VALUE LINE EQUITIES P. LTD ( FORMERLY KNWOAN AS M.S SB & T SECURITIES P.LTD), MUMBAI V. ACIT CIR 4(2), MUMBAI

ITA 4605/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6626 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 26-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; TDS
• Section: 143(3); 274; 13

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 . 4605 / MUMBAI/ 2018 ( / ASSESSMENT YEAR: 2008 - 09 ) M/S VALUELINE EQUITIES PRIVATE LIMITED 405, APPEJAY HOUSE 4 TH FLOOR, 130 MUMBAI, SAMACHAR MARG, FORT, MUMBAI - 400 001 / VS. A CIT CIR 4(2), AAYAKARBHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN NO. AA ACS 6170 Q ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAVIKANT PATHAK , AR / RESPONDENTBY : MS. BHARATI SINGH, DR / DATE OF HEARING : 05.03 .2020 / DATE OF PRONOUNCEMENT : 08.07.2020 / 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) 9 IN SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 29.06 .18 FOR A SSESSMENT YEAR (IN SHORT ) A Y 2008 - 09 . 2 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 2 . THE BRIEF FACTS OF THE CASE ARE, THE REGUL AR ASSESSMENT UNDER SEC TION 143(3) OF THE I NCOME TAX A CT , 1961 (IN SHORT ACT) WAS COMPLETED ON 30.11.2010 AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT 1,02,99, 416/ BY DISALLOWING 25% OF THE FOREIGN TRAVEL EXPENSES . SI NCE ASSESSEE COULD NOT SUBMIT THE RELEVANT D OCUMENTS TO THE EXTENT OF 93, 039/ , AUDITORS REMUNERATION CLIMBED TWICE TO THE EXTENT OF 1, 23, 596/ AND STT CHARG ES TO THE EXTENT OF 27, 825/ . S UBSEQUENTLY PENALTY PROCEEDINGS UNDER SECTION 271 (1) (C) OF THE ACT WERE INITIATED AND NOTICE UNDER SECTION 271 (1) (C) R.W.S 274 OF THE A CT DATED 16.12.2010 WAS ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE ASSESS EE FILED DETAILED REPLY ON 19.03.2013. 3. IN THE REPLY, ASSESSEE SUBMITTED THAT ONE OF THE DIRECTOR AND ADVISOR TRAVELLED ABROAD TO EXPAND ITS BUSINESS AND INCURRED THE ABOVE SAID EXPENDITURE. THEY SUBMITTED THAT ASSESSING OFFICER CONSIDERED THE ABOVE SUBM ISSION AND MADE AN ADHOC DISALLOWANCE @ 25% FOR THE REASON THAT ASSESSEE COMPANY WAS UNABLE TO PRODUCE THE COMPLETE DOCUMENTS RELATING TO FOREIGN TRAVEL EXPENSES. 3 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 4. WITH REGARD TO AUDITOR S REMUNERATION , IT IS SUBMITTED THAT IT HAS PAID AUDITORS REMUNERA TION AND DEBITED THE SAME TO THE AUDITORS REMUNERATION ACCOUNT AND IT IS INADVERTENTLY DEBITED TO LEGAL AND PROFESSIONAL FEES ALSO TWICE. 5. WITH REGARD TO STT CHARGES, ASSESSEE SUBMITTED THAT IT HAS DEBIT ED AN AMOUNT OF 19,45, 899/ TOWARDS DERIVATIVE TR ADING LOSS WHICH ALSO INCLUDES STT CHARGES OF 27, 875/ WHICH IT FAILED TO DISALLOW IN COMPUTATION OF TOTAL INCOME. 6. ASSESSEE SUBMITTED THAT HE HAS NEITHER CONCEALED ANY INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME BY RELYING ON FOLLOWING CASES: - 1. CIT VERSUS RELIANCE PETRO PRODUCTS PRIVATE LIMITED (2010) 322 ITR 158 (SC), 2. PRICE WATERHOUSE COOPERS PRIVATE LIMITED VERSUS CIT (6924/2012/SC), 3. KEN SOFTWARE TECHNOLOGIES LTD VERSUS ITO 8 (2) (2)/ITA NO. 4849/M/2009 4. ANUSAYAAUTOPRESS PAR T PRIVATE LIMITED VERSUS DEPARTMENT OF INCOME TAX (1021/PN/2010) 4 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 7. A FTER CONSIDERING THE S UBMISSIONS OF THE ASSESSEE, AO REJECTED THE CONTENTION OF THE ASSESSEE AND FOUND THAT THE ASSESSEE HAS CONCEALED THE PART ICULARS OF INCOME FURNISHING INACCURATE PAR TICULARS OF INCOME BY RELYING ON THE FOLLOWING CASES: 1. UOI VERSUS DHARMENDRA TEXTILE PROCESSORS (2007) 295 ITR 244 (SC) 2. ZOOM COMMUNICATION (P) LTD 40 DTR 249 (2010) 8. A GGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE LD . CIT(A) ALON G WITH DETAILED SUBMISSION. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LD CIT(A) GAVE PARTIAL RELIEF TO THE ASSESSEE BY DELETING THE PENALTY ON FOREIGN TRAVEL EXPENSES BY OBSERVING THAT THE DISALLOWANCE IS MADE ON AD HOC BASIS THAT IS AT AN ESTIMAT ED FIGURE, THEREFORE THE PENALTY CANNOT BE LEVIED AND CONFIRMED THE PENALTY LEVIED BY THE AO ON THE OTHER ADDITIONS. 9 . AGGRIEVED WITH THE ABOVE ORDER , ASSESSEE IS IN APPEAL BEFORE US CONTESTING THE PENALTY CONFIRMED BY THE LD CIT(A). 5 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 10 . BEFORE US , LD AR SUBMITTED WRITTEN SUBMISSION ALONG WITH L EDGER COPIES OF LEGAL AND PROFESSIONAL FEES, AUDITORS REMUNERATION AND M.M.DUBEY ACCOUNT FOR THE YEAR ENDED 31.03.2008 AND 31.03.2009. HE BROUGHT TO OUR NOTICE THE RELEVANT ENTRIES RECORDE D BY THE ASSESSEE IN THE S UBSEQUENT YEARS AND SUBMITTED THAT THE ASSESSEE HAS MADE GENUINE MISTAKE INADVERTENTLY AND PRAYED THAT PENALTY MAY BE DELETED. THE WRITTEN SUBMISSION SUBMITTED BY ASSESSEE IS REPRODUCED BELOW: - IN ABOVE APPEAL, ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY O F RS. 51,4847 - U/S 2 71 (1 )(C) OF THE INCOME TAX ACT, 1961 (ACT) CONFIRMED BY THE CIT(A). CIT(A) HAS DISCUSSED AND CONFIRMED THE PENALTY ON PAGE 5 TO 7 OF HIS ORDER. THE AO HAS DISCUSSED AND LEVIED THE PENALTY ON PAGE 2 TO 4 OF HIS PENALTY ORDER. PENALTY HA S BEEN LEVIED AND CONFIRMED ON TWO DISALLOWANCES I.E. (I) FEES OF RS. 1,23,596/ - PAID TO THE AUDITOR, DEBITED TWICE IN THE BOOKS AND (II) DISALLOWANCE OF SECURITIES TRANSACTION TAX (STT) OF RS. 27,825/ - . 2. PAYMENT MADE TO AUDITOR: 2.1 ASSESSEE PAID RS. 1, 23,596/ - TO THE AUDITOR NAMELY M/S. M.M. DUBEY & COMPANY, CHARTERED ACCOUNTANTS ON 31/03/2008. THE SAID AMOUNT HAS BEEN DEBITED TO LEGAL AND PROFESSIONAL FEES. SAID AMOUNT WAS NEITHER ROUTED THROUGH AUDITOR REMUNERATION NOR TO THE ACCOUNT OF AUDITOR IN THE BOOKS OF ASSESSEE. 2.2 WHILE, FINALIZING THE BOOKS FOR AUDIT IN THE MONTH OF SEPTEMBER, 2008, THE ASSESSEE PASSED ANOTHER ENTRY OF AUDITOR 6 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED REMUNERATION. THIS ENTRY WAS DEBITED TO THE ACCOUNT OF AUDITOR REMUNERATION AND CREDITED TO THE AUDITOR'S ACCOUNT WH ICH IS SHOWN AS LIABILITY. IN ORDER TO PAY THE LIABILITY, THE ASSESSEE ISSUED CHEQUE OF RS. 1,10,866/ - (I.E. AUDITOR REMUNERATION OF RS. 1,23,596 - TDS OF RS. 12,730) TO THE AUDITOR ON 24/01/2009. THE SAID CHEQUE WAS RETURNED BY THE AUDITOR COMMUNICATING T HAT HE HAS ALREADY RECEIVED THE FEES TOWARDS AUDIT. THUS, THE ENTRY PASSED AT THE TIME OF ISSUING THE CHEQUE HAS BEEN REVERSED BY THE ASSESSEE. 2.3 REALIZING THE MISTAKE, THE ASSESSEE REVERSED THE ENTRY ON 29/01/2009 (I.E. SUBSEQUENT FINANCIAL YEAR 2008 - 09 ) BY CREDITING THE SAME TO THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE DEBITED THE AMOUNT AND PAID THE AMOUNT TWICE DUE TO MISTAKE. 2.4 THE RESULT OF THE MISTAKE IS THAT THE SAID AMOUNT IS TAXED TWICE I.E. IN THE CURRENT BY MAKING DISALLOWANCE AND IN THE NEX T YEAR BY REVERSING THE ENTRY WHICH IS CREDITED TO THE PROFIT AND LOSS ACCOUNT. 2.5 THE ASSESSEE DID NOT FILE THE REVISED RETURN UNDER IMPRESSION THAT THERE IS NO TAX EVASION AS THE ASSESSEE HAS REVERSED THE SAID AMOUNT IN THE NEXT YEAR. 3. STT: 3.1 ASSESS EE HAS PAID THE STT ON TRADING ON TRADING IN DERIVATIVES WHICH HAS BEEN DEBITED TO PROFIT AND LOSS ACCOUNT. HOWEVER, THE SAME REMAINED TO BE DISALLOWED IN THE RETURN INCOME. THEREFORE, THE AO WAS 7 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED REQUESTED TO DISALLOW THE SAME WHILE PASSING THE ORDER U/S 1 43(3) OF THE ACT. STT REMAINED TO BE DISALLOWED DUE TO MISTAKE AND OVERSIGHT. 