The DCIT,(OSD),Range-1, Ahmedabad V. M/s. CLP Power Pvt. Ltd., Ahmedabad

ITA 326/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0941 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEELIPKUMAR
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Question of law; Revenue expenditure; Capital expenditure
• Section: 271(1)(c); 143(3); 274; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 326/AHD/2016 (ASSESSMENT YEAR: 2008-09) DCIT CIR-1(1)(2), AHMEDABAD V/S M/S. CLP POWER LTD. 6 TH FLOOR, CHANAKYA, ASHRAM ROAD, AHMEDABAD-380009 (APPELLANT) (RESPONDENT) PAN: AAACP 6900B APPELLANT BY : SHRI DEELIP KUMAR, SR. D. R. RESPONDENT BY : SHRI S.N. SOPARKAR, A.R. ( )/ ORDER DATE OF HEARING : 19 -02-202 0 DATE OF PRONOUNCEMENT : 01- 06-2020 PER WASEEM AHMED, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)- 1, AHMEDABAD DATED 27.11.2015 PERTAINING TO A.Y. 20 08-09. ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 2 2. THE ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS T HAT THE LEARNED CIT (A)ERRED IN DELETING THE PENALTY AMOUNTING TO RS. 58,95,999/- I MPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRE SENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF OPERATING AN D MAINTAINING OF POWER PROJECTS. THE ASSESSMENT UNDER SECTION 143(3) OF TH E ACT, WAS COMPLETED AFTER TREATING CERTAIN REVENUE EXPENSES CLAIMED BY THE AS SESSEE AS CAPITAL IN NATURE AMOUNTING TO RS. 1,63,76,975/-VIDE ORDER DATED 28 TH DECEMBER 2010. THE AO ACCORDINGLY IN THE ASSESSMENT ORDER INITIATED THE P ENALTY PROCEEDING FOR FURNISHING INACCURATE PARTICULARS OF INCOME UNDER S ECTION 271(1)(C) R.W.S. 274 OF THE ACT. THE AO SUBSEQUENTLY AFTER GIVING OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE LEVIED THE PENALTY FOR RS. 58,95,999/- UND ER THE PROVISION OF SECTION 271(1)(C) OF THE ACT. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT (A) WHO DELETED PENALTY IMPOSED BY THE AO BY OBSERVING THAT THE ASS ESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME DELIBERATELY. 5. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE REVENUE IS IN APPEAL BEFORE US. 6. BOTH THE LEARNED DR AND THE AR BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AS FAVOURABLE TO THEM. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD BEFORE US. AT THE OUT SET WE NOTE THAT THE IDENTICAL ISSUE IN THE OWN CASE OF THE ASSESSEE FOR THE ASSES SMENT YEAR 2007-08 HAS BEEN DECIDED BY THE ITAT IN THE FAVOUR OF THE ASSESSEE I N ITA NO. 1128/AHD/2015VIDE ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 3 ORDER DATED 4 TH OCTOBER 2019. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CONTROVERSY RAISED ON BEHALF OF THE REVENUE IS ON MAINTAINABILITY OF PENALTY ON DISALLOWANCE OF EXPENDITURE CLAIMED AS REVENUE EXPENDITURE WHICH WAS HELD TO BE CAPITAL EX PENDITURE BY THE AO. ON PERUSAL OF THE ORDER OF THE CIT(A), WE OBSERVE THAT THE CIT(A) HAS TAKEN NOTE OF VARIOUS CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE AND HA S RECORDED HIS FINDINGS IN FAVOUR OF THE ASSESSEE AS UNDER: '5. I HAVE PERUSED THE FACTS OF THE CASE AS ENUMERA TED BY A.O. I HAVE PERUSED THE CASE LAWS RELIED ON BY A.O.. AFTER CAREFUL CONS IDERATION OF