA NAYAK HAS DISCLOSED THE AMOUNT RECEIVED FROM THE ASSESSEE IN HER RETURN OF INCOME OR NOT. IF HE FINDS THAT THE RECIPIENT HAS DISCLOSED THE AMOUNT IN HER RETURN OF INCOME, THEN NO DISALLOWANCE SHOULD BE MADE. WITH THESE DIRECTIONS, THE ISSUE IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO RE - ADJUDICATE THE ISSUE. HENCE, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. ACCORDINGLY, T HE ISSUE IN THE PRESENT APPEAL IS SIMILAR TO THE ISSUE DECIDED BY THE TRIBUNAL IN THE CASE CITED SUPRA . THEREFORE, WE RESTORE THIS ISSUE TO THE FILE OF AO TO DECIDE THE SAME AS PER THE CASE LAWS QUOTED BY BOTH THE SIDES . THUS, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 1 8. WITH REGARD TO ADDITION MADE ON ACCOUNT OF ESI CONTRIBUTION AS RAISED IN GROUND NO.6, WE FIND THAT THIS GROUND IS SIMILAR TO THE GROUND DECIDED BY US IN GROUND NO.5 ABOVE, WHEREIN WE HAVE RESTORED THE ISSUE TO THE AO FOR VERIFICATION RELYING ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE C ASE OF MILIND GUPTA (SUPRA). THEREFORE, FOLLOWING THE SAME REASONING AS STATED IN GROUND NO.5, WE ALSO RESTORE THIS ISSUE OF ADDITION MADE ON ACCOUNT OF ESI CONTRIBUTION TO THE FILE OF AO FOR VERIFICATION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19. WITH REGARD TO VIOLATION OF DEDUCTION OF TDS RAISED IN GROUND NO.7 BY THE ASSESSEE , WE FIND THAT THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF NILAMADHAB BUILDERS PVT. LTD. IN ITA NO.296/CTK/2018, ORDER DATED 26.11.2019 HAS RESTRICTED THE DISALLOWANCE TO 30% ON ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 16 ACCOUNT OF NON - COMPLIANCE OF THE TDS , WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER : - 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AS WELL AS THE CASE LAWS CITED BY THE LD. AR OF THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS ACTUALLY CLAIMED EXPENSES OF RS.35,46,286/ - IN THE PROFIT AND LOSS ACCOUNT AS AGAINST THE ADDITION MADE BY THE AO OF RS.39,62,695/ - , WHICH HAS BEEN ACCEPTED BY THE CI T(A) AT PARA 3.2 OF THE APPELLATE ORDER. ON PERUSAL OF BOTH ASSESSMENT AND APPELLATE ORDER, IT IS VIVID THAT THE TOTAL ADDITION MADE BY THE AO INCLUDES RS.4,16,409/ - WHICH WAS NOT CLAIMED BY THE ASSESSEE AS EXPENDITURE IN ITS PROFIT AND LOSS ACCOUNT. THERE FORE, IN OUR CONSIDERED OPINION, THE DISALLOWANCE OF RS.35,46,286/ - UPHELD BY THE CIT(A) IS TO BE HELD AS 100% DISALLOWANCE, WHICH HAS BEEN CLAIMED BY THE ASSESSEE AS EXPENDITURE IN ITS PROFIT AND LOSS ACCOUNT. HOWEVER, AS PER THE AMENDMENT BROUGHT TO THE FINANCE ACT, 2014 IN SECTION 40(A)(IA) OF THE ACT W.E.F. 01.04.2015, IF 100% DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT, THAT WOULD BE RESTRICTED TO 30% ONLY. NOW, THE MOOT QUESTION ARISES BEFORE US AS TO WHETHER THE SAID AMENDMENT IS HAVING THE RETROSPECT IVE EFFECT OR NOT. LD. AR BEFORE US SUBMITTED THAT THE ABOVE PROVISO INSERTED IN THE ACT TO BE A CURATIVE ONE HAVING RETROSPECTIVE EFFECT AND THE ASSESSEE IS ENTITLED THE BENEFIT OF 30% DISALLOWANCE AS AGAINST 100% DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE CIT(A). IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION RENDERED BY THE GAUHATI BENCH OF THE TRIBUNAL IN CASE OF TRIPURA STATE ELECTRICITY CORPORATION LTD. (SUPRA), WHEREIN IT IS HELD AS UNDER : - 6. MR. GOENKA VEHEMENTLY