MARITIME VANGUARD PTE LTD. , MUMBAI V. DCIT (INTERNATIONAL TAXATION) -3(2)(1), MUMBAI, MUMBAI

ITA 5999/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4842 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2016-2017
• Appeal Filed On: 20-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH
• Keywords: Business income; Double taxation relief; Opportunity of being heard; Permanent establishment; Initiation of penalty proceedings; Set aside
• Section: 28; 271(1)(c); 143(3); 142(1); 234B; 44BB; 143(2); 9(1); 9(1); 9(1); 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR , VP AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5999 /MUM/20 1 9 ( / ASSESSMENT YEAR: 20 16 - 17 ) MARITIME VANGUARD PVT. LTD. C/O SRBC & ASSOCIATES, LLP, 14 TH F LOOR, THE RUBY, 29 SENAPATI BAPAT MARG, DADAR (W), MUMBAI - 400028 . / VS. DCIT (INTERNATIONAL TAXATION) - 3(2)(1) ROOM NO.1615, 16 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021. ./ ./ PAN/GIR NO. : AAJCM3609 F ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 06 /02/2020 / DATE OF PRONOUNCEMENT : 07 / 08 /2020 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ASSESSMENT ORDER PASSED U/S.144C(1 ) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) IN PURSUANCE OF THE DIRECTIONS OF DIS PUTE RESOLUTION PANEL 3 , MUMBAI [HEREINAFTER REFERRED TO AS THE DRP ] DATED 27 . 06 .201 9 RELEVANT TO THE A.Y. 2016 - 17 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - GENERAL 1. ERRED IN ASSESSING TOTAL INCOME AT RS39,66,00,300 AS AGAINST RETURNED INCOME OF RS NIL; TAXABILITY UNDER THE INCOME TAX ACT. 1961 ('ACT) ASSESSEE BY : SHRI M. P. LOHIA ( AR ) REVENUE BY: SHRI SANJAY SINGH (DR) ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 2 2. ERRED IN HOLDING THAT THE RECEIPTS EARNED BY THE APPELLANT ON ACCOUNT OF PROVISION OF SERVICES THROUGH VARIOUS VESSELS TO THE CHARTERERS (BGEPIL AND SAPURA) WERE FOR PROVIDING THE 'US E OR 'RIGHT TO USE THE INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, THEREBY TREATING THE SAME AS 'ROYALTY' UNDER SECTION 9(1)(VI) OF THE ACT; 3. ERRED IN HOLDING THAT THE BENEFIT OF EXCLUSION PROVIDED UNDER EXPLANATION 2 TO SECTION 9(1)(VI) OF THE ACT WOULD BE AVAILABLE ONLY IF THE RECEIPTS EARNED BY MVPL IS OFFERED TO TAX UNDER SECTION 44BB OF THE ACT; 4. ERRED IN TREATING THE RECEIPTS EARNED BY APPELLANT FROM PROVISION OF SERVICES THROUGH VARIOUS VESSELS AS ROYALTY UNDER SECTION 9(1 )(VI ) OF THE ACT, WHEREAS THE SAME IS IN THE NATURE OF BUSINESS RECEIPTS; 5, WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT SUBMITS THAT IF THE ABOVE RECEIPTS ARE CONSIDERED AS CHARGEABLE TO TAX, THE SAME SHOULD BE CHARGEABLE TO TAX IN THE NATURE OF BUSINE SS RECEIPTS, CHARGEABLE UNDER SECTION 44BB OF THE ACT IE 10% OF THE GROSS RECEIPTS DEEMED AS PROFIT CHARGEABLE TO TAX; TAXABILITY UNDER THE INDIA - SINGAPORE DOUBLE TAXATION AVOIDANCE AGREEMENT ('DTAA') 6. ERRED IN HOLDING THAT RECEIPTS EARNED BY THE APPE LLANT ON PROVISION OF SERVICES THROUGH VARIOUS VESSELS TO THE CHARTERERS SHALL BE COVERED WITHIN THE DEFINITION OF THE TERM 'ROYALTY' UNDER ARTICLE 12(3) OF THE INDIA - SINGAPORE DTAA; 7. SHOULD HAVE APPRECIATED THAT THE ABOVE RECEIPTS ARE ON ACCOUNT O F PROVISION OF SERVICES, WHICH IS GOVERNED BY ARTICLE 12(4) OF THE DTAA IE FEES FOR TECHNICAL SERVICES ('FTS') AND IN ABSENCE OF 'MAKE AVAILABLE' OF TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, KNOW - HOW OR PROCESSES, THE SAME IS NOT CHARGEABLE TO TAX; 8. S HOULD HAVE APPRECIATED THAT THE ABOVE RECEIPTS ARE SPECIFICALLY EXCLUDED FROM THE DEFINITION OF FTS IN ACCORDANCE WITH ARTICLE 12(5)(G) OF THE DTAA AND THE SAME IS NOT BE CHARGEABLE TO TAX; ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 3 9. WITHOUT PREJUDICE TO THE ABOVE, EVEN LITHE IMPUGNED RECEIP TS ARE TREATED AS ROYALTY/ FTS AS PER THE ARTICLE 12 OF THE DTAA, THE SAID RECEIPTS, AS PER ARTICLE 12(6) OF THE DTAA, WOULD BE GOVERNED BY ARTICLE 7 OF THE DTAA, AND DUE TO NON - SATISFACTION OF THE THRESHOLD FOR PERMANENT ESTABLISHMENT ('PE') AS PER CL AUSE 5 OF ARTICLE 5, THE IMPUGNED RECEIPTS WOULD