FACTS, SUBMISSION AND CONTENTION OF A.O. GROUND WISE ADJUDICATION IS AS FOLLOWS: ALL THE GROUNDS ARE INTERLINKED AND AGAINST THE IMP OSITION/LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THE APPELLANT RAISED GROUNDS BOTH ON TECHNICAL ISSUE AS WELL AS ON MERIT. THERE ARE CERTAIN UNDISPUTED FACT S, WHICH REQUIRES CONSIDERATION BEFORE ADJUDICATION, THESE ARE AS FOL LOWS: (I) THE APPELLANT DURING PREVIOUS YEAR DEBITED IN P ROFIT & LOSS ACCOUNT AND CLAIMED EXPENSES OF RS, 4,75,07,667/- AS REVENUE EX PENSES. THE A.O. AFTER OBSERVING TAX AUDIT REPORT IN FORM NO. 3CD AT CL. 8 (A) THAT APPELLANT'S BUSINESS IS ' THE ASSESSEE IS ENGAGED IN INTER ALIA IN THE BUSI NESS OF DEVELOPMENT OF POWER PROJECT AND OPERATION AND MAINTENANCE OF POWER PROJ ECTS' BUT REFLECTED INCOME FROM 'OPERATION & MAINTENANCE FEES & OTHER INCOME' CALLED FOR DETAILS OF SUCH EXPENSES. AS PER PARA 6 OF ASST. ORDER DT. 27/11/20 08 U/S. 143(3) OF THE ACT, THE COMPLETE DETAIL ABOUT SUCH EXPLANATION IN THE FORM OF PROFESSIONAL FEES, TRAVELLING EXPENSES, TENDER EXPENSES IN RESPECT OF FIVE PROJECTS WAS MADE AVAILABLE. THE APPELLANT WAS QUESTIONED ABOUT ITS A LLOW-ABILITY. THE APPELLANT FILED DETAILED (PROJECT WISE) EXPLANATION BEFORE A. O. VIDE ORDER DT. 14/11/2009 (PARA 7 OF THE IMPUGNED ASST. ORDER DT. 27/11/2009). THE A.O. REJECTED APPELLANT'S EXPLANAT ION WITH PLACING RELIANCE ON HON'BLE GUJARAT HIGH COURT ORDER IN THE CASE OF AMB ICA MILLS LTD. 236 ITR 921, SHRI DIGVIJAY CEMENT CO. LTD. 153 ITR 253, SLM MANE KLAL INDUSTRIES LTD. 107 ITR 133 AND HON'BLE MADRASS HIGH COURT ORDER IN THE CAS E OF CID PARRY (INDIA) LTD. 257 ITR 253 AND HELD THAT 'ALTHOUGH THE AUDITORS MA Y HAVE MENTIONED IN THE 3CD REPORT, OR THAT MEMORANDUM OF ASSOCIATION MAY S PEAK OF THE ACTIVITY AS ONE OF THE OBJECTS NONE THE LESS THE FACT REMAINS THAT THE PROPOSED NEW PLANT WAS NOT BUSINESS ACTIVITY BEING CARRIED ON BY THE ASSES SEE'. THE A.O. DISALLOWED CLAIM OF REVENUE OF RS. 47507667 AS CAPITAL EXPENSE S AND INITIATED PENALTY U/S. 271(1)(C)OF THE ACT FOR FURNISHING INACCURATE PARTI CULARS OF INCOME. (II) LD. CIT(A)-VI AHMEDABAD VIDE ORDER DT. 16/12/2 010 AGAINST SUCH ORDER DT. 27/11/2009 U/S. 143(3) OF THE ACT CONSIDERED APPELL ANT'S EXPLANATION THAT (A) AS PER TAX AUDIT REPORT THERE IS NO CHANGE IN T HE NATURE OF BUSINESS OF THE ASSESSEE AS COMPARED TO EARLIER YEARS. A COPY OF OB JECTIVE AND MEMORANDUM OF ASSOCIATION (OCMA) WAS SUBMITTED. ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 4 (B) HON'BLE GUJARAT HIGH COURT IN THE CASE OF GMDC LTD. 314 ITR 322 AND HON'BLE GAUHATI HIGH COURT IN THE CASE OF ASSAM AES BESTOS LTD. 263 ITR 357 HELD SUCH EXPENSES AS REVENUE EXPENSES. (C) THE APPELLANT RELIED ON (I) KESORAM INDUSTRIES & COTTON MILLS LTD. VS. CIT [1992] 196 ITR 845 (CAT) (II) CIT VS. PRIYA VILLAGE ROADSHOWS LTD. [2009] 18 5 TAXMAN 44 (DELHI) (III) INDO RAMA SYNTHETICS (I) LTD. VS. CIT[2009] 1 85 TAXMAN 27(DELHI) (IV) CIT VS. ESCORTS AUTO COMPONENTS LTD. [2010] 32 3 ITR 11 (PUNJ & HAR.) (D) THE A.O. HAS NOT GRANTED DEPRECIATION AN SUCH C APITAL EXPENDITURE. (E) THE SAID EXPENDITURE HAD A DIRECT AND PERMANENT NEXUS WITH THE EXISTING BUSINESS OPERATION AND THIS LOSS IS