NIPPON ALLOYS LIMITED ,KOLKATA vs. D.C.I.T.,CIRCLE-3(1), KOLKATA

Earlier, Shri Manish Tiwari, FCA, had appeared on behalf of the assessee on various dates. On 27.07.2022, Shri Manish Tiwari, FCA, counsel for the assessee, submitted that the assessee company has gone into official liquidation and official liquidator has been appointed. Therefore, vide order dated 27.07.2022, it was directed to issue fresh notice to Shri Subodh Kr. Agarwal, official liquidator and the case was Assessment year: 2015-16 Nippon Alloys Ltd adjourned on 26.09.2022. However, on the next date i.e. 26.09.2022, no one appeared on behalf of the assessee/official liquidator and it was again directed to issue notice to Shri Subodh Kr. Agarwal, official liquidator. Notice was sent through registered post as well as through email. However, on the next date of hearing i.e. on 01.11.2022, again the official liquidator failed to appear. It was again directed to issue notice to him and further it was also directed to inform the official liquidator by telephone also. However, on the next date of hearing i.e. on 26.12.2022, again no one appeared on behalf of the assessee/ official liquidator and the case was adjourned to 28.12.2022. Since, the Bench did not function on 28.12.2022, the case was adjourned to 09.02.2023 by the registry. Again on 09.02.2023, no one appeared on behalf of the assessee/ official liquidator and it was directed to issue notice to the official liquidator through RPAD and email for 17.04.2023. The Bench did not function on 17.04.2023 and the hearing was adjourned on 25.05.2023 and notice of hearing was again issued to the official liquidator. Again no one appeared on behalf of the assessee/ official liquidator. The notice was again issued through RPAD and email for today i.e. 09.08.2023 to the official liquidator, Shri Subodh Kr. Agarwal. Today, again no one appeared on behalf of the official liquidator. The Bench Clerk was directed to contact official liquidator telephonically, whereupon, the said official liquidator, instead of appearing, has informed the Bench Clerk that he has already received the notice of hearing sent by the Tribunal. However, he has sent on email a copy of the order dated 16.02.2023 passed by the Coordinate Delhi Bench of the Tribunal in in the case of ACIT vs. ABW Infrastructure Ltd. Assessment year: 2015-16 Nippon Alloys Ltd

From the above facts, it is clear that the official liquidator does not want to appear. Further, we note that in the case of ACIT vs. ABW Infrastructure Ltd (supra), the cross appeals of the revenue and of the assessee were dismissed by the Coordinate Bench of the Tribunal in view of moratorium order passed by the NCLT u/s 14 of the IBC Code. The Coordinate Bench of the Tribunal in para 7 of the said order has observed that in view of the moratorium order, no proceedings can be initiated against the corporate debtor i.e. assessee company including the income tax proceedings and further that the IBC has overriding effect on all other acts including Income Tax Act as provided u/s 178(6) of the Income Tax Act. The Coordinate Bench thereafter held that in view of the moratorium declared by NCLT, the income tax proceedings cannot be continued and therefore in that case, both the appeals i.e. of the revenue as well as of the assessee were dismissed. In view of the aforesaid facts and circumstances, the official liquidator is no more interested in pursuing the present appeal and he wants dismissal of the appeal of the assessee in the light of the order of the Coordinate Delhi Bench of the Tribunal dated 16.02.2023 (supra).

Since, the official liquidator is no more interested in prosecuting the appeal on behalf of the assessee and to watch the interest of the assessee company being the official liquidator, therefore, we are left with no option than to dismiss the appeal of the assessee company. However, before dismissing the appeal, we deem it fit to make certain observations relating to this appeal. 5. A copy of the order of the National Company Law Tribunal, Kolkata Bench has been placed on file in IA No.1169/KB/2020 in CP(IB) No.1889/KB/2019 u/s 33 of Insolvency & Bankruptcy Code, 2016 in the Assessment year: 2015-16 Nippon Alloys Ltd case of Ply Com Private Limited vs. Nippon Alloy Limited order dated 08.12.2020. A perusal of the said order would reveal that a petition seeking liquidation of the assessee company has been filed before the National Company law Tribunal, Kolkata Bench, wherein, the applicant/resolution professional, Mr. Subodh Kr. Agrawal, has been appointed as official liquidator, wherein, in para 13 of the said order, the ld. National Company law Tribunal has ordered as follows:

13.e. All the powers of the Board of Directors, and of key managerial persons, shall cease to exist in accordance with section 34(2) of the Code. Al these powers shall henceforth vest in the Liquidator. f. The personnel of the Corporate Debtor are directed to extend all assistance and co-operation to the Liquidator as required by him in managing the liquidation process of the Corporate Debtor. g. On initiation of the liquidation process but subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor save and except the liberty to the liquidator to institute suit or other legal proceeding on behalf of the Corporate Debtor with prior approval of this Adjudicating Authority, as provided in section 33(5) of the Code read with its proviso.

It is pertinent to mention here that the present appeal has been preferred on behalf of the assessee/corporate debtor. The appeal was already pending before the initiation of insolvency proceedings against the assessee. It is further pertinent to mention here that the Income Tax Authorities i.e. Assessing Officer as well as CIT has already determined Assessment year: 2015-16 Nippon Alloys Ltd the tax liability against the assessee/corporate debtor. It is not a fresh institution of any suit or other legal proceedings against the corporate debtor, rather, it is the appeal of the assessee which is pending before this Tribunal and the official liquidator, in our view, is supposed to watch the interest of the assessee to get reduced its tax liability. Further, the provisions of section 178 of the Income Tax Act are relevant in this respect, which, for the sake of convenience, are reproduced as under:

The Hon’ble Supreme Court in the case of Harshad Shantilal Mehta v. Custodian (1998) 99 Taxman 2016(SC) while relying upon the decision of Hon’ble Supreme Court in the case S.V. Kondaskar v. V.M. Deshpande [1972] 1 SCC 438 has observed as under: