Mahesh Enterprise, Gandhinagar V. The Income Tax Officer, Ward-3, Gandhinagar

ITA 926/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0942 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-01-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Corroborative evidences

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CBENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 926/AHD/2017 / ASSTT. YEAR: 2012-2013 M/S MAHESH ENTERPRISE , NR. G.H.U. STAND, SECTOR-16, GANDHINAGAR. PAN: AAFFM7575D VS. I.T.O . , WARD-3, GANDHINAGAR. ( APPLICANT ) ( RESPON D ENT ) ASSESSEE BY : SHRI PRITESH SHAH , A.R REVENUE BY : SHRI L.P. JAIN , SR .D. R /DATE OF HEARING : 16/01/2020 /DATE OF PRONOUNCEMENT: 01/06/2020 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)GANDHINAGAR, AHMEDABAD DATED 22/02/2017 (IN SHORT LD.CIT(A)) A RISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S.144OF THE INCOME TA X ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 30/03/2015 RELEVANT TO THE ASSESSMENT YEAR 2012- 2013. ITA NO.926/AHD/2017 ASSTT. YEAR 2012-13 2 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL. 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CON FIRMING THE DISALLOWANCE OF EXPENSES AMOUNTING TO RS.6,43,837/- SUCH DISALLOWANCE IS REQ UESTED TO BE DELETED. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CON FIRMING THE ADDITION OF UNSECURED LOAN AMOUNTING TO RS.57,10,450/- SUCH ADDITION IS REQUES TED TO BE DELETED. YOUR APPELLANT PRAYS FOR LEAVE TO ADD, TO ALTER AND /OR TO AMEND THE ABOVE GROUND BEFORE THE FINAL HEARING OF THE APPEAL. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE BEFORE US SUBMITTED THAT THE ASSESSEE HAS FILED THE NECESSARY DETAILS B EFORE THE LD. CIT-A IN THE FORM OF THE PAPER BOOK DURING THE PROCEEDINGS. A REMAND REPORT WAS ALSO CALLED UPON BY HIM FROM THE AO WHO RECOMMENDED TO DELETE THE AD DITION IN PART. ACCORDINGLY, THE LD. CIT-A DELETED THE ADDITION IN PART. AS SUCH THE LD. AR CONTENDED THAT ALL THE DETAILS WERE AVAILABLE BEFORE THE LD. CIT-A BUT HE HAS NOT CONSIDERED THE SAME AND DECIDED THE ISSUE ONLY AFTER CONSIDERING THE RE MAND REPORT. 2.1 THE LD. AR ALSO CONTENDED THAT THE DETAILS FILE D DURING THE REMAND PROCEEDINGS BEFORE THE AO HAS ALSO NOT BEEN CONSIDE RED BY THE AO. ACCORDINGLY, THE LEARNED A.R BEFORE US PRAYED TO RESTORE THE APP EAL TO THE FILE OF THE AO FOR FRESH ADJUDICATION AS PER THE PROVISION OF LAW. 3. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A SSESSEE WAS GIVEN ENOUGH OPPORTUNITIES TO RAISE HIS POINT OF CONTENTION. BUT HE REMAINED SILENT. THEREFORE THE ASSESSEE SHOULD NOT BE GIVEN FURTHER OPPORTUNIT Y BUT THE LD. DR LEFT THE ISSUE AT THE DISCRETION OF THE BENCH. 4. HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES A ND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING D ISCUSSION WE NOTE THAT THE ASSESSEE WAS AFFORDED SEVERAL OPPORTUNITIES TO RAIS E HIS POINT OF ARGUMENTS BEFORE THE AO AND THE LD. CIT-A DURING THE RESPECTIVE PROC EEDING BEFORE THEM. BUT THE ASSESSEE REMAINED SILENT. HOWEVER, WE NOTE THAT THE PAPER BOOK FILED BY THE ITA NO.926/AHD/2017 ASSTT. YEAR 2012-13 3 ASSESSEE BEFORE THE LD. CIT-A WHICH WAS ALSO FORWAR DED TO THE AO FOR THE REMAND REPORT HAS NOT BEEN CONSIDERED BY THE AUTHORITIES B ELOW. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY WE ARE INCLINED TO GIVE TH E ASSESSEE ONE MORE OPPORTUNITY TO FILE SUPPORTING EVIDENCES IN SUPPORT OF ITS RETU RN OF INCOME. HOWEVER, WE AT THE SAME TIME WANT TO IMPOSE SOME COST ON THE ASSESSEE FOR HIS NEGLIGENT APPROACH ADOPTED BY HIM IN PROSECUTING HIS CASE BEFORE THE A UTHORITIES BELOW. AS SUCH THE ASSESSEE IS DIRECTED TO DEPOSIT SUM OF RS. 5000/- I N THE INCOME TAX OFFICE BEFORE THE COMMENCEMENT OF THE PROCEEDING BEFORE THE AO. A CCORDINGLY, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THE ISSUE TO T HE FILE OF THE AO FOR FRESH ADJUDICATION AS PER THE PROVISION OF LAW. HENCE, TH E GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. 5. BEFORE WE PART WITH THE ISSUE/APPEAL AS DISCUSSE D ABOVE, IT IS PERTINENT TO NOTE THAT THE CLAUSE OF RULE 34 OF THE APPELLATE TRIBUNAL 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 THE TOTAL T IME 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, RES ULTING THE LOCKDOWN IN THE COUNTRY, THE ORDERS THOUGH SUBSTANTIALLY PREPARED B UT COULD NOT BE PRONOUNCED FOR THE UNAVOIDABLE REASONS WITHIN THE MAXIMUM PERIOD O F 90 DAYS. IN SUCH CIRCUMSTANCES WE FIND THAT THE HONBLE MUMBAI TRIBU NAL 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 ITA NO.926/AHD/2017 ASSTT. YEAR 2012-13 4 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 M AHARASHTRA 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 GR AVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CAS E, 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 UNPRECED ENTED 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 WH ICH 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, BESI DES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COU RT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SH ALL 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 SH ALL 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 D ATED 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 APPROPRI ATE, 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 AND THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DI SASTER 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 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 UNPREC EDENTED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBT EDLY, 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 BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VID E JUDGMENT DATED 15 TH 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 EXTENDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUOMOTUBY HONBLE JURISDI CTIONAL HIGH COURT AND HONBLE ITA NO.926/AHD/2017 ASSTT. YEAR 2012-13 5 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 W HICH 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 ANY, BAR ON THE DISCRETION OF THE B ENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BET WEEN 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 3 4(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON TH E NOTICE BOARD. 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. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 01/06/2020 AT A HMEDABAD. SD/- SD/- ( RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT TRUE COPY ACCOUNTANT MEMBER () (((((((( AHMEDABAD; DATED 01/06/2020 MANISH / COPY OF THE ORDER FORWARDED TO : ! ' / BY ORDER, # / ' $% ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. !'## , / DR, ITAT, 6. '$%& / GUARD FILE.