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TMI Blog2020 (8) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... esident company, is engaged in construction business. For the assessment year under dispute, the assessee filed its return of income on 13th October 2010, declaring loss of Rs. 4,93,963. Initially, the return of income filed by the assessee was processed under section 143(1) of the Act accepting the loss returned. Subsequently, the Assessing Officer found that the assessee had received compensation from M/s. National Textile Corporation Ltd. (NTCL) vide a decree passed by the Court of Small Causes at Bombay on 19th July 2007. He further found that while completing assessment for the assessment year 2012-13, the Assessing Officer had brought such compensation to tax as income under the head house property. The aforesaid decision of the Assessing Officer was not contested by the assessee. Whereas, in the impugned assessment year, the assessee has not offered such compensation to tax under the head income from house property. Therefore, alleging escapement of income, the Assessing Officer re-opened the assessment under section 147 of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to explain as to why compensation received from NTCL should n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted, the assessee has not entered into any rent agreement with NTCL. He submitted that for this reason only, the NTCL was directed to pay compensation to the assessee as per the order of the Hon'ble Jurisdictional High Court. He submitted, the compensation received by the assessee since is incidental to carrying on the business and there was no intention of earning any rental income, the compensation received was rightly set-off against work-in-progress. In support of his contention, the learned Counsel relied upon the following decisions:- i) Chennai Properties& Investments Ltd. v/s CIT, [2015] 373 ITR 673 (SC); and ii) Rayala Corporation Pvt. Ltd. v/s ACIT, [2016]386 ITR 500 (SC). 7. The learned Authorised Representative further submitted that the compensation received by the assessee is in the nature of mesne profits received by the assessee on account of damages for deprivation and use of occupation. Hence, the compensation received is capital in nature. In support of such contention, he relied upon the following decisions:- 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears from the facts on record, like in the impugned assessment year, in other assessment years also the assessee did not offer the compensation received as house property income, but adjusted it against WIP. In assessment year 2012-13, the Assessing Officer noticing the aforesaid fact in course of assessment proceedings, brought the compensation received to tax under the head income from house property. Undisputedly, the aforesaid decision of the Assessing Officer in assessment year 2012-13 was accepted by the assessee. Further, in assessment years 2013-14 and 2014-15 also, the assessee offered the compensation received under the head income from house property by revising its return of income filed earlier. Thus, the aforesaid conduct of the assessee clearly shows that in three subsequent assessment years the assessee have accepted the rental income as income from house property. That being the case, the rule of consistency would clearly apply insofar as treatment of compensation received in the impugned assessment year as well. Therefore, in our opinion, the compensation received by the assessee has been correctly assessed under the head income from house property. 11. The decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under section 271(1)(c) of the Act, these issues are either consequential or premature at this stage. Hence, there is no need to adjudicate this ground. Accordingly, this ground is dismissed. 15. In the result, appeal is dismissed. 16. Before we part, it is necessary for us to deal with a procedural issue relating to pronouncement of the order. The hearing of this appeal was concluded on 26.02.2020. As per rule 34(5) of the Income Tax (Appellate Tribunal) Rules,1963, ordinarily the appeal order has to be pronounced before expiry of ninety (90) days from the date of conclusion of hearing of appeal. However, on 24.03.2020 a nationwide lockdown was enforced by the Government of India in view of COVID-19 pandemic. Due to the unprecedented situation arising out of such lockdown all activities ceased and no normal official work could be done. For this reason only the appeal order could not be pronounced within the period of 90 days. Being faced with a similar situation the Tribunal in case of DCIT V/s JSW 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 ruled 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 the passing of this order, beyond ninety days, was necessitated by any ―extraordinary‖ circumstances. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice de ..... 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