SUBMITS DURING THE COUR SE OF HEARING THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN DISALLOWING ASSESSEE'S IMPUGNED EXPENDITURE CLAIM(S) ON ACCOUNT OF NON - DEDUCTION OF TDS. HIS CASE IS THAT THE ASSESSEE HAD NOT AVAILED ANY TECHNICAL SERVICES FROM ITS PAYEES. THE FACT REMAINS THAT THIS TAXPAYER HAS NOT TENDERED ANY DETAILS OF THE ACTUAL NATURE OF EXPENDITURE. WE THEREFORE FIND NO REASON TO DISAGREE WITH THE LOWER AUTHORITIES' CONCLUSION QUOTING ASSESSEE'S FAILURE IN FILING THE RELEVANT DETAILS. COUPLED WITH THIS, THE FACT ALSO REMA INS THAT THE LEGISLATURE HAS ITSELF AMENDED SECTION 40(A)(IA) VIDE THE FINANCE ACT , 2014 W.E.F. 01.04.2015 RESTRICTING A DISALLOWANCE MADE U/S 40(A)( IA) FROM 100% TO 30% ONLY. THIS TRIBUNAL'S ORDER IN ITA NO. 767/ KOL/2016 DIPAK PARUI VS. JCIT DECIDED ON 20.07.2018 HOLDS THE ABOVE PROVISO INSERTED IN THE ACT TO BE A CURATIVE ONE HAVING RETROSPECTIVE EFFECT. WE THEREFORE, DIRECT THE ASSESSING OFFICER TO RESTRICT THE IMPUGNED DISALLOWANCE TO THE EXTENT OF 30% ONLY. NECESSARY COMPUTATION TO FOLLOW. THIS FIRST SUBSTANTIVE GROUND IS TAKEN AS PARTLY ACCEPTED IN FOREGOING TERMS. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 17 SIMILARLY, THE KOLKATA BEN CH OF THE TRIBUNAL IN THE CASE OF DIPAK PARUI (SUPRA), WHEREIN IT HAS BEEN HELD THAT THE AMENDMENT W.E.F. 01.04.2015 TO BE RETROSPECTIVE EFFECT BEING CURATIVE NATURE AND OBSERVED AS UNDER: - 5. LATTER ISSUE BEFORE US IS THAT OF CORRECTNESS OF SECTION 40 (A)(IA) DISALLOWANCE OF RS.1.79,800/ - OUT OF ASSESSEE'S TOTAL CLAIM OF RS.,3,05,364/ - . HIS ONLY ARGUMENT BEFORE US IS THAT SECTION 40(A)(IA) AS AMEND ED BY FINANCE ACT 2014 W.E.F. 01.04.2015 PRESCRIBING SUCH DISALLOWANCE TO BE RESTRICTED TO 30% ONLY THAN THE ENTIRE AMOUNT OF RS.1,79,800/ - ; APPLIES WITH RETROSPECTIVE EFFECT. LEARNED DEPARTMENTAL REPRES ENTATIVE VEHEMENTLY OPPOSES THIS LEGAL PLEA. HE PLEADS THAT THE SAID PROVISO DOES NOT CARRY ANY RETROSPECTIVE EFFECT. WE FIND NO FORCE IN REVENUE'S INSTANT ARGUMENTS AS A COORDINATE BENCH OF THIS TRIBUNAL IN SHRI RAJENDRA YADAV IN ITA NO.895/JP/2012 DECIDE D ON 29.01.2016 ALREADY CONCLUDES THE ABOVE AMENDMENT W.E.F. 01.04.2015 TO BE RETROSPECTIVE EFFECT BEING CURATIVE IN NATURE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RESTRICT THE IMPUGNED DISALLOWANCE TO 30% ONLY TO BE FOLLOWED BY NECESSARY ITA NO.767/ KOL/2016 DIPAK PARUI A.Y.2011 - 12 3 COMPUTATION AS PER LAW. THIS LATTER SUBSTANTIVE GROUND IS TREATED AS PARTLY ACCEPTED IN ABOVE TERMS. FURTHER, THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SMT. KANTA YADAV (SUPRA) WHILE CONSIDERING THE SIMILAR ISSUE HAS HELD AS UNDER : - 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND FIND THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT JAIPUR BENCH IN THE CASE OF SHRI RAJENDRA YADAV VS. ITO AND SMT. SONU KHANDELWAL VS. ITO. IN THESE ORDERS IT WAS HELD THAT THE DISALLOWANCE U/S 40(A)(IA) TO BE RESTRICTED TO 30% OF THE ADDITION. IN THESE ORDERS THE TRIBUNAL HAS CONSIDERED THE AMENDED PROVISIONS OF SE CTION 40(A)(IA) OF I.T. ACT. IN THESE ORDERS THE ASSESSMENT YEAR'S INVOLVE WAS 2007 - 08 AND 2008 - 09. IN ITA NO. 6312/ DEL/2016 SMT. KANTA YADAV VS. ITO THE PRESENT APPEAL THE ASSESSMENT YEAR IS 2012 - 13 . THEREFORE FACTS ARE IDENTICAL. IN THIS VIEW OF THE MATTER AND FOLLOWING THE