TMI Blog2020 (7) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... in a bonafide manner, and in his return filed in compliance to notice issued u/s 148 of the Act, had withdrawn the claim of deduction u/s 35(1)(ii) that was earlier raised by him in the Original return of income nothing has been brought to our notice from where it could be gathered that the aforesaid institute had categorically claimed to have provided a bogus/accommodation entry to the assessee before us. Be that as it may, as observed by us hereinabove, there is nothing discernible from record which would conclusively prove to the hilt that the assessee had raised a false claim of deduction. In fact, the conduct of the assessee who had in all fairness withdrawn the claim of deduction that was earlier raised by him u/s 35(1)(ii) in his Original return of income inspires substantial confidence as regards the genuineness and veracity of the said claim. As observed in CIT Vs. Upendra V. Mithani [ 2009 (8) TMI 1159 - BOMBAY HIGH COURT ] wherein the High Court had concurred with the view taken by the Tribunal, that if the assessee gives an explanation which is unproved but not disproved, i.e it is not accepted but circumstances do not lead to the reasonable and positive inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared an income of ₹ 43,88,580/-. Income of the assessee was assessed by the A.O under Sec. 143(3) r.w.s 147, vide his order dated 21.06.2017 at the returned income. The A.O while culminating the assessment initiated penalty proceedings under Sec. 271(1)(c) for furnishing of inaccurate particulars of income by the assessee as regards the claim of deduction under Sec. 35(1)(ii) of ₹ 10,50,000/-. 3. Subsequently, the A.O issued a Show cause notice to the assessee, therein calling upon him to explain as to why penalty under Sec. 271(1)(c) for furnishing of inaccurate particulars of income as regards his claim of deduction under Sec. 35(1)(ii) may not be imposed on him. The reply filed by the assessee did not find favour with the A.O who imposed a penalty under Sec. 271(1)(c) of ₹ 3,24,450/- for raising of a non-genuine claim of deduction. 4. Aggrieved, the assessee assailed the order imposing penalty under Sec. 271(1)(c) in appeal before the CIT(A). Observing, that the assessee had intentionally raised a false claim of deduction u/s 35(1)(ii), which was withdrawn by him only after a notice u/s 148 was issued, the CIT(A) upheld the penalty imposed by the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivious of the fact that no clinching evidence had emerged which would prove beyond doubt that the assessee had not made any genuine contribution to the said institute. In fact, we find that in a host of judicial pronouncements by co-ordinate benches of the Tribunal, as under: 1. ACIT, Mumbai Vs. Shirish Lakhamshi Keniya ITA 5385/Mum/2018, A.Y. 2013-14, ITAT Mumbai, dated 29.01.2020. 2. M/s Pooja Hardware Pvt. Ltd Vs. Assistant Commissioner of Income, Mumbai, ITA 3712/Mum/2018, A.Y. 2012-13, dated 28.10.2019. 3. Mahesh C Thakkar Vs. ACIT, Mumbai ITA 5121 5122/Mum/2018, A.Y.2012-13 and 2014-15, dated 21.08.2019. 4. Borsad Tobacco Co. Pvt. ltd. Vs. DCIT Cen Circle 8(1), Mumbai ITA 2040/Mum/2018, A.Y. 2014-15, dated 17.06.2019. 5. Urnish Jewellers Vs. Asst. CIT, Mumbai, ITA 1583/Mum/2019, A.Y. 2012-13, dated 22.05.2019. 6. M/s Motilal Dahyabhai Jhaveri Sons vs. Asst. CIT, Mumbai ITA 3453/Mum/2018 and 1584/Mum/2019, AY.2013-14 and 2014-15, dated 24.04.2019 7. Kitchen Essential Vs. ACIT, Thane, ITA 6672 6673/Mum/2013, A.Y. 2013-14 and 2014-15, dated 15.01.2019. 8. M/s Avis Life Care Pvt. ltd .Vs. DCIT, Jaipur, ITA 989/JP/2018, AY 2014-15, dated 20.06.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent concealed income as with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assesse s case is false. The view taken by the Tribunal is a reasonable and possible view. In the case of the present assesse before us, his claim that he had in his Original return of income made a genuine contribution to the aforesaid institute viz. School of Human Genetics Population Health, and on the said basis had therein raised the claim of deduction u/s 35(1)(ii), we find had not been disproved by the revenue. Accordingly, in our considered view, though the aforesaid explanation of the assessee is unproved but as it falls short of being in the nature of a disproved explanation, therefore, he could not have been visited with penalty u/s 271(10(c) of the Act. 7. Resultantly, not finding ourselves to be in agreement with the view taken by the lower authorities, we set aside the order of the CIT(A) and quash the penalty u/s 271(1)(c) of Rs, 3,24,450/- imposed by the A.O. 8. Before parting, we may herein deal with a procedural i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 or not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any extraordinary circumstances. 9. We find that the aforesaid issue after exhaustive deliberations had been answered by a coordinate bench of the Tribunal viz. ITAT, Mumbai F Bench in DCIT, Central Circle-3(2), Mumbai Vs. JSW Limited Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under: Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon ble Prime Minister of India 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. The epidemic situation 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 ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onouncement 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 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)], Hon ble 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 Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made time bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suo motu by the Hon ble High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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