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TMI Blog2020 (7) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of CIT Vs. Universal Medicare (P) Ltd. [ 2010 (3) TMI 323 - BOMBAY HIGH COURT ]. Accept the view taken by the CIT(A) that as the assessee company is not a shareholder in either of the aforesaid lender companies viz. (i). M/s Vrisa Creations Pvt. Ltd.; and (ii). M/s Sesha-sai projects Pvt. Ltd., therefore, the amount received from them could not have been brought to tax as deemed dividend within the meaning of Sec. 2(22)(e) in its hands. Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold the same. 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 ] X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from M/s Sesha-sai Infraprojects Pvt. Ltd was concerned, it was claimed that the same was an advance that was received way back in the F.Y 2008-09 towards booking amount for the offices in a project developed by the assessee company. In the backdrop of its aforesaid claim, it was submitted by the assessee that the respective receipts could not be assessed in its hands as 'deemed dividend' within the meaning of Sec. 2(22)(e) of the Act. However, the A.O was not persuaded to subscribe to the contentions advanced by the assessee. It was observed by the A.O that the shareholding pattern of the assessee company and the aforesaid lenders viz. (i). M/s Vrisa Creation Pvt. Ltd; and (ii). M/s Sesha-sai Infraprojects Pvt. Ltd. during the year under consideration was as under: (A). M/s Vrisa Infotech Pvt. Ltd (assessee company) (As on 31.03.2011) Sr. No. Name No. of shares Share Capital 1. Praveen Tulsiram Sankpal 9999 shares of 100 each ₹ 9,99,900/- 2. Rajshree Praveen Sankpal 1 share of 100 ₹ 100/- Total 1000 shares ₹ 10,00,000/- (B). M/s Sesha-sai Infraprojects Pvt. Ltd. (As on 31.03.2011) Sr. No. Name No. of shares Share Capital 1. Pravee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the lending company, the provisions of Sdc. 2(22)(e) would not be attracted. The CIT(A) supported his aforesaid view by relying on the judgment of Hon'ble High Court of Bombay in the case of CIT Vs. Impact Containers (P) Ltd. (2014) 367 ITR 346 (Bom) and ACIT Vs. Britto Amusement Pvt. Ltd. (2014) 360 ITR 544 (Bom). On the basis of his aforesaid observations the CIT(A) vacated the addition made by the A.O u/s 2(22)(e) aggregating to ₹ 3,72,94,335/-[₹ 87,38,000/- (+) ₹ 2,85,56,335/-]. 5. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Departmental representative (for short 'D.R') relied on the assessment order. Per contra, the ld. Authorised representative (for short 'A.R') relied on the CIT(A) order. It was submitted by the ld. A.R that the CIT(A) after duly appreciating that the assessee company was not a shareholder in either of the lender companies had rightly vacated the addition made by the A.O u/s 2(22)(e) of the Act. 6. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record as well as the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sec. 2(22)(e) in its hands. Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold the same. 7. The appeal filed by the revenue is dismissed in terms of our aforesaid observations. 8. We shall now advert to the cross-objections filed by the assessee, which are found to be merely supportive in nature. On a perusal of the records, we find, that the cross-objections filed by the assessee are admittedly delayed by a period of 300 days. An application alongwith an 'affidavit' explaining the reason leading to delay in filing of the cross-objections has been filed before us. On a perusal of the application seeking condonation of delay in filing of the cross-objections, we find, that the same is stated to have arisen on account of some confusion as regards the issues involved in the appeal, which was thereafter resolved by taking advice of a senior counsel. As the genarlized reasoning given to justify the delay involved in filing of the cross-objection does not inspire any confidence, therefore, we decline to condone the same. Be that as it may, as the appeal of the revenue has been dismissed by us, therefore, the cross-objections filed by the assessee which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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. 11. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 calculati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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