TMI Blog2020 (8) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... lain the reasons for offering of compensation under the head house property income in subsequent years, in our view, stands on thin ice, hence not acceptable. Validity of Reopening of assessment u/s 147 - HELD THAT:- Admittedly, the return of income filed by the assessee was initially processed under section 143(1) and was not subject to scrutiny. Therefore, the Assessing Officer never had occasion to verify various claims made by the assessee in the return of income. When in the course of assessment proceedings for the assessment year 2012 13, the Assessing Officer was informed about the receipt of compensation from NTCL, he verified all the relevant fact and thereafter concluded that the compensation received by the assessee is assessable under the head income from house property. On the basis of such information received in assessment year 2012 13, the Assessing Officer has re opened the assessment under section 147 of the Act in the impugned assessment year. We do not find any legal infirmity in the action of the Assessing Officer in re opening the assessment under section 147 of the Act. - Decided against assessee. Order being pronounced after ninety (90) days of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment proceedings, the Assessing Officer called upon the assessee to explain as to why compensation received from NTCL should not be assessed as income under the head house property. In response to the query raised by the Assessing Officer, the assessee filed its objection on 15th September 2017, firstly objecting to the re opening of assessment under section 147 of the Act and secondly also objecting to the treatment of the compensation received as house property income. The Assessing Officer disposed off all the objections of the assessee separately vide order dated 18th September 2017. Thereafter, the Assessing Officer proceeded to complete the assessment. While doing so, he found that in assessment year 2012 13, similar compensation received by the assessee was assessed under the head income from house property and the assessee accepted the same. Further, he found that similar compensation received by the assessee in assessment years 2013 14 and 2014 15 was voluntarily offered by the assessee as income under the head income from house property by filing revised returns of income. Though, the assessee relied upon various judicial precedents in support of its claim that the compen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) CIT v/s Bokaro Steel Ltd., [1999] 236 ITR 315 (SC); and ii) CIT v/s Karnal Co operative Sugar Mills Ltd., [2000] 243 ITR 002 (SC). 8. As regards the validity of re opening of assessment under section 147 of the Act, the learned Counsel for the assessee submitted that merely relying upon the assessment order passed for the assessment year 2012 13, the Assessing Officer has re opened the assessment under section 147 of the Act. He submitted that since the re opening of assessment is on borrowed satisfaction, it is invalid. In support of such contention, the learned Counsel for the assessee relied upon the decision of the Tribunal, Delhi Bench, in Col. Jaspal Singh v/s ITO, ITA no.6321/Del./2016, dated 15th March 2017. He submitted that merely because the assessee did not contest the issue in assessment year 2012 13, it cannot be said that the assessee has accepted the compensation received as income from house property. Further, the learned Counsel for the assessee submitted that in the assessment year 2012 13, penalty under section 271(1)(c) of the Act on the addition made under income from house property has been deleted by the Tribunal while considering assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll. Therefore, in our opinion, the compensation received by the assessee has been correctly assessed under the head income from house property. 11. The decisions relied upon by the learned Authorised Representative would not be applicable to the facts of the present case as in the instant case, the assessee itself in the subsequent assessment years has offered the compensation as income from house property. The assessee cannot be permitted to change the head of income according to his own sweet will and convenience. The contention of the learned Counsel for the assessee to explain the reasons for offering of compensation under the head house property income in subsequent years, in our view, stands on thin ice, hence not acceptable. 12. As regards the validity of re opening of assessment under section 147 of the Act, admittedly, the return of income filed by the assessee was initially processed under section 143(1) of the Act and was not subject to scrutiny. Therefore, the Assessing Officer never had occasion to verify various claims made by the assessee in the return of income. When in the course of assessment proceedings for the assessment year 2012 13, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W Limited, ITA Nos.6264 6103/Mum/2018, dated 14th May 2020, after interpreting rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963 as well as various decisions of the Hon ble Supreme Court as well as the Hon ble Jurisdictional High Court held that due to the extraordinary situation prevailing due to the pandemic, the lockdown period has to be excluded for the purpose of limitation in respect of pronouncement of order as per rule 34(5). The relevant observation of the Bench in this regard is reproduced hereunder for better clarity: 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 following manners: - (a) The Bench may pronounce the order immediately upon the conclusion of the hearing. (b) In case where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 Hon ble 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Hon ble jurisdictional High Court and Hon ble Supreme 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 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 ..... 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