The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) has last week, issued a ruling regarding the difficulties in pronouncing order after concluding the hearing, clarified that the period of lockdown shall be excluded while computing the limitation provided under Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963.
“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 interpret.”
The Tribunal was considering an order of the first appellate authority confirming penalty on estimate basis penalty under section 271(1)(c). While allowing the appeal filed by the assessee on the basis of settled provisions of the law, the Tribunal pointed out an issue whether when the hearing of the matter was concluded on 28.02.2020 the order can be pronounced today i.e. on 28.05.2020.
Relying on the decision of the Mumbai Tribunal in DCIT vs. JSW Ltd, the Tribunal said that “Quite clearly, “ordinarily” the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression “ordinarily” has been used in the said rule itself.”
Noting that there was the unprecedented disruption of judicial wok all over the country due to the lockdown, the Tribunal observed that “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.”
“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 interpret. 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.”