INHERENT IN THE CARRYING ON OF THE BUSINESS AND IS DIRECTLY CONNECTED WITH AND INCIDENTAL TO IT . THE LD. CIT(A) THEREFORE HELD AGAINST APPELLANT. TH E OPERATION PART HAD ALREADY BEEN DISCUSSED AT PARA 4D ABOVE. (III) HON'BLE ITAT AHMEDABAD ALSO DECIDED THE MATTE R AS DISCUSSED AT PARA 4E ABOVE. (IV) THE APPELLANT SUBMITTED A DETAILED REPLY DURIN G PENALTY PROCEEDINGS AS DISCUSSED ABOVE AT PARA 4A. (V) THE APPELLANT SUBMITTED A COPY OF HON'BLE GUJAR AT HIGH COURT ORDER DT. 09/12/2014 IN THE CASE OF DY.CIT VS. GUJARAT NARMAD A VELLOY FERTILIZERS CO. LTD. (TAX APPEAL NO. 447 OF 2000 WITH APPEAL NO. 522 OF 2009 WITH TAX APPEAL NO. 2033 OF 2009) WHERE ON THE SIMILAR FACTS AS THAT OF APPELLANT, HON'BLE GUJARAT HIGH COURT HELD THAT SUCH EXPENDITURE FOR EXPANSION OF BUSINESS, PROJECTS WHICH WERE NOT MATERIALIZED ARE REVENUE EXPENSES. IT WAS CONTENDED THAT THIS ORDER OF HON'BLE GUJARAT HIGH COURT CONSIDERED RATIO OF VARI OUS CASE LAWS AS CONSIDERED BY A.O. IT WAS EMPHASIZED THAT THERE ARE TWO DIFFER ENT OPINIONS ON THE SAME ISSUE, HENCE ON THIS ISSUE PENALTY IS NOT EXIGIBLE. I AM INCLINED WITH APPELLANT THAT ON THE FACTS & CI RCUMSTANCES AS THAT OF APPELLANTS, THE PENALTY U/S. 271(1)(C) OF THE ACT I S NOT EXIGIBLE ON MANY ACCOUNTS DULY SUPPORTED BY LEGAL PREPOSITION. THESE ARE AS FOLLOWS: (I) THE APPELLANT CLAIMED SUCH EXPENSES ON THE BASI S OF AUDITED ACCOUNTS AND TAX AUDIT REPORT WHICH HAS NOT BROUGHT OUT THESE EXPEND ITURE AS CAPITAL IN NATURE. IT IS THEREFORE THE BONAFIDE FOR THE CLAIM OF SUCH EXP ENDITURE CANNOT BE DOUBTED OR QUESTIONED. (II) ALL THE DETAILS & MATERIAL FACTS WERE EITHER D ISCLOSED OR SUBMITTED BEFORE A.O. AS AND WHEN ASKED FOR. NONE OF THESE EXPENSES WERE FOUND BOGUS OR EXCESSIVE. THESE GENUINE EXPENSES WERE DISALLOWED BEING HELD A S CAPITAL IN NATURE. THIS PREPOSITION CANNOT LEAD TO SATISFACTION THAT APPELL ANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME. ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 5 (III) THERE ARE TWO OPINIONS ON THIS ISSUE, EVEN HO N'BLE GUJARAT HIGH COURT'S LATEST ORDER IN THE CASE OF GNFC (SUPRA) AS RELIED ON IS IN FAVOUR OF APPELLANT. THIS REFLECTS THAT ISSUE IS CONTENTIOUS IN NATURE A ND DEBATABLE. IN VIEW OF LATEST ORDER OF HON'BLE GUJARAT HIGH COURT, THE RATIO IS B INDING ON LOWER APPEAL AUTHORITIES. IT IS THEREFORE DESPITE HON'BLE ITAT C ONSIDERED THE ISSUE AGAINST APPELLANT, THE PENALTY IS NOT EXIGIBLE. (IV) APART FROM RATIO OF HON'BLE SUPREME COURT ORDE R IN THE CASE OF RELIANCE PETRO PRODUCT LTD. (SUPRA), THERE ARE PLETHORA OF J UDGEMENT WHICH DIRECTLY DEALT WITH THE ISSUE THAT IF ANY OF THE REVENUE EXPENSES CLAIMED IS TREATED AS CAPITAL EXPENDITURE THEN PENALTY U/S. 271(1)(C) OF THE ACT IS NOT EXIGIBLE ON SUCH AMOUNT. IT IS THEREFORE, THE SATISFACTION SO DRAWN BY A.O. AND PENALTY SO LEVIED OF RS. 1,59,91,080 IS NEITHER JUSTIFIED NOR SUSTAINABLE. T HE A.O IS DIRECTED TO DELETE THE PENALTY SO IMPOSED. THE APPELLANT GETS RELIEF ACCOR DINGLY. ALL THE GROUNDS ARE TREATS AS ALLOWED.' 