ABOVE DECISIONS OF JAIPUR BENCH, WE SET ASIDE AND MODIFY THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 30% OF THE TOTAL ADDITIO N MADE ON ACCOUNT OF DEDUCTION OF TDS U/S 40(A)(IA) OF THE ACT. 8. FROM THE ABOVE OBSERVATIONS OF THE DIFFERENT BENCHES OF THE TRIBUNAL, WE FIND THAT THE 100% DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT HAS BEEN DIRECTED TO BE RESTRICTED TO THE EXTENT OF 30% ONLY GIVING RETROSPECTIVE EFFECT. LD. DR BEFORE US SUBMITTED THAT THERE IS NO MENTION IN THE AMENDMENT THAT THE SAME SHALL BE APPLIED RETROSPECTIVELY, HOWEVER, IN OUR CONSIDERED OPINION, I F A STATUTE IS CURATIVE OF THE PREVIOUS LAW, RETROSPECTIVE OPER ATION IS GENERALLY INTENDED. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA EXPORT COMPANY, [2018] ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 18 93 TAXMANN.COM 51 (SC), WHILE DECIDING THE ISSUE AS TO W HETHER AMENDMENT MADE BY FINANCE ACT, 2010, TO PROVISIONS OF SECTION 40(A)(IA) IS CURATIVE IN NATURE AND IT SHOULD BE GIVEN RETROSPECTIVE OPERATION FROM DATE OF INSERTION OF SAID PROVISION I.E. WITH EFFECT FROM ASSESSMENT YEAR 2005 - 06, HAS HELD AS UNDER : - THE PURPOSE FOR BRINGING SAID AMENDMENT IS TO ENSURE TAX COMPLIANCE. THE FACT THAT THE INTENTION OF THE LEGISLATURE WAS NOT TO PUNISH THE ASSESSEE IS FURTHER REFLECTED FROM A BARE READING OF THE PROVISIONS OF SECTION 40(A)(IA). IT ONLY RESULTS IN SHIFTING OF THE YEAR IN WHICH THE EXPENDITURE CAN BE CLAIMED AS DEDUCTION. IN A CASE WHERE THE T AX DEDUCTED AT SOURCE WAS DULY DEPOSITED WITH THE GOVERNMENT WITHIN THE PRESCRIBED TIME, THE SAID AMOUNT CAN BE CLAIMED AS A DEDUCTION FROM THE INCOME IN THE PREVIOUS YEAR IN WHICH THE TDS WAS DEDUCTED. HOWEVER, WHEN THE AMOUNT DEDUCTED IN THE FORM OF TDS WAS DEPOSITED WITH THE GOVERNMENT AFTER THE EXPIRY OF PERIOD ALLOWED FOR SUCH DEPOSIT THEN THE DEDUCTIONS CAN BE CLAIMED FOR SUCH DEPOSITED TDS AMOUNT ONLY IN THE PREVIOUS YEAR IN WHICH SUCH PAYMENT WAS MADE TO THE GOVERNMENT. [PARA 16] 9. ON CAREFUL PER USAL OF THE AMENDMENT BROUGHT TO THE SECTION 40(A)(IA) OF THE ACT BY THE FINANCE ACT, 2014 W.E.F. 01.04.2015, IT IS CLEAR THAT THE INTENT OF LEGISLATURE TO REDUCE THE HARDSHIP, IT IS PROPOSED THAT IN CASE OF NON - DEDUCTION OR NON - PAYMENT OF TDS ON PAYMENTS MADE TO RESIDENTS AS SPECIFIED IN SECTION 40(A)(IA) OF THE ACT, THE DISALLOWANCE SHALL BE RESTRICTED TO 30% OF THE AMOUNT OF EXPENDITURE CLAIMED. THE HONBLE SUPREME COURT IN THE CASE OF ALLIED MOTORS (P) LTD. [1997] 224 ITR 677 (SC) HAS HELD THAT AMENDMEN T WAS REMEDIAL IN NATURE, DESIGNED TO ELIMINATE UNINTENDED CONSEQUENCES WHICH MAY CAUSE UNDUE HARDSHIP TO THE ASSESSEE AND WHICH MADE THE PROVISION UNWORKABLE OR UNJUST IN A SPECIFIC SITUATION. FINALLY, AFTER CONSIDERING VARIOUS CASE LAWS, THE HONBLE SUP REME COURT HELD THAT THE PURPOSE OF AMENDMENT WOULD NOT SERVE ITS OBJECT IN SUCH A SITUATION UNLESS, IT IS CONSTRUED AS RETROSPECTIVE AFTER OBSERVING AS UNDER : - 10. THEREFORE, IN THE WELL - KNOWN WORDS OF JUDGE LEARNED HAND, ONE CANNOT MAKE A FORTRESS OUT OF THE DICTIONARY; AND SHOULD REMEMBER THAT STATUTES HAVE SOME PURPOSE AND OBJECT TO ACCOMPLISH WHOSE SYMPATHETIC AND IMAGINATIVE DISCOVERY IS THE SUREST GUIDE TO THEIR MEANING. IN THE CASE OF R.B. JODHA MAL KUTHIALA V. CIT [1971] 82 ITR 570 , THIS COURT SAID THAT ONE SHOULD