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TMI Blog2020 (9) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... not justified to uphold the action of the Ld. Assessing Officer in initiating proceedings u/s 148 of the Income Tax Act, 1961. 2. That the Ld. Commissioner of Income Tax (Appeals)-3, Gurgaon gravely erred in upholding the action of the Ld. Assessing Officer in making and addition of Rs. 22,37,80,889/- representing the sale proceeds of listed equity shares held by the Appellant for more than 12 months by invoking the provisions of Sec. 68 of the Act by ignoring the relevant specific factgs and circumstances of the case any by relying on extraneous arguments and evidences, including in particular, circumstantial evidence, which has no bearing and applicability to the case. 3. That the Ld. Commissioner of Income Tax (Appeals)-3, Gurgaon was not justified to uphold the action of the Ld. Assessing Officer in treating the transactions relating to purchase and sale of equity shares as ingenuine transactions. 4. That the Ld. Commissioner of Income Tax (Appeals)-3, Gurgaon further gravely erred in upholding the action of the Ld. Assessing Officer in making an addition of Rs. 1,40,77,758/- on account of alleged commission expenses paid by the Appellant for arranging the alleged entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I am disclosing and giving particulars by submitting a letter dated 06/03/2014. In this letter, I am disclosing in the following for A.Y. 2011-12 & 2012-13:- 1. Mrs. Aarti Singal 82.38 Crores 2. Mr. Sanjay Singal 55.57 Crores 3. Sanjay Singal (HUF) 21.66 Crores Total 159.61 Crores Details of the balance amount will be submitted in few time after examining seized material." 6.1 The A.O. pointed out that in the disclosure letter dt. 06/03/2014 Shri Sanjay Singal categorically stated that the amount of surrender of Rs. 159.61 Crores was related to exempt LTCG shown by him and his family members from sale of shares of M/s Parnneta Industries Ltd. (PIL). 6.2 The A.O. issued the notice under section 153 A of the Act dt. 29/01/2015 for the A.Y. 2008-09 to 2013-14, in response the assessee furnished the submission on 23/02/2015 in which surrender income had not been reflected in the return of income of the assessee group. Thereafter the A.O. issued notice under section 143(2) of the Act. The A.O. mentioned that the search folder revealed that the assessee's name was not appearing on warrant of authorization, therefore, he had written a letter dt. 13/10/2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uge amount of incriminating soft data was found and seized impounded form the different places connected to the persons covered and the sworn statements of these persons were recorded. 1.2. The correlation of the seized/impounded data with the transactions of LTCG mentioned in the return of income of the assessee and the sworn statements of various entry operators prima facie reveals that the assessee has received huge amount of accommodation entries in the garb of exempt Long Term Capital Gains (LTCG) from the cartel of companies managed and controlled by Sh. Shrish Chander Shah (SCS), Sh. R.K. Kedia and their various allies located across the country. 2. From the perusal of ITRs of Sh. Sanjay Singal HUF it is noticed that the assessee has claimed exempt income from sale of shares of various listed companies from A.Y. 2011-12 to 2014-15. Those listed companies are 1) Prraneta Industries Ltd 2) Blue circle Service Ltd, 3) DB International Stock Broker Ltd, 3) Unisis Software & Holding Industries Ltd, 4) Global Infratech Ltd. formly known as Asian Lak Capital & Finance Ltd. 5) Rutron International Ltd. and 6) Grandama Trading Agencies Ltd. As per the information gathered from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d managed by different entry operators. The names of the listed paper companies alongwith name of the entry operator, controlling and managing the affairs of such companies are given in table below: Sr. No. Name of the Company Name of entry operator controlling and managing the affairs of the company 1 Pranneta Industries Ltd. Sh. Shirish Chandrakant Shah (SCS) 2 DB International Stock Brokr Ltd. Sh. S.N. Daga 3 Blue Circle Services Ltd. Sh. Jagdish Prashad Purohit 4 U nisys Software & Holding Ltd. Sh. Jagdish Prashad Purohit 5 Global Infratech Ltd. Sh. Jagdish Prashad Purohit 6 Rutron International Ltd. Sh. Anil Aggarwal 7 Grandama Trading Agencies Ltd. Sh. Sawan Jaju 2.2. Thus, from the above discussion it is inferred that, Sh. R.K. Kedia has played key role in arranging the exempt LTCG accommodation entries for the assessee from the above named companies. During the post search investigation, various information related to the above named listed paper companies was collected which shows that all these companies were paper companies, doing no actual business and were being used for giving exempt LTCG accommodation entries by various entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted by department, it is observed that majority of the shares of M/s PIL held by 'BPSL Family' were sold to (Counter parties) entities controlled and managed by SCS. Some of these entities are given below: Sr. No. Name of the company 