HBN HOMES COLONISERS PVT. LTD.,NEW DELHI vs. DCIT, CC- 29, NEW DELHI

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ITA 4017/DEL/2017Status: DisposedITAT Delhi02 June 2022AY 2007-084 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that due to the moratorium declared by the NCLT, no proceedings in any court or tribunal can continue. Therefore, continuing the present appeal would serve no useful purpose.

What were the facts?

The assessee's appeal against a penalty order was called for hearing, but no one appeared on behalf of the assessee. The National Company Law Tribunal (NCLT) had declared a moratorium under the Insolvency and Bankruptcy Code, 2016.

What were the issues?

Whether proceedings can continue against a corporate debtor against whom a moratorium has been declared by the NCLT.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA

For Respondent: Smt. Sunita Singh, CIT (DR)
Hearing: 02.06.2022Pronounced: 02.06.2022

Captioned appeal arises out of order dated 22.03.2017 of learned Commissioner of Income Tax (Appeals)-30, New Delhi, confirming the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2007-08.

2.

When the appeal was called for hearing, none appeared on behalf of the assessee to represent the case.

3.

We have heard learned Departmental Representative and perused the materials on record. It is evident from record that the National Company Law Tribunal (NCLT), New Delhi, Principal Bench has delivered judgment on 24.07.2019 under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, granting moratorium in terms with section 14 of the said Code. In fact, copy of the aforesaid judgment was placed on record by learned CIT (DR).

4.

Having considered the submission of learned CIT (DR) and perused the materials on record, it is observed, certain financial creditors have filed application under section 7 of the IBC seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the assessee. Allowing the application of the financial creditors, Hon’ble NCLT has delivered judgment on 24.07.2019 in C.P. No. IB-82/PB/2018 and has initiated CIRP by appointing an interim Insolvency Resolution Professional. In the interregnum, the Hon’ble NCLT has declared moratorium in terms with section 14 of the IBC. In this regard, the following observations of the Hon’ble NCLT are relevant:

“24. As a consequence of the application being admitted in terms of section 9(5) of IBC, 2016, we also declared moratorium in terms of section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14(l)(a)(b)(c)&(d). Thus, the following prohibitions are imposed: “(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover, or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.”

5.

Thus, in view of moratorium declared by NCLT, all proceedings in any court of law, Tribunal etc. cannot continue.

That being the position in law, no useful purpose is going to be served in continuing the present proceeding. Therefore, this appeal needs to be consigned to the records.

6.

In view of the aforesaid, we dismiss the appeal. However, liberty is granted to the assessee to seek revival of the appeal, in case, order of NCLT is either reversed or modified by any higher judicial forum, or if it is necessary to do so in the interest of the parties.

7.

In the result, the appeal is dismissed for statistical purposes.

Order pronounced in the open court on 2nd June, 2022

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