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TaxTMI 
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2020 (8) TMI 403
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....terest of revenue. 3. The facts in brief are that the assessee is a limited company and engaged in the business of manufacturing and marketing of calcined bauxite, Bricks and castables as well as generation of power. The assessee in the year under consideration has received incentive of Rs. 73,24,821/- being refund of VAT under the scheme of Government of Gujarat. The assessee treated such receipt as capital receipt not chargeable to tax. However, the principle CIT was of the view that such incentive was disbursed towards meeting the running expenses and the operating the business. Therefore the same has to be treated as revenue in nature. Accordingly the principal CIT held the assessment order as erroneous insofar prejudicial to the inter....
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....November 2017. Accordingly, the learned AR claimed that there is no error in the order of the AO as alleged by the learned principle CIT. 6. On the other hand the learned DR vehemently supported the order of the authorities below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case the learned principle CIT has held that the order passed by the AO is erroneous insofar prejudicial to the interest of revenue for the reason that the incentive being refund of VAT received by the assessee in a scheme of Government of Gujarat was held to be capital in nature whereas it was given to meet the running cost to the assessee. Therefore the same has to be treated as revenue in n....
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....e 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopts one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by the Supreme Court that where a sum not earned by a person is assessed as income in ....
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....8 vide order dated 14-5-2020 extended the time for pronouncing the order within 90 days of time by observing as under: 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 a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumba....
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....India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus "should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure...". The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be 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 ....
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....teps taken suo motu by Hon'ble jurisdictional High Court and Hon'ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words "ordinarily", in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there canno....