6. AS NOTED ABOVE, THE CIT(A) HAS OBSERVED THAT THE EXPENDITURE INCURRED BY THE ASSESSEE HAS A DIRECT AND PROXIMATE NEXUS WITH THE EXISTING BUSINESS OPERATIONS AND THE LOSS INCURRED WAS INHERENT IN CARRYING ON OF THE BU SINESS. THE GENUINENESS OF EXPENSES INCURRED HAS NOT BEEN DOUBTED PER SE. WHAT IS THE S UBJECT MATTER OF CONTROVERSY IS THE NATURE OF EXPENDITURE THAT IS WHETHER THE EXPENDITU RE INCURRED WOULD ACQUIRE THE CHARACTER OF CAPITAL EXPENDITURE OR A REVENUE EXPEN DITURE. THE CIT(A) HAS DEMONSTRATED IN ITS ORDER THAT THE ISSUE IS SUFFICIENTLY DEBATAB LE AND THERE IS SUFFICIENT ROOM FOR ENTERTAINING A DIFFERENT VIEW. NEEDLESS TO SAY, THE CONCLUSION DRAWN IN THE QUANTUM PROCEEDINGS WOULD NOT AUTOMATICALLY APPLY TO THE PE NALTY PROCEEDINGS WHICH ARE DISTINCT IN CHARACTER. THE ASSESSEE IS ENTITLED TO DEMONSTRA TE ITS BONAFIDE TOWARDS CLAIM OF EXPENDITURE IN PENALTY PROCEEDINGS. IT IS TRITE THA T EVERY DISALLOWANCE OF CLAIM CANNOT LEAD TO AS AN AUTOMATIC CONSEQUENCE IN THE FORM OF PENALTY. THE CONFIRMATION OF ADDITION/DISALLOWANCE IN QUANTUM PROCEEDINGS IS NOT CONCLUSIVE ON STANDALONE BASIS. IN THE ABSENCE OF ANY MALAFIDE IN THE ACTION OF THE AS SESSEE, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). IN THE INSTANT CASE, IN OUR VIEW, THE CIT(A) HAS CORRECTLY APPLIED LAW AND DELETED THE PENALTY. WE TOTALLY CON CUR WITH THE VIEW EXPRESSED BY THE CIT(A). THE REVENUE COULD NOT DEMONSTRATE THE LACK OF BONAFIDE IN THE ACTION OF THE ASSESSEE. THE ASSESSEE WITH REFERENCE TO SEVERAL JU DICIAL PRECEDENTS HAS DEMONSTRATED BEFORE US THAT THE ISSUE AS TO WHETHER EXPENDITURE IN QUESTION IS CAPITAL OR REVENUE IS HIGHLY DEBATABLE. COUPLED WITH THIS, THE SUBSTANTIA L QUESTION OF LAW IN THE QUANTUM PROCEEDINGS HAS ALSO BEEN ADMITTED FOR ADJUDICATION BY THE HON'BLE HIGH COURT IN APPEAL UNDER S.260A OF THE ACT. IN THIS BACKGROUND, WE SEE NOT ERROR IN THE ORDER OF THE CIT(A). 8. THE FACTS OF THE CASE ON HAND ARE IDENTICAL TO THE FACTS OF THE CASE OF AS DISCUSSED ABOVE IN THE OWN CASE OF THE ASSESSEE. TH EREFORE, RESPECTFULLY FOLLOWING THE SAME WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A). HENCE WE DECLINE TO INTERFERE IN THE ORDER OF THE LEARNED CIT (A). THUS THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 6 9. BEFORE WE PART WITH THE ISSUE/APPEAL AS DISCUSSED A BOVE, IT IS PERTINENT TO NOTE THAT THE CLAUSE (C) OF RULE 34 OF THE APPELLATE TRI BUNAL RULES 1963 REQUIRES THE BENCH TO MAKE ENDEAVOUR TO PRONOUNCE THE ORDER WITH IN 60 DAYS FROM THE CONCLUSION OF THE HEARING. HOWEVER THE PERIOD OF 60 DAYS CAN BE EXTENDED UNDER EXCEPTIONAL CIRCUMSTANCES BUT THE SAME SHOULD NOT O RDINARILY BE FURTHER EXTENDED BEYOND ANOTHER 30 DAYS. IN SIMPLE WORDS TH E TOTAL TIME AVAILABLE TO THE BENCH IS OF 90 DAYS UPON THE CONCLUSION OF THE HEARING. HOWEVER, DURING THE PREVAILING CIRCUMSTANCES WHERE THE ENTIRE WORLD IS FACING THE UNPRECEDENTED CHALLENGE OF COVID 2019 OUTBREAK, RESULTING THE LOCKDOWN IN THE COUNTRY, THE ORDERS THOUGH SUBSTANTIALLY PREPAR ED BUT COULD NOT BE PRONOUNCED FOR THE UNAVOIDABLE REASONS WITHIN THE M AXIMUM PERIOD OF 90 DAYS. IN SUCH CIRCUMSTANCES WE FIND THAT THE HONBLE MUMB AI TRIBUNAL IN THE CASE OF JSW LIMITED VS DEPUTY COMMISSIONER OF INCOME TAX IN ITA NO. 6103/MUM/2018 VIDE ORDER DATED 14-5-2020 EXTENDED THE TIME FOR PRONOUNCING THE ORDER WITHIN 90 DAYS OF TIME BY OBS