NOT BE CHARGEABLE TO TAX; COMPUTATION OF TOTAL INCOME TAX PAYABLE 10. ERRED IN COMPUTING THE TOTAL INCOME TAX PAYABLE AS RS 2,12,38,549 AS AGAINST TOTAL INCOME TAX PAYABLE OF RS 1,99,83,460 ON THE IMPUGN ED INCOME CHARGEABLE TO TAX LEVY OF INTEREST UNDER SECTION 234B OF THE ACT OF RS 57.09,560 11. ERRED IN LEVYING INTEREST UNDER SECTION 234B OF THE ACT AMOUNTING TO RS 57,09,560 INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT 12. ERR ED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE ABOVE GROUNDS OF APPEAL ARE MUTUALLY EXCLUSIVE AND WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD/ ALTER/ AMEND/ DELETE/ WITHDRAW ANY OR ALL OF THE GROUNDS A T OR BEFORE THE HEARING OF THE APPEAL SO AS TO ENABLE THE INCOME TAX APPELLATE TRIBUNAL TO DECIDE THE APPEAL ACCORDING TO LAW. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 06.10.2016 DECLARING TOTAL INCOME TO THE TUN E OF RS. NIL CLAIMING A REFUND OF RS.2,53,86,130/ - FOR THE A.Y.2016 - 17. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE COMPANY WAS INCORPORATED IN AND TAX RESIDEN T OF SINGAPORE. THE ASSESSEE EARNED THE REVENUE FROM THE FOLLOWING CONTRACT FOR PROVISIONS OF VESSELS ON TIME CHARTER BASIS. CHARTERERS VESSELS AMOUNTS (RS.) ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 4 BG EXPLORATION PRODUCTION INDIA LTD PW NATUNA AND POSH MULIA 25,85,90,235/ - SAPURA KENCANA OFFSH ORE SDN BHD POSH BANGKA AND MARITIME PUTRA 13,80,10,023/ - TOTAL 39,66,00,258/ - THE SAID AMOUNT WAS NOT OFFERED TO TAX . THEREAFTER, THE NOTICE WAS GIVEN AND AFTER THE REPLY OF THE ASSESSEE, THE SAID AMOUNT WAS HELD TO BE TAX ED @ 10% OF THE SAID AMOUNT. F EELING AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4 . ALL THE ISSUES ARE IN TER - CONNECTED, THEREFORE, ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. AT THE OUTSET, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ISSUES HAVE DUL Y BEEN COVERED WITH THE ASSESSEES OWN CASE BEARING ITA. NO. 6642/M/2018 FOR THE A.Y. 2015 - 16 DATED 20.12.2019, THEREFORE, THE ISSUES ARE LIABLE TO BE DECIDED ACCORDINGLY . HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2015 - 016 DATED 20.12.2019 . THE RELEVANT FINDING IS HEREBY REPRODUCED AS UNDER.: - 6. WE HAVE HEARD THE RIVAL SUBMI SSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE 1ST GROUND OF APPEAL IS GENERAL IN NATURE. THE REASONS FOR OUR DECISIONS IN RESPECT OF THE 2ND TO 8TH GROUND OF APPEAL, BEING INTERRELATED, ARE GIVEN BELOW. SECTION 44BB IS A SPECIAL PROVISION FOR COMPUTING PROFITS AND GAINS IN CONNECTION WITH THE BUSINESS OF EXPLORATION OF MINERAL OIL. PARLIAMENT ENGRAFTED THE AFORESAID PROVISION IN THE INCOME TAX ACT AS A MEASURE OF SIMPLIFICATION PROVIDING FOR DETERMINATION OF INCOME OF SUCH TAXPAYERS AT 10% OF THE AGGREGATE OF CERTAIN AMOUNT. BY VIRTUE OF SECTION 44BB AND BECAUSE OF NON - OBSTANTE CLAUSE, SECTION 28 OF THE ACT WILL HAVE NO APPLICATION. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 5 THUS SECTION 44BB CONTAINS SPECIAL PROVISION FOR COMPUTING PROFITS AND GAINS IN CONNECTION WITH THE BUSINESS O F EXPLORATION, ETC., OF MINERAL OILS. UNDER THE SAID SECTION, IN THE CASE OF AN ASSESSEE BEING NON - RESIDENT ENGAGED IN THE BUSINESS OF PROVIDING SERVICES OR FACILITIES IN CONNECTION WITH OR SUPPLYING PLANT AND MACHINES ON HIRE FOR USE OR TO BE USED IN THE PROSPECTING OF OR EXTRACTION OR PRODUCTION OF MINERAL OILS, A SUM EQUAL TO 10% OF THE AGGREGATE OF THE AMOUNTS SPECIFIED SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESS ION. DEEMED PROFITS TO THE TUNE OF 10% ARE TAXED UNDER THE SAID SECTION AND IT OVERRIDES THE OTHER CHARGING SECTIONS IN THIS REGARD. THE AMOUNT MENTIONED IN SECTION 44BB(2) CLEARLY SHOWS THAT THE AMOUNT PAID TO THE ASSESSEE ON ACCOUNT OF PROVISION OF SE RVICES AND FACILITIES IN CONNECTION WITH THE EXTRACTION OR PRODUCTION OF MINERAL OILS, WHETHER PAID IN OR OUTSIDE INDIA, ARE TO BE INCLUDED. THE WORD SERVICES FOLLOWED BY EXPANSIVE PHRASE IN CONNECTION WITH ARE RELATABLE TO PROSPECTING FOR AND EXPLOR ATION OF MINERAL OIL. THAT MEANS, ALL SERVICES ASSOCIATED WITH PROSPECTING