Kaushikbhai Chhotalal Dalwadi, Ahmedabad V. ITO, Ward-5(2)(5), Ahmedabad

ITA 483/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0943 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-12-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 22-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEELIPKUMAR
• Assessee Lawyers: PF JAIN
• Keywords: Capital asset; Reasonable cause; Corroborative evidences; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 483/AHD/2019 (ASSESSMENT YEAR: 2014-15) KAUSHIKBHAI CHHOTALAL DALWADI 18, RIVER COLONY, OPP. ST. XAVIERS COLLEGE, NAVRANGPURA, AHMEDABAD-380009 V/S INCOME TAX OFFICER WARD- 5(2)(5), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AIWPD9768Q APPELLANT BY : SHRI P. F. JAIN, A.R. RESPONDENT BY : SHRI DEELIP KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 17 -02-202 0 DATE OF PRONOUNCEMENT : 01 - 06 -2020 PER WASEEM AHMED, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-5, AHMEDABAD DATED 26.02.2019 PERTAINING TO A.Y. 2014-15. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 2 1. THE LEARNED CIT(APPEALS) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY FOR ALLEGED FURNISHING OF INACCURATE PARTIC ULARS OF INCOME IN AS MUCH AS THAT THERE WAS NO SUCH INACCURATE FURNISHING OF PAR TICULARS, 2. HE HAS ERRED IN LAW AND ON FACTS IN NOT PROPERLY APPRECIATING THE REPLY OF THE APPELLANT DATED 19/06/2017 FOR NON LEVY OF PENALTY. 3. ON THE FACTS OF THE ASSESSEE NO PENALTY OUGHT TO HAVE BEEN LEVIED AS THERE WAS REASONABLE CAUSE FOR NOT SHOWING LTCG. 4. THE PENALTY LEVIED IS SUBMITTED TO BE BAD IN LAW AND ON FACTS AS NOTICE ISSUED IS DEFECTIVE WITHOUT POINTING OUT THE SPECIFIC DEFAULT RESULTING INTO NON APPLICATION OF MIND. IN AS MUCH AS THAT FURNISHING INACCURATE P ARTICULARS OF INCOME AND CONCEALMENT OF INCOME ARE BOTH DISTINCT AND SEPARAT E. 5. IT HAS BEEN WRONGLY OBSERVED THAT THE ASSESSEE K NOWINGLY AND DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME IN AS MU CH AS THAT UNDER THE BONA FIDE BELIEF THE CAPITAL GAIN WAS NOT SHOWN IN THE RETURN OF INCOME. 6. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN OBSERVING FOR JUSTIFICATION OF PENALTY THAT THE DECISIONS OF AHME DABAD ITAT ARE DIFFERENT AND DISTINGUISHABLE BY SIMPLY MAKING BALD STATEMENT WHE REAS THE DECISIONS OF AHMEDABAD ITAT RELIED UPON SQUARELY APPLY TO THE FA CTS OF THE APPELLANT. 7. ON THE FACTS NO SUCH PENALTY OUGHT TO HAVE BEEN LEVIED. 3. THE COMBINED ISSUE RAISED BY THE ASSESSEE IS THAT T HE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY ORDER WITHOUT APPRECIATING T HE FACT THERE WERE NO INACCURATE PARTICULAR FURNISHED. FURTHER THE ORDER IS BAD IN LAW AS THE NOTICE ISSUED DOES NOT SPECIFY FOR WHICH LIMB THE PROCEEDI NG WAS INITIATED UNDER SECTION 271(1)(C) THE ACT. 4. BRIEFLY STATED FACT IS THAT THE ASSESSEE IS AN INDI VIDUAL AND EARNING INCOME FROM AGRICULTURE ACTIVITY AND TUITION FEE. DURING THE A. Y. 2012-13 THE ASSESSEE ENTERED INTO AN AGREEMENT DATED 10-2-2012 WITH A PR OPERTY DEVELOPER NAMELY SANDIPANI INFRASTRUCTURE A PARTNERSHIP FIRM FOR DEV ELOPMENT OF RESIDENTIAL HOUSING SOCIETY AT HIS LAND SITUATED AT BLOCK NO. 7 39 SHILJAL (BHOPAL) AHMEDABAD. THE VALUE OF THE CONSIDERATION FOR THE ASSESSEE IN THE AGREEMENT ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 3 WAS DECIDED AT RS. 6 CRORES. THE ASSESSEE DURING TH EYEAR RECEIVED TWO SHOP IN A MALL NAMELY HIMLAYAEMERALEDSATELITE AHMEDABAD FOR T HE VALUE OF RS. 94,08,000/- AS CONSIDERATION FROM DEVELOPER NAMELY SANDIPANI INFRASTRUCTURE AGAINST SALE OF ONE OF THE UNIT OF THE PROJECT SOLD . BUT THE ASSESSEE FAILED TO INCORPORATE SUCH SALE PROCEED IN THE INCOME TAX RET URN. THE ASSESSEE DURING ASSESSMENT PROCEEDING SUBMITTED THAT THE SAME WAS O MITTED TO OFFER IN THE INCOME TAX RETURN DUE TO SOME MISTAKE AND AGREED TO PAY DUE TAXES ON THE SAME. ACCORDINGLY THE AO CALCULATED LTCG AT RS. 79, 77,246/- AND ADDED THE SAME TO TOTAL INCOME OF THE ASSESSEE. THE AO FURTHE R INITIATED THE PENALTY PROCEEDING FOR FILING INACCURATE PARTICULAR AND CON CEALMENT OF INCOME. 5. DURING THE PENALTY PROCEEDING THE ASSESSEE SUBMITTE D THAT HE WAS IN BONA-FIDE BELIEF THAT THE CAPITAL GAIN SHOULD BE OFFERED ONCE THE PROJECT GETS FULLY COMPLETED AND POSSESSION GIVEN TO THE DEVELOPER. HE NCE THERE WAS NO ANY ILL INTENTION TO ESCAPE TAXES. 6. HOWEVER THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT HAD THE CASE OF THE ASSESSEE NOT BEEN SELECTED UNDER SCRUTINY, THEN THE IMPUGNED INCOME SHOULD HAVE ESCAPED FROM ASSESSMENT . ACCORDINGLY THE AO HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PAR TICULARS OF INCOME AND IMPOSED THE PENALTY OF RS. 16,13,441/- BEING HUNDRE D PERCENT OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. 7. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT (A) WHO ALSO CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER : 4.4. DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT CONTENDED THAT HE ACCEPTED THE ADDITION OF THE LONG TERM CAPITAL GAIN AND PAID THE TAX ON THE SAME. HOWEVER, FURTHER CONTENDED THAT THE AO HAS NOT MENT IONED SPECIFIC DEFAULT LIABLE TO PENALTY PROCEEDINGS U/S.271(L)(C) OF THE ACT. TH E APPELLANT ALSO CONTENDED THAT ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 4 THE APPELLANT IS A SENIOR CITIZEN AND THE CAPITAL G AIN WAS LEFT TO BE SHOWN DUE TO CLERICAL MISTAKE OF THE STAFF DUE TO OVERSIGHT. FUR THER CONTENDED THAT THE CAPITAL GAIN WAS NOT SHOWN DUE TO BONAFIDE AND REQUESTED TH AT THE PENALTY MAY BE DELETED. 4.5. I HAVE EXAMINED THE FACTS OF THE APPEAL UNDER CONSIDERATION WITH RESPECT TO MATERIAL AVAILABLE ON RECORD AND FOUND THAT THE CON TENTION OF THE APPELLANT IS GENERAL AND VAGUE AND DOES NOT HAVE ANY SUPPORTING EVIDENCE AND DETAILS. DURING THE ASSESSMENT PROCEEDINGS, THE AO SPECIFICA LLY NOTED THAT THE ASSESSEE HAS ENTERED INTO THE AGREEMENT AND CASE WAS SELECTE D FOR THIS PURPOSE UNDER CASS AND AFTER DETAILED INQUIRY FOUND THE TRANSACTI ON WHICH WAS NOT SHOWN BY THE APPELLANT IN THE RETURN OF INCOME. IT IS UNDISP UTED FACTS THAT THE APPELLANT DID NOT OFFER THE SAME ON HIS OWN TO PROVE THE BONAFIDE THEREFORE THE CONTENTION OF THE APPELLANT IS NOT TENABLE. THUS THE APPELLANT FU RNISHED INACCURATE PARTICULAR OF INCOME AND BY WAY OF NOT FURNISHING INFORMATION OF CAPITAL GAIN CONCEALED THE INCOME. THE APPELLANT ALSO RELIED ON VARIOUS DECISI ONS HOWEVER FACTS ARE DIFFERENT AND DISTINGUISHABLE FROM THESE CASE LAWS RELIED UPO N BY THE APPELLANT. CONSIDERING THE ABOVE FACTS, THE PENALTY LEVIED BY THE A.O. IS CONFIRMED. 8. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO37 AND SUBMITTED THAT THE ASSESSEE DID NOT OFFER THE IMPUG NED INCOME UNDER THE BONA FIDES BELIEVE THAT THE SAME IS TAXABLE ON THE COMPL ETION OF THE ENTIRE PROJECT. THEREFORE THERE CANNOT BE ANY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 10. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUPPOR TED THE ORDER OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD BEFORE US. FROM THE P RECEDING DISCUSSION WE FIND THAT THE ASSESSEE HAS HANDED OVER THE LAND TO THE D EVELOPER VIDE AGREEMENT ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 5 DATED 10 FEBRUARY 2012 AGAINST THE CONSIDERATION AF FIXED AT RS. 6 CRORES. HOWEVER, THE PART CONSIDERATION WAS RECEIVED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AS DISCUSSED ABOVE. THUS THE 1ST CONT ROVERSY ARISES WHETHER THE INCOME WAS TAXABLE IN THE ASSESSMENT YEAR 2012-13 A S THE LAND IN DISPUTE WAS HANDED OVER TO THE DEVELOPER AGAINST THE CONSIDERAT ION OF RS. 6 CRORES THOUGH THE SAME WAS NOT RECEIVED IN THE ASSESSMENT YEAR 20 12-13. IN THIS REGARD, WE NOTE THAT THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT HAVE THE DIRECT BEARING ON THE ISSUE ON HAND WHICH READS AS UNDER: DEFINITIONS. 