ERVING AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION 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 COV ID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT , EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLA TE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE MAHARASHTR A 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 U NPRECEDENTED DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT H AS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF INDIA, IN AN UNPRECEDENTED ORDER I N THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXT ENDED 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 L OCKDOWN 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 202 0, HAS, BESIDES 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 26TH MARCH 2020 CO NTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY , AND ALSO OBSERVED THAT ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 7 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 19TH FEBRUARY 2020, TAKEN THE ST AND 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 MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE 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 W HICH LOCKDOWN WAS IN FORCE CAN BE 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 PRONOU NCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COU NTRY 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 REALIT IES IN MIND 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 THE SOCIAL ORDER. TH E TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQ UIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CON SONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TI ME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDEN TED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBTEDLY, IN THE CA SE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)] , HONBLE BOMBAY HIGH COURT DID NOT APPROVE AN ORDE R BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APRIL 2020, HELD THAT DIRECTED WHILE 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 EXTE NDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUO MOTU BY HONBLE JURIS DICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOC KDOWN 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 90-DAY TIME-LIMIT FOR PRONO UNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDE RS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, AND THERE CANNOT BE ANY, BAR ON THE DISCRETION OF THE BENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG 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 CONSIDERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACT S OF THIS CASE. 11. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOWE D, 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 B OARD. ITA NO. 326/ AHD/2016 . A.Y. 2008-0 9 8 CONSIDERING THE ABOVE, WE EXPRESS TO PRONOUNCE THE ORDER BEYOND THE PERIOD OF 90 DAYS. ACCORDINGLY, WE PROCEED TO PRONOUNCE THE O RDER AS ON DATE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 01- 06 - 2020 SD/- SD/- (RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 01/ 06/2020 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD