TMI Blog2020 (7) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO during the assessment proceedings. See MALABAR INDUSTRIAL CO. LTD. VERSUS COMMISSIONER OF INCOME-TAX [ 2000 (2) TMI 10 - SUPREME COURT] - Decided against assessee. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ] - ITA. No: 95/RJT/2016 - - - Dated:- 1-6-2020 - Shri Waseem Ahmed, Accountant Member And Shri Madhumita Roy, Judicial Member For the Appellant : Shri D. M. Rindani, AR For the Respondent : Shri Ranjeet Singh, Sr. DR. ORDER PER BENCH, 1. This appeal filed by the Assessee is directed against the order of the Ld. CIT(A), Rajkot-I dated 14.03.2016 pertaining to A.Y. 2011-12. 2. The assessee has raised the following grounds of appeal: 1.The Hon ble Principal Commissioner of Income Tax, Rajkot-1, Rajkot has erred in wrongly passing the order u/s. 263 of the IT Act is unwarranted, unjustified and bad in law. 3. The issue raised by the assessee is that the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment framed by the AO under section 143(3) of the Act, was held as erroneous insofar prejudicial to the interest of revenue on account of non-verification of the difference in the amount of gross receipts shown by the assessee in the books of accounts viz a viz the gross receipts shown in the form 26AS. 10. However, the ld. AR before us claimed that the relevant queries were raised by the AO during the assessment proceedings. Therefore we find pertinent to refer to the queries raised by the AO during the assessment proceedings and the reply of the assessee qua to such queries. The relevant queries raised by the AO as per the assessee in the notice issued under section 142(1) of the Act, dated 5-9-2013 read as under: 6. Furnish the TDS credit with reconciliation statement for the financial year under consideration. 8. Please furnish the copy of work orders of contract and work completion certificates of the contracts carried out during the year under consideration. 11. The above queries were answered by the assessee vide letter dated 5th October 2013 as detailed under: 6. Details of TDS credit with reconciliation statement for the financial year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' is not an expression of art and is not defined in the Act. Understood in its ordinary meaning, it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the revenue. If due to an erroneous order of the ITO, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue . The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enge of Covid 2019 outbreak, resulting the lockdown in the country, the orders though substantially prepared but could not be pronounced for the unavoidable reasons within the maximum period of 90 days. In such circumstances we find that the Hon ble 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 observing as under: 9. 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. 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompute the period of 90 days by excluding at 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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