1. AILISH TRADERS PVT. LTD. 2 AVANCE TECHNOLOGIES LTD 3. JESHNA MUILTLTRADE PVT. LTD. 4. KINITA REAL ESTATE PVT. LTD. 5. MIDWA Y TRADELINK PVT. LTD. 6 ADDO CONSTRUCTIONS PVT LTD 7 ADAMINA TRADERS PRIVATE LIMITED 8 ROHO REAL ESTATE PRIVATE LIMITED 9 MIDPOINT TRADELINK PVT. LTD. 10 ARISTO MEDIA AND ENTERTAINMENT PRIVATE LIMITED 11 GATEWAYINFRACON PRIVATE LIMITED 12 ADILA TRADERS PRIVATE LTD 13 MAHAN INDUSTRIES LTD 14 ETHAN CONSTRUCTIONS PRTVATE LIMITED 15 VAND R YARNS PRIVATE LIMITED 16 ABU AH REAL ESTATE PVT LTD 17 SHRIGANESH SPINNERS LTD 18 IND1VAR TRADERS PRIVATE LIMITED 19 ACACIO TRADELINK PVT LTD 20 RADFORD REAL ESTATE PRIVATE LIMITED 21 GAJPAL BUILDINFRA PRIVATE LIMITED 22 C AND K REALTORS PRIVATE LTD. 23 MAGAN MERCANTILE PVT LTD 4.3. These companies are included in the list of 212 companies which have been accepted by SCS in statements on oath to have been managed and controlled by him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er company/individual's bank account after layering the funds through the group companies. 6.1. A search and seizure action was also carried out on M/s PLL by the Directorate of Income Tax (Inv.), Ahmadabad on 09.04.2013 at the registered office and the residential premises of the Managing Director of M/s P1L Shri Omprakash Anandilal KhandelwaL This search action established that M/s. P1L was only a paper company without any activities and was being used by SCS for providing various types of accommodation entries including LTCG. The statement of MD, Shri Omprakash Anandialal Khnadelwal was recorded under section 132(4) of the Act on 30.05.2013 and 31.05.2013. He in his statement has specifically mentioned that M/s. PIL has been engaged in providing accommodation entries. He has also stated that the shares of PIL under his control were transferred to various companies and persons off-market or through stock exchange, as directed by SCS. He has also stated that the same was done so as to provide and facilitate exempt LTCG using the shares of M/s. PIL. On examination and analysis of the statements of Shri Omprakash Anandilal Khandelwal (OPK), SCS, referred to above, it is esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of preference shares, the persons intending to get LTCG are allowed to offload their holding at the artificially inflated prices and the private companies under control of SCS become counter parties to such trades on the stock exchange. In case of PIL the share price was jacked up from Rs. 2.25/- per share to Rs. 87.10 per share during a period April 2009 to March 2011. A graphical representation of the share price movement of M/s. PIL is as under: 7 There are plethora of other evidences in possession of department which indicate that M/s. Prraneta Industries Limited is a paper company without any activities and is being used so as to provide various types of accommodation entries including LTCG by SCS. 7.1. Various other evidences were also gathered from the possession Sh. Praveen Kumar Jain (Pintu Alias Chintan, a Mumbai based entry operator and a close allay of SCS and R.K. Kedia) during a search and seizure operation u/s 132 of the Income Tax Act, 1961 carried out by the Directorate of Income Tax (Inv.), Mumbai. From the analysis and cross verification of the data seized from R.K Kedia, SCS and Praveen Kumar Jain it was gathered that the entries mentioned in their accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of Shri Sanjay Singhal (Rs. 55.57 Crores), Sanjay Singhal IIUF (Rs. 21.66 Crores) and Smt. Aarti Singhal (Rs. 82.38 Crores) respectively but no further bifurcation for the remaining amount has been submitted by him thereafter. 8. Considering the facts & circumstances it is prima facie noticed that the income " claimed as exempt under head long term capital gain (LTCG) from the sale of shares of M/s Prraneeta Industries Ltd (PIL) is not genuine. Therefore, the long term capital gain of Rs. 21.65 Crores claimed to have been earned through sale of shares of M/s Prraneeta Industries Ltd. (PIL) has escaped assessment. More so, commission paid by the assessee @6.5% of total sales consideration of Rs. 22.37 Crores, which is Rs. 1.4 Crore has also escaped assessment, being the amount of commission paid in cash for getting the accommodation entries, as admitted by Sh. R. K. Kedia on the basis of evidences found during the course of search & seizure operation. (I) A.Y/Sr.No (2) Name of the Script 2011-12 (3) Total receipts against sale of shares (Rs. In crores) (4) LTCG shown as per Return of Income (Rs. In crores) (5) Commission @ 6.5% of Capital gain (Col. No. 4) (Paid in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s attention is invited to the provisions of Section 153A of the Act the relevant parts of which read as follows; - 153A. (1) Notwithstanding anything contained in Section 139, section 147, section 148, section 149, section 151 and section 153, the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) In view of the same since no incriminating document pertaining to the year under appegl i.e A/Y2012-13 has been found during the course of search, it is submitted that no cause lies for the issue of the said notices by resort to the provisions of section 153A of the Act and accordingly the said notices