APPLY THE RULE OF REASONABLE INTERPRETATION. A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, A PRO VISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETATION, REQUIRES TO BE TREATED AS RETROSPECTIVE IN OPERATION SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 19 11. THIS VIEW HAS BEEN ACCEPTED BY A NUMBER OF HIGH COURTS. IN THE CASE OF CIT V. CHANDULAL VENICHAND [1994] 209 ITR 7/ 73 TAXMAN 349 , THE GUJARAT HIGH COURT HAS HELD THAT THE FIRST PROVISO TO SECTION 43B IS RETROSPECTIVE AND SALES - TAX FOR THE LAST QUARTER PAID BEFORE THE FILING OF THE RETURN FOR THE ASSESSMENT YEAR IS DEDUCTIBLE. THIS DECISION DEALS WITH THE ASSESSMENT YEAR 1984 - 85. THE CALCUTTA HI GH COURT IN THE CASE OF CIT V. SRI JAGANNATH STEEL CORPN. [1991] 191 ITR 676 , HAS TAKEN A SIMILAR VIEW HOLDING THAT THE STATUTORY LIABILITY FOR SALES - TAX ACTUALLY DISC HARGED AFTER THE EXPIRY OF THE ACCOUNTING YEAR IN COMPLIANCE WITH THE RELEVANT STATUTE IS ENTITLED TO DEDUCTION UNDER SECTION 43B. THE HIGH COURT HAS HELD THE AMENDMENT TO BE CLARIFICATORY AND, THEREFORE, RETROSPECTIVE. THE GUJARAT HIGH COURT IN THE ABOVE CASE HELD THE AMENDMENT TO BE CURATIVE AND EXPLANATORY AND HENCE RETROSPECTIVE. THE PATNA HIGH COURT HAS ALSO HELD THE AMENDMENT INSERTING THE FIRST PROVISO TO BE EXPLANATORY IN THE CASE OF JAMSHEDPUR MOTOR ACCESSORIES STORES V. UNION OF INDIA [1991] 189 ITR 70/ 54 TAXMAN 521 . IT HAS HELD THE AMENDMENT INSERTING FIRST PROVISO TO BE RETROSPECTIVE. THE SPECIAL LEAVE PETITION FROM THIS DECISION OF THE PATNA HIGH COURT WAS D ISMISSED. THE VIEW OF THE DELHI HIGH COURT, THEREFORE, THAT THE FIRST PROVISO TO SECTION 43B WILL BE AVAILABLE ONLY PROSPECTIVELY DOES NOT APPEAR TO BE CORRECT. AS OBSERVED BY G.P. SINGH IN HIS PRINCIPLES OF STATUTORY INTERPRETATION, FOURTH EDN., PAGE 291, 'IT IS WELL - SETTLED THAT IF A STATUTE IS CURATIVE OR MERELY DECLARATORY OF THE PREVIOUS LAW RETROSPECTIVE OPERATION IS GENERALLY INTENDED'. IN FACT THE AMENDMENT WOULD NOT SERVE ITS OBJECT IN SUCH A SITUATION UNLESS IT IS CONSTRUED AS RETROSPECTIVE. THE V IEW, THEREFORE, TAKEN BY THE DELHI HIGH COURT CANNOT BE SUSTAINED. 10. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF THE TRIBUNAL AS WELL AS HONBLE SUPREME COURT, WE DIRECT THE AO TO RESTRICT THE 100% DISALLOWANCE CONFIRMED BY THE CIT(A) TO THE EXTENT OF 30% ONLY TAKING INTO ACCOUNT THE ACTUAL CLAIM OF THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT. WE ORDER ACCORDINGLY. THUS, THE SOLE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. RESPECTFULLY FOLLOWING THE ABOVE OBSERVATIONS OF THE TRIBUNAL, WE DIREC T THE AO TO RESTRICT THE DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT ON ACCOUNT OF NON - COMPLIANCE OF TDS TO 30%. THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 20 20 . THUS, THE APPEAL OF THE ASSESSEE IN ITA NO.30/CTK/2017 IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. 2 1 . NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO.230/CTK/2019, WHEREIN THE SOLE ISSUED INVOLVED IS WITH REGARD TO LEVY OF PENALTY U/S.27 1 (1)(C) OF THE ACT. 2 2 . AT THE OUTSET, LD. ASSESSEE REPRESENTATIVE (AR) PLACING RELIANCE O N THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) SUBMITTED THAT THE AO ISSUED NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT ON 31. 