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIR ES, (47) 'TRANSFER', IN RELATION TO A CAPITAL ASSET, IN CLUDES, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXX (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT, 1882 (4 OF 1882) ; OR 12. THUS THE INGREDIENTS OF SECTION 2(47)(V) ARE ( I) A TRANSACTION WHICH INVOLVES ALLOWING OF THE P OSSESSION. (II) OF ANY IMMOVABLE PROPERTY. (III) TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF THE CONTRACT. (IV) CONTRACT BEING OF THE NATURE REFERRED TO IN SECTION 53A OF THE TP ACT. 13. SIMILARLY THE INGREDIENTS OF SECTION 53A OF THE TP ACT AS ANALYZED BY THE APEX COURT IN THE CASE OF NATHULAL V. PHOOLCHAND AIR 197 0 SC 546, ARE AS UNDER (PAGE 548) : 'THE CONDITIONS NECESSARY FOR MAKING OUT THE DEFENCE OF PART PERFORMANCE TO AN ACTION IN EJECTMENT BY OWNER ARE: ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 6 (I) THAT THE TRANSFEROR HAS CONTRACTED TO TRANSFE R FOR CONSIDERATION ANY IMMOVABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE A SCERTAINED WITH REASONABLE CERTAINTY; (II) THAT THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF OR T HE TRANSFEREE BEING ALREADY IN POSSESSION CONTINUES IN POSSESSION IN PART PERFORMA NCE OF THE CONTRACT; (III) THAT THE TRANSFEREE HAS DONE SOME ACT IN FU RTHERANCE OF THE CONTRACT; AND (IV) THAT THE TRANSFEREE HAS PERFORMED OR IS WILL ING TO PERFORM HIS PART OF THE CONTRACT. IF THESE CONDITIONS ARE FULFILLED, THEN NOTWITHSTAN DING THAT THE CONTRACT, THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGISTERED OR WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT B EEN COMPLETED IN THE MANNER PRESCRIBED THEREFOR BY THE LAW FOR THE TIME BEING I N FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM IS DEBARRED FROM ENFORCIN G AGAINST THE TRANSFEREE ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANS FEREE HAS BEEN TAKEN OR CONTINUED IN POSSESSION OTHER THAN A RIGHT EXPRESSL Y PROVIDED BY THE TERMS OF THE CONTRACT.' 14. ADMITTEDLY, IN THE PRESENT CASE THE LAND HAS BEEN H ANDED OVER TO THE DEVELOPER AGAINST THE CONSIDERATION WHICH WAS FIXED AT RS. 6 CRORES. THEREFORE, WE ARE OF THE VIEW THAT THE TRANSFER OF THE LAND HAS TAKEN PL ACE IN THE ASSESSMENT YEAR 2012-13 IN PURSUANCE TO THE AGREEMENT DATED 10TH FE BRUARY 2012. THE CONDITIONS AS SPECIFIED UNDER SECTION 53A OF THE TR ANSFER OF PROPERTY ACT 1882 HAVE BEEN SATISFIED AS DISCUSSED ABOVE. FROM THE AB OVE, IT IS TRANSPIRED THAT THE LAND WAS TRANSFERRED TO THE DEVELOPER WITH THE POSS ESSION IN THE ASSESSMENT YEAR 2012-13 AND THEREFORE THE TRANSFER AS PER THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT HAS TAKEN PLACE. THUS THE INCOME IN OUR UNDERSTANDING ON SUCH TRANSACTION WAS TAXABLE THE ASSESSMENT YEAR 2012-20 13. 15. THE 2ND CONTROVERSY ARISES WHETHER THE PENALTY CAN BE LEVIED IN THE YEAR UNDER CONSIDERATION FOR THE INCOME OFFERED TO TAX BY THE ASSESSEE IN THE YEAR UNDER ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 7 CONSIDERATION. IN OUR HUMBLE UNDERSTANDING, THE QUE STION OF THE PENALTY ARISES WHEN THERE IS AN INCOME WHICH WAS EITHER CONCEALED OR FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY WE HOLD THAT THE RE CANNOT BE ANY QUESTION OF PENALTY AS THERE WAS NO TAXABLE INCOME IN THE HA NDS OF THE ASSESSEE. AS SUCH, THERE CANNOT BE ANY PENALTY MERELY ON THE GROUND TH AT THE ASSESSEE HAS OFFERED SOME INCOME DURING THE ASSESSMENT PROCEEDINGS WHICH WAS ACTUALLY NOT CHARGEABLE TO TAX IN THE YEAR UNDER CONSIDERATION. 16. WE ALSO FIND THAT THE ASSESSEE HAS NOT DISCLOSE THE CAPITAL GAIN INCOME IN HIS INCOME TAX RETURN AMOUNTING TO RS. 79,77,246/- ON Q UESTION, BY THE AO THE ASSESSEE EXPLAINED THAT SUCH INCOME WAS NOT OFFERED TO TAX UNDER THE BONA FIDES BELIEVE THAT THE SAME WOULD BE TAXABLE UPON T HE COMPLETION OF THE ENTIRE PROJECT. THIS CONTENTION OF THE ASSESSEE WAS NOT DO UBTED BY THE AUTHORITIES BELOW. THEREFORE IT CAN BE INFERRED THAT THE ASSESS EE DID NOT DELIBERATELY OFFER THE IMPUGNED INCOME IN HIS INCOME TAX RETURN. AS SU CH THERE WAS NO DELIBERATE/WILLFUL ACT ON THE PART OF THE ASSESSEE EITHER TO CONCEAL THE INCOME OR FURNISH THE INACCURATE PARTICULAR OF INCOME. 