are void ab-initio rendering them infructuous. (7) In this connection reference may also be made to the judgement passed by Hon'ble Delhi High Court in the case of Commissioner of Income-Tax (Central) - III vs. Kabul Chawla [(2016) 380ITR 573 (Delhi)] wherein it has been clearly held that completed assessments can be interfered with by Ld Assessing Officer while making assessment under section 153A only on basis of some incriminating material unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment. While delivering the aforesaid judgement Their Lordships have analyzed the provisions of Section 153A as following:- i. Once a search takes place under Section 132 of the Act, notice under Section 153A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search operation u/s 132A of the Act the completed assessments cannot be interfered with and accordingly the assessment order is bad in law void and infructuous. In this connection, Your Honour's attention is also invited to the following decided case laws: - > Commissioner of Income -tax vs Anil Kumar Bhatia [(2013) 352 ITR 493 (Delhi)]; > Commissioner of Income -tax vs Chetan Das Lachman Das [(2012) 254 CTR 392 (Del)]; > Sanjay Aggarwal vs Deputy Commissioner of Income -tax, Central Circle -5, New Delhi [(2014) 150ITD 692 (Delhi-Trib)] > Smt Rashmi Wadhwa vs. DCIT, Central Circle-8, New Delhi [order dated 18.01.2016 in ITA No. 5184/Del/2014 passed by the Hon'ble ITAT Delhi Bench', New Delhi; > M/s Siriago Pharma (P) Ltd. vs. DCIT, Central Circle-3, Jaipur [order dated 13.01.2016 in ITA No. 1010/JPI/2013 passed by the Hon'ble ITAT Jaipur Bench, Jaipur; > Dy. Commissioner of Income Tax, Central Circle 23 vs. Sh. Himanshu B. Kanakia [order dated 18.01.2016 in ITA No. 3187/Mum/2014 passed by the Hon'ble ITAT "H"Bench ", Mumbai. (9) In particular, it may be noted that the jurisdictional Chandigarh Bench of the Hon'ble Income Tax Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a belief of escapement of income since the same had no live link or nexus with the reasons recorded and escapement of income. 10.1 It was submitted that the basis and fundamental requirement to invoke the provisions of Section 147 of the Act for the purpose of validity of the reopening assessment proceedings against the assessee is the existence of a "reason to believe" that the income chargeable to tax has escaped assessment. It was contended that the scope and ambit of the phrase "reason to believe" is well settled and trite law wherein various decisions including those of the Hon'ble Apex Court have time and again held that the reasons for the formation of belief must have a rationale connection with the information received and there must be some direct nexus or live link between the material coming to the notice of the A.O. for the formation of the belief that there has been escapement of income of the assessee from assessment in the particular year because of his failure to disclose fully and truly material facts. Reliance was placed on the following case laws: a) Calcutta Discount (1961) 41 ITR 191 (SC) b) ITO Vs. Lakmani Mewal Das, (1976) 103 ITR 437 (SC) c) Sheo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Corporation (2017) 55 ITR 69 (SN) (Mum) (Trib) - PCIT Vs. RMG Polyvinyl (I) Ltd. (2017) 83 taxmann.com 348 (Delhi HC) - PCIT Vs. Meenakshi Overseas (P) Ltd. (2017) 82 taxmann.com 300 (Delhi HC) - Gee Cee Cycle Balls Pvt. Ltd. Vs. ITO, ITA No. 867/DeL2013 dt. 30.10.2015 - CIT Vs. Goel Songs Golden Estate Pvt. Ltd. ITA No. 212 2012 dt 11.04.2012 - CIT Vs. Vrindavan Farms |P) Ltd. ITA No. 71, 72, 85 DeL2015 dt. 12.08.2015 - Dwarka Gems Ltd. ITA No. 71/ Jp/2017 (ITAT Jaipur) - Nirmala Agarwal Vs. ACIT (ITA No. 995 & 996 Jp/2016) (ITAT Jaipur) 10.4 It was further stated that the ITAT Delhi Bench in the case of Shri Brij Bhushan Singal & Ors Vs. ACIT(ITA Nos. 1415-1417, 1479-1481, 1483-1484/Del/2018) has held that the documents seized from the premises of third parties cannot be used for making addition in the hands of the assessee without the assessee being granted an opportunity of cross examination of those parties and that the presumption under section 132(4A)/ 292C is available only in the case of the person in whose possession and control the documents were found and not in the case of third parties. Accordingly it was submitted that the material which was unre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there had been any escapement of income warranting the notice under section 148 of the Act for the years under consideration. 