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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI SAKTIJIT DEY & SHRI ANADEE NATH MISSHRA
PER SAKTIJIT DEY, JM:
Captioned cross appeals arise out of order dated 18th July,
2016 of learned Commissioner of Income Tax (Appeals)-26, New
Delhi, for the assessment year 2012-13.
At the time of hearing of appeal, learned counsel appearing
for the assessee submitted that the Hon’ble National Company
Law Tribunal (NCLT), New Delhi, Principal Bench has delivered
judgment on 19.09.2019 under section 7 of the Insolvency and
Bankruptcy Code, 2016 (IBC) granting moratorium in terms with
section 14 of the said Code. He submitted, in view of such
decision of NCLT, the present proceeding cannot continue.
Learned Departmental Representative, after going through
the judgment of NCLT, agreed with the submission of the
assessee.
We have considered rival submissions 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 19.09.2019 in C.P. No. 2 | P a g e
ITA Nos.5170 & 5329/Del/2016
IB-710(PB)/2019 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 is relevant:
“20. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14 (1) (a), (b), (e) & (d) and thus the following prohibitions are imposed which must be followed by all and sundry: “(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 Securitisation 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.”
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 proceedings. Therefore, these
cross appeals need to be consigned to the records. 3 | P a g e
ITA Nos.5170 & 5329/Del/2016
In view of the aforesaid, we dismiss these appeals. However,
opportunity is granted both to the assessee as well as the
Revenue to seek revival of the respective appeals, 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.
In the result, both the appeals are dismissed for statistical
purposes.
Order pronounced in the open court on 26th May, 2022
Sd/- Sd/- (ANADEE NATH MISSHRA) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 26th May, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
4 | P a g e