17. THE TERM INACCURATE PARTICULAR OF INCOME HAS NOT BE EN DEFINED UNDER THE PROVISIONS OF SECTION 271(1)(C) OR ELSEWHERE IN THE ACT THE ACT. HOWEVER, THE MEANING OF THE TERM INACCURATE HAS BEEN DISCUSSED B Y THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD REPORTED IN 189 TAXMAN 322 WHEREIN IT WAS HELD THAT THE TERM INACCURATE SIGNIFIES DELIBERATE ACT OR OMISSION ON THE PART OF THE ASSESSEE. AS SUCH, THE DETAILS/INFORMATION CONTAINED IN THE RETURN OF INCOME /FINANCIAL STATEM ENTS /AUDIT REPORT WHICH ARE NOT CORRECT ACCORDING TO TRUTH, AND WERE FURNISHED BY THE ASSESSEE WITH THE DISHONEST INTENT SHALL BE TREATED AS INACCURATE PAR TICULARS. IN HOLDING SO, WE ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 8 FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD (SUPRA). WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE M ENSREA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONARY, TH E WORD 'INACCURATE' HAS BEEN DEFINED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING T O TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, TH EY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY TH E ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE 18. IN VIEW OF THE ABOVE, WE HOLD THAT THERE CANNOT BE ANY PENALTY IN THE GIVEN FACTS AND CIRCUMSTANCES UNDER THE PROVISIONS OF SEC TION 271(1)(C) OF THE ACT FOR THE REASON THAT THE ASSESSEE HAS NOT DELIBERATELY F URNISHED INACCURATE PARTICULAR OF INCOME. ACCORDINGLY WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. H ENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 19. 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 ORDINARILY 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. ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 9 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 HONBL E MUMBAI 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 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 V ALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FO R 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 ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURTHER TILL 15TH JU NE 2020 . IT HAS BEEN AN UNPRECEDENTED SITUATION NOT ONLY IN INDIA BUT ALL O VER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TA KEN THE STAND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AN D FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FOL LOWING 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 ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 10 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 CASE 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 I N THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 1 5TH 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 CO NTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUO MOTU BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPRE ME 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 CONSIDER ED 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 P URPOSE 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 RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, AND THERE CANNOT BE ANY, BA R ON THE DISCRETION OF THE BENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CON SIDERABLE 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 FACTS 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. 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. ITA NO. 483/ AHD/2019 . A.Y. 2014-1 5 11 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. 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