10.6 It was further submitted that the Ld. CIT(A) had made the categorical findings that nothing incriminating material belonging to the assessee was found from the premises of third parties therefore the said third party material / evidence as relied upon by the Department for reopening the assessment, could not have been the basis for formation of belief that the assessee's income had escaped assessment and the same could not have been utilized by the AO for the purpose of reopening the assessment under section 148 of the Act after the proceedings under section 153A of the Act were dropped. It was vehemently argued that the reasons recorded by the AO for the purpose of reopening the assessment under section 148 of the Act was based solely on borrowed satisfaction without application of mind by the A.O. and moreover the reasons recorded by the AO were nothing but the exact replica of the assessment order passed under section 153A of the Act in the case of Shri Sanjay Singhal, Aarti Singhal, and Aniket Singhal, therefore, the reopening of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were to have been made, the same would not fulfil criteria laid down under section 142(2) of the Act since the AO had not conducted any such independent enquiry of his own but had merely relied on borrowed satisfaction, on the basis of third party material / statements which could in no manner be termed to be incriminating in nature, even for the purpose of Section 153A or 153(C) of the Act to render the same sufficient for the purpose of Section 148 of the Act. Therefore when none of the said material and / or statements were independently examined by the AO so as to put such material to the assessee under section 142(3) or for that to even to sustain the addition under section 143(3) of the Act then how the same could have been utilized for reopening the assessment under section 148 of the Act in the assessee's case. It was submitted that what could not have been done directly was not permissible to be done obliquely, meaning thereby, whatever is prohibited by law to be done could not have been legally effected by an indirect and circuitous contrivance. Reliance was placed on the following case laws: * CIT Vs. Kalvinator of India Ltd. (2002) 256 ITR 1 (Del)(FB) * Windson El ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Accordingly notice under section 148 of the Act was issued and the assessee did not raised any objection. It was further submitted that during the second search on 13/06/2014 incriminating documents were found from the premises of Shri R.K. Kedia which were not doubted and established that assessee's income escaped the assessment and thus documents / material found during the course of search could have been used for reopening the assessment under section 148 of the Act. It was further submitted that Shri Sanjay Singal in his statement recorded under section 132(4) of the Act offered the income for taxation which was later on retracted without any reason, therefore the AO rightly held that the income of the assessee escaped the assessment and was justified in issuing the notices under section 148 of the Act as the income of the assessee escaped the assessment. It was accordingly submitted that the reassessment framed by issuing the notices under section 147 r.w.s 148 of the Act was fully justified. 12. As regards to the dropping of proceedings under section 153A of the Act in the assessee's case, it was submitted that the provision of Section 153A of the Act could not be inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for the search was certain pre existing third party material / statement. However, no incriminating material for the purpose of Section 153A was found. The A.O. issued the noticed dt. 29/01/2015 under section 153A of the Act to the assessee and also issued notice under section 142(1) of the Act dt. 12/08/2015 seeking details of LTCG claim in ITR, ledger of purchaser / seller in the books of the Assessee(s) & cash flow statement, the A.O. also issued show cause notice dt. 20/10/2015 and 09/11/2015. Thereafter the A.O. sought approval from the Ld. Additional CIT vide letter dt. 08/01/2016 for dropping the proceedings under section 153A of the Act in the case of the assessee and the approval was granted on 13/01/2016. Accordingly the proceedings under section 153A of the Act in the case of assessee were dropped but the A.O. proceeded to issue notice under section 147 r.w.s 148 of the Act for reopening the assessment by issuing the notice dt. 26/03/2016 and recording the reasons which are reproduced in para 3 at page no. 3 to 12 of the assessment order dt. 29/12/2016. 15. On perusal of the aforesaid reasons recorded in the assessment order it would be clear that the notice under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order valid." It has further been held as under: " that once the date on which the so-called accommodation entries were provided was known, it would not have been difficult for the Assessing Officer, if he had in fact undertaken the exercise. To make a reference to the manner in which those very entries were provided in the accounts of the assessee, which must have been tendered along with the return, which was filed on November 14,2004 and was processed under section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for him to have simply concluded that it was evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries. The basic jurisdictional requirement was application of mind by the Assessing Officer to the material produced before issuing the notice for reassessment. Without analysing and, forming a prima facie opinion on the basis of material produced, it was not possible for the Assessing Officer to conclude that he had reason to believe that income had escaped assessment." 