FOR AND EXPLORATION ACTIVITIES ARE BROUGHT WITHIN THE SCOPE AND REACH OF SECTION 44BB. ANOTHER CATEGORY OF ASSESSEES GOVERNED BY SECTION 44BB ARE THOSE SUPPLYING PLANT AND MACHINERY ON HIRE. 6.1 AS MENTIONED EARLIER, IN THE INSTANT CASE THE ASSESSEE IS A TAX RESIDENT IN SINGAPORE AND CONSEQUENTLY, A NON - RESIDENT IN INDIA. IT HAS ENTERED INTO TIME CHARTERS CONTRACTS WITH BGEPIL, LTHE, ASTRO AND SAPURA DURING THE YEAR UNDER CONSIDERA TION. TO APPRECIATE THE ISSUE, WE MENTION BELOW THE SCOPE OF WORK BETWEEN THE AS SESSEE I.E MARITIME VANGUARD PVT LTD (IN SHORT MVPL) AND BG EXPLORATION & PRODUCTION INDIA LTD (IN SHORT BGEPI L) AS FILED BY THE LD. COUNSEL : SCOPE OF WORK ONGC, RELIAN CE INDUSTRIES LTD AND BGEPIL ARE JOINT OPERATORS OF PANNA - MUKTA OFFSHORE OIL AND GAS PRODUCTION FIELD SITUATED IN THE ARABIA SEA ON THE WEST COAST OF INDIA. THE OIL AND GAS IS PRODUCED AT THESE FIELDS AND TREATED, COMPRESSED AND THEN EXPORTED THROUGH SUBSE A PIPELINE. THE CONTRACT HAS BEEN ENTERED INTO FOR OFFSHORE INSTALLATION AT THE AFORESAID OIL FIELDS FOR WHICH MVPL IS REQUIRED TO PROVIDE FOR ACCOMMODATION, BARGE, AHT ETC TO BGEPIL. THE ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 6 SCOPE OF WORK FOR THE SAID ACTIVITIES HAVE BEEN SUMMARIZED AS UNDER : CLAUSE 7: EMPLOYMENT THE ENTIRE OPERATION, NAVIGATION AND MANAGEMENT OF THE VESSEL SHALL BE IN THE EXCLUSIVE CONTROL AND COMMAND OF MVPL; THE VESSEL WILL BE OPERATED AND THE SERVICES HEREUNDER WILL BE RENDERED AS REQUESTED BY CHARTERERS, SUBJECT ALW AYS TO THE EXCLUSIVE RIGHT OF MVPL. CLAUSE 11: DUTIES OF MASTER, OFFICERS AND CREW THE MASTER, OFFICERS AND CREW WILL PERFORM THE FOLLOWING SERVICES: WILL CONNECT AND DISCONNECT THE WATER, FUEL, LIQUID MUD HOSES ETC AND OTHER HOSES IN PORT AS WELL AS OFFSHORE INSTALLATIONS; WILL OPERATE APPROPRIATE MACHINERY ON BOARD THE VESSEL (I.E. LOADING UNLOADING CARGOES, ANCHOR HANDLING ETC) WILL HOOK ON AND UNHOOK CARGO WHEN DISCHARGING/LOADING IN PORT AND OFFSHORE INSTALLATION; WILL BE IN SUFFICIENT NUM BER TO ALLOW THE VESSEL TO OPERATE FOR TWENTY - FOUR HOURS PER DAY; WILL OBTAIN AND MAINTAIN ALL AVAILABLE PILOTAGE EXEMPTIONS FOR PORT LOCATIONS ETC. CLAUSE 18 - BUNKERS AT DELIVERY AND REDELIVERY MVPL IS RESPONSIBLE FOR PROVISION OF LUBRICANT OILS, GREASE AND OTHER CONSUMABLES THROUGHOUT THE CHARTER PERIOD. CLAUSE 26 - INSURANCE MVPL SHALL BE UNDER AN OBLIGATION TO EFFECT AND MAINTAIN INSURANCE POLICIES. MVPL WAS ALSO RESPONSIBLE FOR ANY DAMAGE OF THE VESSEL AND CREW THEREIN AND ACCORDINGLY WOUL D BEAR ALL THE COSTS IN RELATION TO THE SAME. CLAUSE 10: SCOPE OF WORK FOR AHT APART FROM ANCHOR HANDLING ACTIVITIES THE AHT WOULD BE REQUIRED FOR INTRA - FIELD TRANSFER OF PERSONNEL AND MATERIAL AT REQUIRED LOCATION (I.E. MUMBAI); AHT TO HAVE POSITIO NING EQUIPMENT AND PERSONNEL TO MONITOR ANCHOR POSITIONS WHILE ANCHOR HANDLING ACTIVITIES; IMPLEMENTATION OF SYSTEMS FOR ANCHOR HANDLING, PERSONNEL TRANSFER, OFFSHORE INSTALLATIONS ETC. CLAUSE 11: SCOPE OF WORK FOR BARGE ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 7 THE BARGES WILL BE PROVIDED AS SUPPORT FOR CARRYING OUT WORK AT THE AREAS WHERE AHT WILL BE STATIONED FOR PROVIDING SERVICES. CLAUSE 12.4: GARBAGE HANDLING FACILITY THERE WILL BE A SPECIFIED GARBAGE AREA ON THE DECK AND WILL BE PROVIDED BY MVPL BASED ON THE SPECIFICATIONS MENTI ONED IN THE CONTRACT; CLAUSE 12.5: COMPLIANT HELIDECK A HELIDECK WOULD BE AVAILABLE ON THE BARGE/WORKBOAT AND WOULD BE COMPLIANT AS PER THE SPECIFICATIONS PROVIDED IN THE CONTRACT; CLAUSE 12.6: LAUNDRY FACILITIES MVPL WOULD BE REQUIRED TO PROVIDE LAUNDRY FACILITIES FOR THE CREW WORKING ON THE VESSEL; CLAUSE 12.7: TOILET FACILITIES MVPL WOULD BE REQUIRED TO PROVIDE TOILET FACILITIES FOR THE CREW WORKING ON THE VESSEL WHICH HAS HIGH CLASS HYGIENE AND CLEANLINESS AND ONE WHICH IS REGULARLY MAINT AINED. ALONGWITH THE FACILITIES, MVPL TO PROVIDE ADEQUATE COMPETENT PERSONNEL FOR MAINTAINING THE TOILET FACILITY; CLAUSE 12.8: ACCOMMODATION AND CONFERENCE ROOM AND CLIENT OFFICE FACILITIES MVPL TO PROVIDE ADEQUATE AND REQUISITE CABINS AS PREFERRED F