10 .201 7 , WHEREIN BOTH THE ALLEGATIONS HAVE BEEN NOTED AND THE AO HAS NOT SHOWN ANY CLEAR INDICATION TO THE ASSESSEE THAT ON WHICH ALLEGATION HE INTENDS TO IMPOSE PENALTY U/S.271(1)(C) OF THE ACT. LD. AR CONTENDED THAT EVEN IN THE ASSESSMENT ORDER THERE IS NO IOTA THAT ON WHICH ALLEGATION THE AO INTENDS TO IMPOSE THE PENALTY ON THE ASSESSEE EITHER ON THE ALLEGATION ON CONCEALMENT OF INCOME OR ON THE ALLEGATION OF FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, ON BOTH THE COUNTS PENALTY IMPOSED BY THE AO U/S.271(1)(C) OF THE ACT AND CONFIRMED BY THE CIT(A) CANN OT BE HELD AS SUSTAINABLE. 2 3 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAS NOT DECLARED THE INCOME RECEIVED FROM CONSULTANCY FEES AND INCOME FROM OTHER SOURCES IN HER RETURN OF INCOME FURNISHED BE FORE THE DATE OF SEARCH WHICH ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 21 MEANS THE ASSESSEE HAS CONCEALED HIS INCOME AND, THEREFORE, ATTRACTS PENALTY U/S.271(1)(C) OF THE ACT. 24 . AFTER CONSIDERING THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AS WE LL AS ORDERS OF LOWER AUTHORITIES, WE FOUND THAT THE PENALTIES HAVE LEVIED BY THE AO ON THE ADDITION MADE ON ACCOUNT OF LEAVE ENCASHMENT PAID TO THE EMPLOYEES AND ADDITION MADE U/S.68 OF THE ACT, WHICH WE HAVE DELETED THE SAME WHILE DECIDING THE QUANTUM AP PEAL OF THE ASSESSEE. WHEN THE QUANTUM ADDITION UPON WHICH THE AO HAS IMPOSED THE PENALTY HAVE BEEN DELETED BY US, THEREFORE, THE LEVY OF PENALTY ON THE ABOVE TWO ADDITIONS HAS NO LEGS TO STAND AND ACCORDINGLY, WE DELETE THE SAME. 25 . THUS, WE ALLOW THE A PPEAL OF THE ASSESSEE IN ITA NO.230/CTK/2019. 26 . NOW, A PROCEDURAL ISSUE COMES BEFORE US THAT THOUGH THE HEARING OF THE PRESENT APPEAL S W ERE CONCLUDED ON 25 .0 2 .2020, HOWEVER, THIS ORDER IS BEING PRONOUNCED MUCH AFTER THE EXPIRY OF 90 DAYS FROM THE DATE OF CONCLUSION OF HEARING. WE FIND THAT RULE 34(5) OF THE INCOME 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 FOLLOWING MANNERS: - (A) THE BENC H MAY PRONOUNCE THE ORDER IMMEDIATELY UPON THE CONCLUSION OF HEARING . ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 22 (B) IN CASE WHERE THE ORDER IS NOT PRONOUNCED IMMEDIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A DATE OF PRONOUNCEMENT. (C) IN A CASE WHERE NO DATE OF PRONOUNCEMENT 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 EXTRAORDINARY C IRCUMSTANCES OF THE CASE, THE BENCH SHALL FIX A FUTURE DAY FOR PRONOUNCEMENT OF THE ORDER, AND SUCH DATE SHALL NOT ORDINARILY 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. AS SUCH, OR DINARILY, 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 ITSELF. THIS RULE WA S INSERTED AS A RESULT OF DIRECTIONS OF HONBLE HIGH COURT IN THE CASE OF SHIVSAGAR VEG RESTAURANT VS ACIT (2009) 319 ITR 433 (BOM), WHEREIN, IT WAS, INTER ALIA , OBSERVED AS UNDER: WE, THEREFORE, DIRECT THE PRESIDENT 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 GUIDELINE S 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, SUPPLIED BY US NOW),ALL THE REVISIONAL AND APPELLA TE 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 RULES SO FRAMED, AS A RESULT OF THESE DIRECTIONS, THE EXPRESSION ORDINARILY HAS BEEN INSERTED IN THE REQUIREMENT TO PRONOUNCE THE ORDER WITHIN A PERIOD OF 90DAYS. THE QUESTION THEN ARISES WHETHER THE ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 23 PASSING OF THIS ORDER, BEYOND NINETY DAYS, WAS NECESSITATED BY ANY EXTRAORDINARY CIRCUMSTANCES. 27 . WE ALSO FIND THAT THE AFORESAID ISSUE HA S BEEN ANSWERED BY A COORDINATE BENCH OF THE TRIBUNAL VIZ; ITAT, MUMBAI F BENCH IN DCIT, CENTRAL CIRCLE - 3(2), MUMBAI VS JSW LIMITED & ORS (ITA NO.6264/MUM/18 DATED 14.5.2020, WHEREIN, IT WAS OBSERVED AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PR EVAILING 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 EXTENDED FROM TIME TO TIME. AS A MAT TER 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 ACCOUNT 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 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 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, BESID ES 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 2020 CONTINUES TO OPERATE SHAL L 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 INDI A BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONA VIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AND FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED AP PROPRIATE, FOLLOWING THE DUE PROCEDURE.... THE TERM FORCE MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 24 NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVER NMENT 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 LOCKDOWN WAS IN FORCE CAN BE ANYTHING BUT AN ORDINARY PERIO D. 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, DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE S HOULD 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 PRONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN TH E 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 INCONSONANCE WITH THE LETTER AND SPIRIT OF R ULE 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 SYSTEM. UNDOUBTEDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2 017) 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 15TH APRIL2020, HELD THAT DIREC TED 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 STAND EXTENDED ACCORDINGLY. THE EXTRAORDINARY STEPS TAKEN SUO MO TU 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 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 APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 9 0 - DAY TIME - LIMIT FOR 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. 28 . RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL DECISION OF HONBLE BOMB AY HIGH COURT AND THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT THE PERIOD DURING WHICH THE LOCK DOWN WAS IN FORCE SHALL STAND EXCLUDED FOR THE PURPOSE OF WORKING OUT THE TIME LIMIT FOR ITA NO. 3 0 /CTK/201 7 & ITA NO.230/CTK/2019 25 PRONOUNCEMENT OF ORDERS, AS ENVISAGED IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. 29 . IN THE RESULT, ITA NO.30/CTK/2017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND ITA NO.230/CTK/2019 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/06 / 20 20 . SD/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 05/06 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, CUTTACK 1. / THE APPELLANT - BRIG. NARAYAN NAYAK, PROP: M/S INDUSTRIAL SECURITY & ALLIED SERVICES, F3 - F5, ID MARKET, IRC VILLAGE, NAYAPALLI, BHUBANESAR - 751015 2. / THE RESPONDENT - DCIT, CIRCLE - 5(1), BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//