15.2 On a similar issue the Hon'ble Jurisdictional High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h banking channel. The identity of the companies was not disputed. Under these circumstances, the initiation of proceedings under section 147 and issuance of notice under section 148 of the Act were to be quashed. 16 In the present case also the A.O. acted on the basis of information received from the investigation wings of the Department and had not independently verified from the record available to him in the form of return of income filed by the assessee. So there was only suspicion that some income having escaped assessment which cannot by itself be sufficient to sustain the action under section 147 r.w.s 148 of the Act. 16.1 In the instant case the A.O. mentioned that the statement of Shri Sanjay Singal was recorded during the course of search under section 132(4) of the Act, a disclosure was made amounting to Rs. 250 Crores and subsequently in the course of his another statement recorded under section 132(4) of the Act, bifurcation thereof to the extent of Rs. 159.61 crores was made by Shri Sanjay Singal. Later on the said statement was withdrawn while filing the returns in response to the notices issued under section 153A of the Act that the proceedings in assessee's case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken indirectly under section 147 r.w.s 148 of the Act. On a similar issue, their Lordship of the Hon'ble Delhi High Court in the case of CIT Vs. Kalvinator of India Ltd. (supra) observed at page no. 15 that " it is well settled principle of law that what cannot be done directly cannot be done indirectly". 17.1 Similarly, the Hon'ble Gujarat High court in the case of Cargo Cleaning Agency (Gujarat) Vs. JCIT (supra)held as under: 'The entire scheme for bringing to tax income which has escaped assessment under sections 147 to 153 of the Act specifically relates to a specific assessment year and different time limits are provided at different stages which are all interlinked and commence from the end of the relevant assessment year. The definition of "assessment year" as provided in section 2(9) of the Act means the period of 12 months commencing on the first day of April every year. This definition cannot be made applicable to the term "block period" which has been defined by section 158B(a) of the Act. On a plain reading the concept of block period could not take within its fold the meaning of an assess-year. Similarly, the term "assessment year" by its very de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs in the case of the assessee. It is an admitted fact that in the present case the agreement in question was found during the course of search in the case of Shri Naresh Sabharwal and proceedings under section 153A have been initiated against him. Therefore, the agreement in question have been transferred by A.O. of the person searched to the A.O. of the assessee for the purpose of taking remedial action in the matter. It is well settled Law that in the case of assessment made on assessee consequent to the search in another case, A.O. is bound to issue notice under section 153C and thereafter proceed to assess the income under section 153C and if A.O. had proceeded with re-assessment under section 147/148 of the I.T. Act and passed the Order under section 143(3)/148 of the I.T. Act, the same would be illegal and arbitrary and without jurisdiction. We rely upon the Order of ITAT, Visakhapatnam Bench in the case of G. Koteswara Rao (supra). In the case of ITO vs., Arun Kumar Kapoor [2011] 140 TTJ 249 (ASR-ITAT) [Paper Book at Page71], the ITAT, Amritsar Bench held as under : "On a perusal of section 153C, it would be clear that the provisions of this section are applicable which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d there is no justification to initiate the re-assessment proceedings against the assessee, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stands deleted. 18. In the present case also if any material was found relating to the assessee during the course of search on third parties then the correct course of action would have been to proceed against the assessee under section 153C of the Act and there was no justification for the A.O. to initiate the proceedings under section 147 r.w.s 148 of the Act. So respectfully following the aforesaid referred to orders of the Coordinate Benches of ITAT, we are of the view that there was no justification on the part of the A.O. to initiate the reassessment proceedings under section 147 r.w.s 148 of the Act against the assessee. Accordingly the said order of the A.O. is set aside and quashed. 19. Since we have quashed the assessment order dated 29/12/2016 under section 147 r.w.s 148 of the Act on the legal ground raised by the assessee therefore no findings are given on other ground raised on merits by the assessee. 20. The facts in other A.Y's i.e; the A.Y. 2012-13 and 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Their Lordships had, inter alia, directed that "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 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, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither anticipated nor controlled' 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 disa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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