OR THE SENIOR PERSONNEL. IN ADDITION TO THE SAME, MVPL TO PROVIDE FOR CONFERENCE ROOMS WITH ADEQUATE SEATING CAPACITY AND ALL OTHER NECESSARY ELECTRONIC ARRANGEMENTS (VIZ TELEPHONE, LCD TV, CABLES ETC); CLAUSE 12.9: ENTERTAINMENT, RECREATION FACILITIES MVPL TO PROVIDE MESS ROOMS, SMOKING ROOMS, RECREATION ROOMS WITH THE REQUISITE FURNITURE AND APPLIANCES AS MENTIONED IN THE CONTRACT; CLAUSE 12.13: MEDICAL FACILITIES ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 8 MVPL TO PROVIDE MEDICAL FACILITIES I.E. CERTIFIED DOCTOR, ADVANCED MEDICAL RESPOND ER BAG WITH MEDICINES, OXYGEN CYLINDER ETC, FIRST AID BAG AND KITS ETC; FURTHER, THE FOLLOWING CLAUSES OF THE AGREEMENTS BETWEEN MVPL AND L&T, SAPURA & ASTRO DEMONSTRATE THAT THE AGREEMENT WAS ON ACCOUNT OF PROVISION OF SERVICES AND NOT SIMPLICITER HIRE OF EQUIPMENT/VESSEL: CLAUSE 14 - INSURANCE - MVPL SHALL BE UNDER AN OBLIGATION TO EFFECT AND MAINTAIN INSURANCE POLICIES. MVPL WAS ALSO RESPONSIBLE FOR ANY DAMAGE OF THE VESSEL AND CREW THEREIN AND ACCORDINGLY WOULD BEAR ALL THE COSTS IN RELATION TO THE SAME. CLAUSE 6 - MASTER AND CREW - THE ENTIRE OPERATION, NAVIGATION AND MANAGEMENT OF THE VESSEL SHALL BE IN THE EXCLUSIVE CONTROL AND COMMAND OF MVPL; THE VESSEL. THE VESSEL WILL BE OPERATED AND THE SERVICES HEREUNDER WILL BE RENDERED AS REQUESTED BY C HARTERERS, SUBJECT ALWAYS TO THE EXCLUSIVE RIGHT OF MVPL; AND CLAUSE 7 - OWNERS TO PROVIDE - REMUNERATION OF THE MASTER, OFFICER AND OTHER CREW IS TO BE BORNE BY MVPL. 6.2 AT THIS JUNCTURE, WE REFER TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN ONG C (SUPRA). IN THAT CASE, THE ASSESSEE - COMPANY ONGC AND A NONRESIDENT/FOREIGN COMPANY HAD ENTERED INTO AN AGREEMENT BY WHICH THE NONRESIDENT COMPANY HAD AGREED TO MAKE AVAILABLE SUPERVISORY STAFF AND PERSONNEL HAVING EXPERIENCE AND EXPERTISE FOR OPERATION S AND MANAGEMENT OF DRILLING RIGS. THE ASSESSEE - COMPANY PAID AMOUNTS TO NON - RESIDENT ASSESSEES/FOREIGN COMPANIES FOR PROVIDING VARIOUS SERVICES IN CONNECTION WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL. THE ASSESSING OFFICER HELD THAT THE ASS ESSMENT SHOULD BE MADE U/S 44D. HOWEVER, THE APPELLATE COMMISSIONER AND THE TRIBUNAL TREATED SAID PAYMENTS U/S 44BB. THE HIGH COURT, TAKING A VIEW THAT THE CONTRACT DID NOT MENTION THAT THE PERSONNEL OF THE NON - RESIDENT COMPANY WAS ALSO CARRYING OUT THE WO RK OF DRILLING OF WELLS, HELD THAT AS THE COMPANY HAD RECEIVED FEES FOR RENDERING SERVICE, THEREFORE, THE PAYMENTS MADE TO THE FOREIGN COMPANIES WERE LIABLE TO BE TAXED UNDER THE PROVISIONS OF SECTION 44D. ON APPEAL, THE HON BLE SUPREME COURT HELD AS UNDER : 13. THE INCOME TAX ACT DOES NOT DEFINE THE EXPRESSIONS 'MINES' OR 'MINERALS'. THE SAID EXPRESSIONS ARE FOUND DEFINED AND EXPLAINED IN THE MINES ACT, 1952 AND THE OIL FIELDS (DEVELOPMENT ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 9 AND REGULATION) ACT, 1948. WHILE CONSTRUING THE SOMEWHAT PARI MATE RIA L EXPRESSIONS APPEARING IN THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT, 1957 REGARD MUST BE HAD TO THE PROVISIONS OF ENTRIES 53 AND 54 OF LIST I AND ENTRY 22 OF LIST II OF THE 7TH SCHEDULE TO THE CONSTITUTION TO UNDERSTAND THE EXCLUSION OF M INERAL OILS FROM THE DEFINITION OF MINERALS IN SECTION 3(A) OF THE 1957 ACT. REGARD MUST ALSO BE HAD TO THE FACT THAT MINERAL OILS IS SEPARATELY DEFINED IN SECTION 3(B) OF THE 1957 ACT TO INCLUDE NATURAL GAS AND PETROLEUM IN RESPECT OF WHICH PARLIAMENT HAS EXCLUSIVE JURISDICTION UNDER ENTRY 53 OF LIST I OF THE 7TH SCHEDULE AND HAD ENACTED AN EARLIER LEGISLATION I.E. OIL FIELDS (REGULATION AND DEVELOPMENT) ACT, 1948. READING SECTION 2(J) AND 2(JJ) OF THE MINES ACT, 1952 WHICH DEFINE MINES AND MINERALS AND TH E PROVISIONS OF THE OIL FIELDS (REGULATION AND DEVELOPMENT) ACT, 1948 SPECIFICALLY RELATING TO PROSPECTING AND EXPLORATION OF MINERAL OILS, EXHAUSTIVELY REFERRED TO EARLIER, IT IS ABUNDANTLY CLEAR THAT DRILLING OPERATIONS FOR THE PURPOSE OF PRODUCTION OF P ETROLEUM WOULD CLEARLY AMOUNT TO A MINING ACTIVITY OR A MINING OPERATION. VIEWED THUS, IT IS THE PROXIMITY OF THE WORKS CONTEMPLATED UNDER AN AGREEMENT, EXECUTED WITH A NON - RESIDENT ASSESSEE OR A FOREIGN COMPANY, WITH MINING ACTIVITY OR MINING OPERATIONS T HAT WOULD BE CRUCIAL FOR THE DETERMINATION OF THE QUESTION WHETHER THE PAYMENTS MADE UNDER SUCH AN AGREEMENT TO THE NON - RESIDENT ASSESSEE OR THE FOREIGN COMPANY IS TO BE ASSESSED UNDER SECTION 44BB OR SECTION 44D OF THE ACT. THE TEST OF PITH AND SUBSTANCE OF THE AGREEMENT COMMENDS TO US AS REASONABLE FOR ACCEPTANCE. EQUALLY IMPORTANT IS THE FACT THAT THE CBDT HAD ACCEPTED THE SAID TEST AND HAD IN FACT ISSUED A CIRCULAR AS FAR BACK AS 22.10.1990 TO THE EFFECT THAT MINING OPERATIONS AND THE EXPRESSIONS 'MININ G PROJECTS' OR 'LIKE PROJECTS' OCCURRING IN EXPLANATION 2 TO SECTION 9(1) OF THE ACT WOULD COVER RENDERING OF SERVICE LIKE IMPARTING OF TRAINING AND CARRYING OUT DRILLING OPERATIONS FOR EXPLORATION OF AND EXTRACTION OF OIL AND NATURAL GAS AND HENCE PAYMENT S MADE UNDER SUCH AGREEMENT TO A NON - RESIDENT/FOREIGN COMPANY WOULD BE CHARGEABLE TO TAX UNDER THE PROVISIONS OF SECTION 44BB AND NOT SECTION 44D OF THE ACT. WE DO NOT SEE HOW ANY OTHER VIEW CAN BE TAKEN IF THE WORKS OR SERVICES MENTIONED UNDER A PARTICULA R AGREEMENT IS DIRECTLY ASSOCIATED OR INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL. KEEPING IN MIND THE ABOVE PROVISION, WE HAVE LOOKED INTO EACH OF THE CONTRACTS INVOLVED IN THE PRESENT GROUP OF CASES AND FIND THAT THE BRIEF DESCRIPTION OF THE WORKS COVERED UNDER EACH OF THE SAID CONTRACTS AS CULLED OUT BY THE ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 10 APPELLANTS AND PLACED BEFORE THE COURT IS CORRECT. THE SAID DETAILS ARE SET OUT BELOW. S. NO. CIVIL APPEAL NO WORK COVERED UNDER THE CONTRACT 1. 4321 DRILL ING OF EXPLORATION WELLS AND CARRYING OUT SEISMIC SURVEYS FOR EXPLORATORY DRILLING. 2. 740 DRILLING, FURNISHING PERSONNEL FOR MANNING, MAINTENANCE AND OPERATION OF DRILLING RIG AND TRAINING OF PERSONNEL. 3. 731 DRILLING, FURNISHING PERSONNEL FOR MA NNING, MAINTENANCE AND OPERATION OF DRILLING RIG AND TRAINING OF PERSONNEL. 4. 1722 FURNISHING SUPERVISORY STAFF WITH EXPERTISE IN OPERATION AND MANAGEMENT OF DRILLING UNIT. 5. 729 CAPPING INCLUDING SUBDUING OF WELL, FIRE FIGHTING. 6. 738 CAPPING I NCLUDING SUBDUING OF WELL, FIRE FIGHTING. 7. 1528 ANALYSIS OF DATA TO PREPARE JOB DESIGN, PROCEDURE FOR EXECUTION AND DETAILS REGARDING MONITORING. 8. 1532 STUDY FOR SELECTION OF ENHANCED OIL RECOVERY PROCESSES AND CONCEPTUAL DESIGN OF PILOT TESTS. 9. 1520 ENGINEERING AND TECHNICAL SUPPORT TO ONGC IN IMPLEMENTATION OF CYCLIC STEAM STIMULATION IN HEAVY OIL WELLS. 10. 2794 ASSESSMENT AND PROCESSING OF SEISMIC DATA ALONG WITH ENGINEERING AND TECHNICAL SUPPORT IN IMPLEMENTATION OF CYCLIC STEAM S TIMULATION. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 11 11. 1524 CONDUCTING RESERVOIR STIMULATION STUDIES IN ASSOCIATION WITH PERSONNEL OF ONGC. 12. 1535 LABORATORY TESTING UNDER SIMULATED RESERVOIR CONDITIONS. 13. 1514 CONSULTANCY FOR OPTIMAL EXPLOITATION OF HYDROCARBON RESOURCES. 14. 2797 CONSULTANCY FOR ALL ASPECTS OF COAL 15. 6174 ANALYSIS OF DATA OF WELLS TO PREPARE A JOB DESIGN. 16. 1517 GEOLOGICAL STUDY OF THE AREA AND ANALYSIS OF SEISMIC INFORMATION REPORTS TO DESIGN 2 DIMENSIONAL SEISMIC SURVEYS. 17. 7226 OPINION ON H YDROCARBON RESOURCES AND FORESEEABLE POTENTIAL. 18. 7227 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE POTENTIAL. 19. 7230 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE POTENTIAL. 20. 6016 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE POTEN TIAL. 21. 6008 EVALUATION OF ULTIMATE RESOURCE POTENTIAL AND PRESENTATIONS OUTSIDE INDIA IN CONNECTION WITH PROMOTIONAL ACTIVITIES FOR JOINT VENTURE EXPLORATION PROGRAM. 22. 1531 REVIEW OF SUB - SURFACE WELL DATA, PROVIDE REPAIR PLAN OF WELLS AND SUPERVI SE REPAIRS. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 12 23. 733 REPAIR OF GAS TURBINE, GAS CONTROL SYSTEM AND INSPECTION OF GAS TURBINE AND GENERATOR. 24. 741 REPAIR AND INSPECTION OF TURBINES. 25. 737 REPAIR, INSPECTIO N AND OVERHAULING OF TURBINES. 26. 736 INSPECTION, ENGINE PERFORMANCE EVALUATION, INSTRUMENT CALIBRATION AND INSPECTION OF FAR TURBINES. 27. 1522 REPLACEMENT OF CHOKE AND KILL CONSOLES ON DRILLING RIGS. 28. 1521 INSPECTION OF GAS GENERATORS. 29. 1515 INSPECTION OF RIGS. 30. 2012 INSPECTION OF GENERATOR. 31. 1240 INSPECTION OF EXISTING CONTROL SYSTEM AND DEPUTING ENGINEER TO ATTEND TO ANY PROBLEM ARISING IN THE MACHINES. 32. 1529 INSPECTION OF DRILLING RIG AND VERIFICATION OF RELIABILITY OF CONTROL SYSTEMS IN THE DRILLING RIG. 33. 2008 EXPERT ADVICE ON THE DE VICE TO CLEAN INSID ES OF A PIPELINE. 34. 2795 FEASIBILITY STUDY OF RIG TO ASSESS ITS REMAINING USEFUL LIFE AND TO CARRY OUT STRUCTURAL ALTERATIONS. 35. 92 5 ENGINEERING ANALYSIS OF RIG. 36. 1519 IMPARTING TRAINING ON CASED HOLD PRODUCTION LOG EVAL UATION AND ANALYSIS. 37. 1533 TRAINING ON WELL CONTROL. 38. 1518 TRAINING ON IMPLEMENTATION OF SIX SIGMA CONCEPTS. 39. 1516 TRAINING ON IMPLEMENTATION OF SIX SIGMA CONCEPTS. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 13 40. 6023 TRAINING O N DRILLING PROJECT MANAGEMENT. 41. 2796 TRAINING IN SAFETY RATING SYSTEM AND ASSISTANCE IN DEVELOPMENT AND AUDI T OF SAFETY MANAGEMENT SYSTEM. 42. 1239 TO DEVELOP TECHNICAL SPECIFICATION FOR 3D SEISMIC APT MODULES OF WORK AND TO PREPARE BID PACKAGES. 43. 1527 SUPPLY SUPERVISION AND INSTALLATION OF S OFTWARE WHICH IS USED FOR ANALYSIS OF FLOW RATE OF MINERAL OIL TO DETERMINE RESERVOIR CONDITIONS. 44. 1523 SUPPLY, INSTALLATION AND FAMILIARIZATION OF SOFTWARE FOR PROCESSING SEISMIC DATA. THE ABOVE FACTS WOULD INDICATE THAT THE PITH AND SUBSTANCE OF EAC H OF THE CONTRACTS/AGREEMENTS IS INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL. THE DOMINANT PURPOSE OF EACH OF SUCH AGREEMENT IS FOR PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OILS THOUGH THERE MAY BE CERTAIN ANCIL LARY WORKS CONTEMPLATED THEREUNDER. IF THAT BE SO, WE WILL HAVE NO HESITATION IN HOLDING THAT THE PAYMENTS MADE BY ONGC AND RECEIVED BY THE NON - RESIDENT ASSESSEES OR FOREIGN COMPANIES UNDER THE SAID CONTRACTS IS MORE APPROPRIATELY ASSESSABLE UNDER THE PROV ISIONS OF SECTION 44BB AND NOT SECTION 44D OF THE ACT. ON THE BASIS OF THE SAID CONCLUSION REACHED BY US, WE ALLOW THE APPEALS UNDER CONSIDERATION BY SETTING ASIDE THE ORDERS OF THE HIGH COURT PASSED IN EACH OF THE CASES BEFORE IT AND RESTORING THE VIEW TA KEN BY THE LEARNED APPELLATE COMMISSIONER AS AFFIRMED BY THE LEARNED TRIBUNAL. 6.3 AS MENTIONED HERE - IN - BEFORE, THEIR LORDSHIPS OF THE HONBLE SUPREME COURT HAVE HELD THAT : THE PITH AND SUBSTANCE OF EACH OF THE CONTRACTS/AGREEMENTS IS INEXTRICABLY CON NECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL. THE DOMINANT PURPOSE OF EACH OF SUCH AGREEMENT IS FOR PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OILS THOUGH THERE MAY BE CERTAIN ANCILLARY WORKS CONTEMPLATED THEREUNDER. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 14 UNDER ART ICLE 141 OF THE CONSTITUTION, THE LAW DECLARED BY THE SUPREME COURT SHALL BE BINDING ON ALL COURTS WITHIN THE TERRITORY OF INDIA. ONCE THERE IS A PRONOUNCEMENT OF THE HIGHEST COURT OF THE LAND, THE SAME IS BINDING ON ALL COURTS, TRIBUNALS AND ALL AUTHORITI ES IN VIEW OF THIS ARTICLE. IF THE HONBLE SUPREME COURT HAS CONSTRUED THE MEANING OF A SECTION, THEN ANY DECISION TO THE CONTRARY GIVEN BY ANY OTHER AUTHORITY MUST BE HELD TO BE ERRONEOUS. IN THE INSTANT CASE, WE FIND THAT NEITHER THE AO NOR THE DRP HA S EXAMINED THE APPLICABILITY OF SECTION 44BB BY LOOKING INTO WHETHER THE PITH AND SUBSTANCE OF EACH OF THE CONTRACT/AGREEMENT ENTERED BY THE ASSESSEE IS INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL. THIS IS EVIDENT FROM THE ORDER OF THE DRP DATED 29.08.2018 PASSED U/S 144C(5) AND THE ASSESSMENT ORDER DATED 19.09.2018 PASSED BY THE AO U/S 143(3) R.W.S. 144C(5) AND 144C(13) OF THE ACT. THEREFORE, WE SET ASIDE THE ORDER OF THE AO AND RESTORE THE MATTER TO HIM TO MAKE AN ORDE R AFRESH AFTER EXAMINING EACH OF THE CONTRACT/AGREEMENT AND BY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN ONGC (SUPRA) MENTIONED AT PARA 6.2 HEREINBEFORE. WE DIRECT THE ASSESSEE TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. WE M AKE IT ABUNDANTLY CLEAR THAT IN THE DE NOVO PROCEEDINGS, THE AO WOULD EXAMINE THE CONTENTIONS OF THE ASSESSEE THAT (I) SINCE THE RECEIPTS EARNED FROM PROVISION OF SERVICES THROUGH VARIOUS VESSELS ARE COVERED U/S 44BB OF THE ACT, THE SAME SHOULD BE EXCLUDED FROM THE DEFINITION OF ROYALTY UNDER THE ACT UNDER CLAUSE (IVA) OF EXPLANATION 2 OF SECTION 9(1)(VI), (II) AS PER SECTION 90(2) OF THE ACT, THE ASSESSEE WOULD BE GOVERNED U/S 44BB OF THE ACT OR UNDER THE PROVISIONS OF DTAA, WHICH IS MORE BENEFICIAL TO TH E ASSESSEE, (III) SINCE THE ASSESSEE DOES NOT HAVE A PE IN INDIA AS PER CLAUSE 5 OF ARTICLE 5 OF DTAA(PRESENCE IN INDIA D URING AY 2015 - 16 FOR 106 DAYS IS LESS THAN 183 DAYS), THE REVENUES ARE NOT TAXABLE IN INDIA. IN VIEW OF THE BINDING NATURE OF THE ABO VE DECISION OF THE HONBLE SUPREME COURT, WE ARE NOT ADVERTING TO THE OTHER CASE - LAWS CITED BY BOTH SIDES. THE ASSESSEE WOULD FEEL FREE TO CITE THE OTHER CASE - LAWS BEFORE THE AO. THUS THE 2ND TO 8TH GROUND OF APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 15 7. THE LEVY OF INTEREST U/S 234B IS CONSEQUENTIAL IN NATURE. THE INITIATION OF PENAL TY U/S 271(1)(C) IS PREMATURE. 5. SINCE ALL THE ISSUES HAVE BEEN DISCUSSED AND DECIDED BY THE HONBLE ITAT IN THE ASSESEES OWN CASE AND SPECIFICALLY REMANDED BEFORE THE AO TO DECIDE AFRESH ON CERTAIN GUIDELINES MENTIONED IN THE ORDER, THEREFORE, IN THE SAID CIRCUMSTANCES, WE SET ASIDE THE FINDING OF THE ISSUES AND RESTORED THE ISSUES BEFORE THE AO TO DECIDE THE MATTER OF CONTROVERSY AFRESH IN VIEW OF THE DECISION OF THE H ONBLE ITAT IN THE ASSESSEES OWN CAS E BEARING ITA. NO.6642/M/2018 B Y GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, ALL THE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. REASONS FOR DELAY IN P RONOUNCEMENT OF ORDER 6.1 BEFORE PARTING, WE WOULD LIKE TO ENUMERATE THE CIRCUMSTANCES WHICH HAVE LED TO DELAY IN PRONOUNCEMENT OF THIS ORDER. THE HEARING OF THE MATTER WAS CONCLUDED ON 07/02/2020 AND IN TERMS OF RULE 34(5) OF INCOME TAX (APPELLATE TRIBUN AL) RULES, 1963, THE MATTER WAS REQUIRED TO BE PRONOUNCED WITHIN A TOTAL PERIOD OF 90 DAYS. AS PER SUB - CLAUSE (C) OF RULE 34(5), EVERY ENDEAVOR WAS TO BE MADE TO PRONOUNCE THE ORDER WITHIN 60 DAYS AFTER CONCLUSION OF HEARING. HOWEVER, WHERE IT IS NOT PRACT ICABLE TO DO SO ON THE GROUND OF EXCEPTIONAL AND EXTRAORDINARY CIRCUMSTANCES, THE BENCH COULD FIX A FUTURE DATE OF PRONOUNCEMENT OF THE ORDER WHICH SHALL NOT ORDINARILY BE A DAY BEYOND A FURTHER PERIOD OF 30 DAYS. THUS, A PERIOD OF 60 DAYS HAS BEEN PROVIDE D UNDER THE EXTANT RULE FOR PRONOUNCEMENT OF THE ORDER. THIS PERIOD COULD BE EXTENDED BY THE BENCH ON THE GROUND OF EXCEPTIONAL AND EXTRAORDINARY CIRCUMSTANCES. HOWEVER, THE EXTENDED PERIOD SHALL NOT ORDINARILY EXCEED A PERIOD OF 30 DAYS. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 16 6.2 ALTHOUGH THE ORDER WAS WELL DRAFTED AS WELL AS APPROVED BEFORE THE EXPIRY OF 90 DAYS, HOWEVER, UNFORTUNATELY, ON 24/03/2020, A NATIONWIDE LOCKDOWN WAS IMPOSED BY THE GOVERNMENT OF INDIA IN VIEW OF ADVERSE CIRCUMSTANCES CREATED BY PANDEMIC COVID - 19 IN THE COUNTRY. THE LOCKDOWN WAS EXTENDED FROM TIME TO TIME WHICH CRIPPLED THE FUNCTIONING OF MOST OF THE GOVERNMENT DEPARTMENTS INCLUDING INCOME TAX APPELLATE TRIBUNAL (ITAT). THE SITUATION LED TO UNPRECEDENTED DISRUPTION OF JUDICIAL WORK ALL OVER THE COUNTRY AND THE ORDER C OULD NOT BE PRONOUNCED DESPITE LAPSE OF CONSIDERABLE PERIOD OF TIME. THE SITUATION CREATED BY PANDEMIC COVID - 19 COULD BE TERMED AS UNPRECEDENTED AND BEYOND THE CONTROL OF ANY HUMAN BEING. THE SITUATION, THUS CREATED BY THIS PANDEMIC, COULD NEVER BE TERMED AS ORDINARY CIRCUMSTANCES AND WOULD WARRANT EXCLUSION OF LOCKDOWN PERIOD FOR THE PURPOSE OF AFORESAID RULE GOVERNING THE PRONOUNCEMENT OF THE ORDER. ACCORDINGLY, THE ORDER IS BEING PRONOUNCED NOW AFTER THE RE - OPENING OF THE OFFICES. 