Recently before the Mumbai tribunal, in the cross appeal case of DCIT Vs JSW Limited (Respondent) (successor company on amalgamation Of JSW Ispat Limited) -ITA No. 6264/Mum/18 Assessment year: 2013-14, and JSW Limited (Appellant) (successor company on amalgamation Of JSW Ispat Limited) Vs Deputy Commissioner of Income Tax Central Circle 3(2), Mumbai – ITA No. 6103/Mum/18, it was held that where assessee had not earned any tax exempt income in relevant previous year, no disallowance under section 14A could have been made.

Interestingly, the Date of concluding the hearing on the above matter was January 7, 2020 whereas, Date of pronouncement was May 14, 2020 (after 129 days from the date of hearing i.e; much after the expiry of 90 days from the date of conclusion of hearing), what is interesting in this? These 129 days! are interesting in this which poses several questions as to the validity of the order passed/pronounced in conformity to the Income-Tax (Appellate Tribunal) Rules, 1963 (“hereafter referred to as the rules”). 

Thus, a bloating procedural issue surrounding the above is whether the passing of the order above, beyond ninety days (permitted under the rules), was necessitated by any “extraordinary” circumstances and even if so, whether the order is good in law and within the statutory framework and rules framed under the Income-Tax (Appellate Tribunal) Rules, 1963 (“hereafter referred to as the rules”).

It is to be noted that as per rule 35(4) of the rules,


The pronouncement may be in any of the following manners: —

(a)  The Bench may pronounce the order immediately upon the conclusion of the hearing.

(b)  In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement.

(c)  In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board.” 


“Rule 34(5) clearly stipulates the time limit for a maximum period of 90 days for the pronouncement of order. This is however supported by the plethora of judgments such as the jurisdictional High Court in the case of Shivsagar Veg. Restaurant v. ACIT [(2009) 317 ITR 433 (Bom)] which held that unexplained delay in pronouncement of the order renders it vulnerable and such judgments were bad in law and were to be set aside. This is to be noted that the above rule 35(4) was inserted as a result of directions of Hon’ble jurisdictional High Court in the case of Shivsagar Veg Restaurant wherein, inter alia, the court directed that “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. It was also expounded that justice should not only be done but should appear to have been done and that justice delayed is justice denied. In the case of Anil Rai, it was held that an unreasonable delay between hearing of arguments and delivery of judgment, unless explained by exceptional or extraordinary circumstances, is highly undesirable even when written arguments are submitted. It was considered appropriate to provide some guidelines regarding the pronouncement of judgments which shall be followed, being the mandate of the court therein.

Also, In the ITAT rules so framed, because of the directions given after the Shivsagar Veg. Restaurant (Supra) per se, the expression “ordinarily” has been inserted in the requirement to pronounce the order within a period of 90 days.

Furthermore, Rule 34(5) provides rules for the delivery of judgments, which provide for a maximum period of 3 months for the pronouncement of judgment after completion of hearing. Also, the jurisdictional High Court in the case of Otters Club v. DIT (E), in Writ Petition No. 2889 of 2016, dated 12-1-2017 has held that the Tribunal cannot pass the order beyond three months of the conclusion of the hearing of the appeal. 

Hence, in accordance with the ratio of the above High Court and Supreme Court judgments, such decisions rendered after 3 months need to be recalled and heard afresh as they are liable for mistake apparent from record.” 

Supporting inferences for order passed in more than 90 days due to coronavirus: 

On 24th March, 2020 (90 days to the above order would have got completed on 6th April 2020), As we all know that 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 pandemic. 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. Even the Hon’ble Supreme Court of India extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown.

Hon’ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that that while calculating time for disposal of matters made time-bound by it, the period for which the lockdown continues to operate shall be added and time shall stand extended accordingly”.

Government of 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 period during which lockdown was in force can be very well be an “extra-ordinary” period.

In the light of the above discussions, It was held 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.

Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon’ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon’ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed “while calculating the time for disposal of matters made timebound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly”.


The exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders clearly comes into play in the present case of Coronavirus or COVID 19 and hence, the order is valid and tenable in law considering the limitations and natural restrictions imposed by the current pandemic scenario.

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Qualification: CA in Job / Business
Company: Ashok Maheshwary and Associates LLP
Location: Faridabad, Haryana, IN
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October 2021