4. THE ASSESSEE SUBMITS THAT THERE WAS NO SUPPRESSION OF FACTS BUT A GENUINE MISTAKE OF DEBITING AMOUNT PAID TO AUDITOR TWICE AND NOT DISALLOWING THE STT. THERE WAS NO ATTEMPT ON THE PART OF THE ASSESSEE TO HIDEOR CONCEAL THE INCOME SO AS TO AVOID THE PAYMENT OF TAX. THE SAID DOUBLE DEBIT OF AUDITORS REMUNERATION AND DISALLOWANCE OF STT WERE AN INADVERTENT ERROR; HENCE, PENALTY LEVIED SHALL BE DELETED 5. IN VIEW OF THE ABOVE FACTS , THE ASSESSEE PRAYS THAT THE PENALTY CONFIRMED BY THE CIT(A) SHALL BE DELETED. 6. ASSESSEE RELY ON FOLLOWING JUDICIAL PRONOUCEMENTS: - PRICE WATERHOUSE COOPERS (P.) LTD. VS CIT [348ITR 306 SC] - CIT VS. SOMANYEVERGREE KNITS LTD.[ 352 ITR 592 (BOM)] - CIT VS M/S. BENNETT COLEMAN & CO. LTD. [259 CTR (BOM) 383] - AMBICO INTEGRATED MARKETING VS ACIT [ITA 1350/MUM/2017] - SPANCO TECHNOLOGIES (I) (P) LTD VS DCIT [ITA 5827/MUM/2014] 7. AO HAS RELIED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF ZOOM COMMUNICATION [327 ITR 510 (DEL)]. THE ASSESSEE SUBMITS THAT THE ABOVE DECISION HAS NO APPLICATION IN THE PRESENT CASE OF THE ASSESSEE AS ITS CASE WAS SUBJECT MATTER OF ASSESSMENT IN THE PRECEDING YEARS AS WELL AS IN THE SUCCEEDING YEARS. THUS, THERE CANNO T BE ANY QUESTION OF MAKING INCORRECT CLAIM. MOREOVER, THE HON'BLE JURISDICTIONAL HIGH COURT HAS 8 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED DELETED THE PENALTY IN THE CASE OF CIT VS S.M. CONSTRUCTION [233 TAXMANN 263] CONSIDERING THE DECISION OF ZOOM (SUPRA). IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE FACTS, THE ASSESSEE PRAYS THAT THE PENALTY CONFIRMED BY THE CIT(A) SHALL BE DELETED. 11 . O N THE OTHER HAND ,LD. DR OBJECTE D THE SUBMISSIONS OF THE LD. AR AND SUBMITTED THAT THE MISTAKES WERE FOUND BECAUSE THE ASSESSMENT WAS SELECTED FOR SCRUTINY AND O NLY ASSESSING OFFICER HAS POINTED OUT THE MISTAKES AND OTHERWISE, THE ISSUE WOULD NOT HAVE COME TO LIGHT. T HEREFORE , HE SUPPORTED THE LEVY OF PENALTY IN THE PRESENT CASE. 1 2 . CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL PLACED ON RECORD. WE NOTICE THAT AS SESSEE HAS DEBITED THE AUDIT FEES AFTER MAKING PAYMENT DIRECTLY TO LEGAL AND PROFESSIONAL FEES AFTER DEDUCTING PROPER TDS. THE ASSESSEE ONCE AGAIN PASSED A JOURNAL ENTRY FOR AUDIT FEE TO BE PAYABLE AND DEBITED THE SAME IN AUDITORS REMUNERATION ACCOUNT. THE ASSESSEE HAS NOT NOTICED THIS MISTAKE UNTIL THE MISTAKE WAS POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS , W HEN THIS MISTAKE WAS POINTED OUT BY THE ASSESSING OFFICER, THE ASSESSEE ACCEPTED THE MISTAKE . THE SAME WAS RECTIFIED IN THE BO OKS AND RESPECTIVE ENTRIES WAS PASSED 9 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED IN THE SUBSEQUENT ASSESSMENT YEAR. THE DETAILS FOR THE SAME IS PLACED ON RECORD , BE NOTED THAT THIS MISTAKE WAS NOT DETECTED BY THE ASSESSEE SINCE IT HAS DEBITED THE SAME EXPENDITURE IN 2 DIFFERENT LEDGER ACCOUNTS. AS THE MISTAKE WAS POINTED OUT AND THE ASSESSEE HAS REVERSED THE WHOLE PROVISIONS MADE BY THE ASSESSEE AT THE YEAR END 31.0 3 . 20 08 TO THE EXTENT OF 6,06, 680 / - . IN OUR VIEW THIS TYPE OF MISTAKES IS POSSIBLE WHILE MAKING PROVISIONAL ENTRIES AT THE YEAR END. 13 . WITH REGARDS TO STT CLAIM ALSO, THE ASSESSEE HAS FAILED TO DISALLOW THE SAME IN COMPUTATION STATEMENT AND THIS MISTAKE IS OUT O F OVERSIGHT. CONSIDERING THE TOTAL INCOME DECLARED BY THE ASSESSEE, WE DO NOT SEE ANY REASON THAT ASSESSEE WOULD INDULGE IN CONCEALING THE INCOME BY FURNISHING I NACCURATE PARTICULARS TO THE EXTENT OF EXPENDITURE/ INCOME DISALLOWED BY THE AO AND THE CASE OF THE ASSESSEE IS SIMILAR TO THE CASE OF PRICE WATERHOUSE (SUPRA). THEREFORE WE ARE INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE AND DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER. 14 . IN THE NET RESULT , THE APPEAL FILED BY THE ASSESSEE IS ALLOWED 10 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 15 . 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 NO S. 6264 & 6103/MUM/2018 DATED 14.5.2020, WHEREIN THIS ISSUE HAS BEEN ADDRESSED IN DETAIL ALLOWING TIME TO PRONOUNCE 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, T HIS 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) 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 CONCL USION OF THE HEARING, THE BENCH SHALL GIVE A DATE FORPRONOUNCEMENT. 11 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED (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 CIRCUMSTANCES OF THE CASE, THE BENCH SHALL FIX A FUTURE DAY FOR PRONOUNCEMENT OF THE ORDER, AND SUCH DATE SHALL NOT ORDINARILY (EMPHASIS SUPPLI ED 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 DA TE OF 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 JURISDICTIONAL HIGH COURT IN THE CASE OF SHIVSAGAR VEG RESTA URANT VS ACIT [(2009) 317 ITR 433 (BOM)] WHEREIN THEIR LORDSHIPS HAD, INTER ALIA, DIRECTED THAT 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 GUIDELINES SHALL BE FRAMED AND ISSUED BY THE PRESIDENT OF THE APPELLATE TRIBUNAL WITHIN SHORT EST 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 APPELLATE AUTHORITIES UNDER THE INCOME - TAX ACT ARE DIRECTED TO DECIDE MATTERS HEARD BY THE M WITHIN A PERIOD OF THREE MONTHS FROM THE DATE CASE IS CLOSED FOR JUDGMENT . IN THE RULED 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 90 DAYS. THE Q UESTION 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 IN DIA 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 MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE IN COME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVERELY 12 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 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 FU NCTIONING 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 AL SO 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 SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY , AND ALSO OBSERVED THAT ARR ANGEMENT 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 MAJEURE HA S 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 AND THE COVID - 19 EPIDEMIC HAS BEEN NOTIFIED AS A DISASTE R 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 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, 13 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DUR ING 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 THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. THE TENETS OF LAW BEI NG 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, N OTIFIED 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 APPROVE AN O RDER 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 - BO UND 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 SUOMOTU BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT AL SO 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,INTHELIGHTOFTHEABOVEANALYSISOFTHELEGALPOSITION, THEPERI ODDURINGWHICH 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 PRONOUNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESP ECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, AND T HERE 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 T HEN, 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 INCOM E TAX (APPELLATE TRIBUNAL) RULES, 14 I.T.A. NO. 4605 /MUM/201 8 M/S VALUELINE EQUITIES PRIVATE LIMITED 1962, BY PLACING THE DETAILS ON THE NOTICEBOARD. 1 6 . 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. 17 . ORDER PRONOUNCED AS PER RULE 34(5) OF ITAT RULES AND BY PLACING THE PRONOUNCEME NT LIS T IN THE NOTICE BOARD ON 08.07.2020 . SD/ - SD/ - ( C. N. PRASAD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 08.07 .2020 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUM BAI