6.3 FACED WITH SIMILAR FACTS AND CIRCUMSTANCES, THE CO - ORDINATE BENCH OF THIS TRIBUNAL COMPRISING - OFF OF HONBLE PRESIDENT AND HONBLE VICE PRESIDENT, IN ITS RECENT DECISION TITLED AS DCIT V/S JSW LIMITED (ITA NOS. 6264 & 6103/MUM/2018) ORDER DATED 14/05/2020 HELD AS UNDER: - 7 . HOWEVER, BEFORE WE PART WITH THE MATTER, WE MUST DEAL WITH ONE PROCEDURAL ISSUE AS WELL. WHILE HEARING OF THESE APPEALS WAS CONCLUDED ON 7TH JANUARY 2020, THIS ORDER THEREON IS BEING PRONOUNCED TODAY ON 14TH 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 FOLLOWIN G MANNERS: ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 17 (A) THE BENCH MAY PRONOUNCE THE ORDER IMMEDIATELY UPON THE CONCLUSION OF THE HEARING. (B) IN CASE WHERE THE ORDER IS NOT PRONOUNCED IMMEDIATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A DATE FOR PRONOUNCEMENT. ( C) IN A CASE WHERE NO DATE OF 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 TH E 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 SUPPLIED BY US NOW) BE A DAY BEYOND A FURTHER PERIOD OF 30 DAYS AND DUE NOTIC E OF THE DAY SO FIXED SHALL BE GIVEN ON THE NOTICE BOARD. 8. QUITE CLEARLY, ORDINARILY THE ORDER ON AN APPEAL SHOULD BE PRONOUNCED BY THE BENCH WITHIN NO MORE THAN 90 DAYS FROM THE DATE OF CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT TO NOTE THAT T HE 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 RESTAURANT 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 SHORTEST REASONABLE TIME AND FOLLOWED STRICTLY BY ALL THE BENCHES OF THE T RIBUNAL. 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 THEM WITHIN A PERIOD OF THREE MONTHS FROM THE DATE CASE IS CLOSED FOR JUD GMENT . 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 QUESTION THEN ARISES WHETHER THE PASSING OF THIS ORDER, BEYOND NINETY DAYS, WAS NECESSITATED BY ANY EXTRAORDINARY CIRCUMSTANCES. ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 18 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SITUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 D AYS, 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 INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON A CCOUNT 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 DA YS AFTER THE LIFTING OF LOCKDOWN. HONBLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESIDES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MA DE 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 APRI L 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 STAND THAT, THE CORONAVIRUS SHOULD BE CONSI DERED 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 ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 19 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 PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTI C VIEW OF THE RULE REQUIRING PRONOUNCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDINGAT 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 THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. THE TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQUIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CONSONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TIME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT A CT 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 ORDER BEING PASSED BY THE TRIBUNAL BEYO ND 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 TIMEBOUND 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 MOTU BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOCKDOW N 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 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 ITA NO. 5999 /M/201 9 A.Y. 2016 - 17 20 ANY, BAR ON THE DISCRETION OF THE BENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BETWEEN THE POINT OF T IME 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. DRIVING STRENGTH FROM THE RATIO OF AFORESAID D ECISION, WE EXCLUDE THE PERIOD OF LOCKDOWN WHILE COMPUTING THE LIMITATION PROVIDED UNDER RULE 34(5) AND PROCEED WITH PRONOUNCEMENT OF THE ORDER. 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNC ED IN THE OPEN COURT ON 07 / 08 /2020 SD/ - SD/ - ( PRAMOD KUMAR ) (AMARJIT SINGH) VICE PRESIDENT JUDICIAL MEMBER MUMBAI; DATED : 07 / 08 /2020 VIJAY PAL SINGH /SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI