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TMI Blog2020 (10) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... ny exempt income. which wrong and contrary to the facts of the case, the provisions of the Act and Rules made there under." 2. The brief facts of the case are that the assessee filed its return of income on 30-11-2015 declaring total income of Rs. 62,80,82,820/-. The case was selected for scrutiny. Notices u/s 143(2) and 143(1) were issued and served upon the assessee. The assessee company was engaged in the business of transportation of cargo through barges from mother vessel to jetty in case of import and vice versa in case of export. The assessee company was also during the business of transportation of cargo from one part to another performs incidental activities like stevedoring, loading, unloading at jetty, internal haulage etc. The assessee claimed the exempt income in a sum of Rs. 78,98,916/- The assessee suo moto disallowed u/s 14A read with Rule 8D at Rs. 5,43,248/-. Notice was given to the assessee and after reply of the assessee, the expenditure to earn the exempt income was assessed in a sum of Rs. 1,31,5318/-. Feeling aggrieved, the assessee filed an appeal before the CIT(Appeals) and the CIT(Appeals) remanded the issue to AO to consider the investment which has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt. There is no dispute that if an investment has yielded exempt income in a particular year then it will enter the computation of average value of investments for the purposes of Rule 8D(2)(iii). The assessee's contention that if there is no certainty that an income, which is exempt in current year, will continue to be so in future years and, therefore, that investment should also be excluded, is hypothetical and cannot be accepted. 11.18. In view of above discussion, the matter is restored back to the file of AO for recomputing the disallowance u/s 14A in terms of above observations. Thus, revenue's appeal is dismissed and assessee's cross-objection, on the issue in question, stand allowed for statistical purposes, in terms indicated above. 12. Now we will consider the other two grounds. As far as ground no. 3 is concerned, we do not find any reason to interfere with the order of ld. CIT(A) because ld. CIT(A) has only referred the matter to AO for verifying the revised computation u/s 94(7) with reference to record date and not with respect to date of receipt of dividend. We do not find any infirmity in the order of CIT(A) on this issue. 13. As regards addition of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not ordinarily be a day beyond a further period of 30 days. Thus, a period of 60 days has been provided under the extant rule for pronouncement of the order. This period could be extended by the bench on the ground of exceptional and extraordinary circumstances. However, the extended period shall not ordinarily exceed a period of 30 days. 6.2 Although the order was well drafted as well as approved before the expiry of 90 days, however, unfortunately, on 24/03/2020, a nationwide lockdown was imposed by the Government of India in view of adverse circumstances created by pandemic covid-19 in the country. The lockdown was extended from time to time which crippled the functioning of most of the government departments including Income Tax Appellate Tribunal (ITAT). The situation led to unprecedented disruption of judicial work all over the country and the order could not be pronounced despite lapse of considerable period of time. The situation created by pandemic covid-19 could be termed as unprecedented and beyond the control of any human being. The situation, thus created by this pandemic, could never be termed as ordinary circumstances and would warrant exclusion of lockdown p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational 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 excludingat 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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