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TMI Blog2020 (7) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... alter the aforesaid ground of appeal" 2. Briefly stated, the assessee who is a life insurance agent and consultant had filed his return of income for A.Y 2013-14 on 15.07.2013, declaring a total income of Rs. 33,38,580/-. Subsequently, on the basis of information received from the Directorate of Investigation, Kolkata, that the assessee was a beneficiary of a bogus claim of deduction of Rs. 10,50,000/- u/s 35(1)(ii) in relation to a nongenuine contribution of Rs. 6,00,000/- made to School of Human Genetics & Population Health, his case was reopened under Sec. 147 of the Act. Notice under Sec. 148, dated 23.03.2017 was issued to the assessee. In compliance to the notice issued under Sec. 148 the assessee filed his return of income on 30.03.2017, wherein he after withdrawing his earlier claim of deduction u/s 35(1)(ii) of Rs. 10,50,000/- declared an income of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income by raising a nongenuine claim of donation. 6. We have given a thoughtful consideration to the issue before us and are unable to persuade ourselves to subscribe to the view taken by the lower authorities. In our considered view, the assessee on learning about the fact that School of Human Genetics & Population Health was found to have indulged in ingenuine activities, had thus, in the return of income filed by him in compliance to Notice u/s 148, had in all fairness withdrawn the claim of deduction u/s 35(1)(ii) of the Act, that was earlier raised by him in the 'Original' return of income. At this stage, we may herein observe that though serious irregularities were found in the activities of the aforesaid institute viz. School of Human Genetics & Population Health, but then, we cannot also remain oblivious 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income inspires substantial confidence as regards the genuineness and veracity of the said claim. As observed by the Hon'ble High Court of Bombay in CIT Vs. Upendra V. Mithani [ITA (L) No.1860 OF 2009, dated 05.08.2009], 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 inference that the assesse's case is false, then no penalty u/s 271(1)(c) could be imposed. It was observed by the Hon'ble High Court as under: " The Commissioner of Income Tax (A) has rightly taken a view that no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served as under: "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 Tribunal. 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 judgment". In the rule 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 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 answer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrolled' 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 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 pedantic 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 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 Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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