DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(5), BANGALORE vs. M/S. KARUTURI GLOBAL LIMITED, BANGALORE

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ITTPA 244/BANG/2014Status: DisposedITAT Bangalore24 June 2025AY 2009-105 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeals filed by the assessee were not maintainable. This was because the company was under liquidation, and the appeals were signed by directors who lacked the locus standi to file or pursue them. Furthermore, Form 36 had not been duly substituted and verified by the appointed Liquidator, despite the liquidation process ongoing for approximately five years. Consequently, the assessee's appeals were dismissed. Regarding the Revenue's appeals, the Tribunal found them to be infructuous. Given that the company was in liquidation and its assets were being sold, even if the Revenue succeeded, there was no realistic chance of recovering any tax. Therefore, the Revenue's appeals were also dismissed. The Tribunal granted liberty to the Liquidator to file fresh Form 36 with a petition for condonation of delay if they wished to continue the proceedings, allowing a coordinate bench to decide on recall of the order. Similarly, the Revenue was given an opportunity to pursue their appeals if they could demonstrate that the claim was made before the NCLT during liquidation.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard cross-appeals filed by Karuturi Global Ltd. (assessee) and the Deputy Commissioner of Income Tax (DCIT/ACIT) for various assessment years from 2008-09 to 2014-15. The appeals were filed against orders passed by the Assessing Officer and CIT(Appeals). During the hearing, it was brought to the Tribunal's notice that the National Company Law Tribunal (NCLT) had initiated Corporate Insolvency Resolution Process against the assessee company on August 2, 2019, leading to its liquidation. Mr. P R Raman was appointed as the Liquidator. The appeals filed by the assessee were signed by directors, not the Liquidator, despite the company being in liquidation for nearly five years. The Revenue's appeals were also considered in light of the company's liquidation.

What were the issues?

1. Whether the appeals filed by the assessee are maintainable, given that the company is under liquidation and the appeals were not signed by the appointed Liquidator but by directors, and whether Form 36 was duly substituted by the Liquidator? (Question of law and fact, concerning procedural compliance and locus standi). 2. Whether the appeals filed by the Revenue have become infructuous, considering the company is in liquidation and its assets are being sold, making recovery of any tax unlikely even if the Revenue succeeds? (Question of law and fact, concerning the practical enforceability of a favorable outcome). Assessee's contentions: The appeals filed by the assessee were dismissed by the Tribunal on the grounds of not being properly verified and not having Form 36 substituted by the Liquidator. The Tribunal noted that directors lacked locus standi to pursue appeals post-liquidation. Revenue's contentions: The Revenue's appeals were dismissed by the Tribunal as infructuous due to the company's liquidation and the impracticality of recovery. The Tribunal also noted that if the Revenue wished to pursue these appeals, they would need to demonstrate that the claim was made before the NCLT during liquidation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C,Section 92CA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K

For Appellant: Smt. Vanaja, Advocate
For Respondent: Smt. Suganthamala T M, CIT(DR)(ITAT), Bengaluru
Hearing: 19.06.2025Pronounced: 24.06.2025

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE

BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K , JUDICIAL MEMBER

Appeal No. Assessment Year ITA No. 1216/Bang/2017 2008-09 IT(TP)A No.929/Bang/2014 2008-09 IT(TP)A No.123/Bang/2014 2009-10 IT(TP)A No.472/Bang/2015 2010-11 IT(TP)A No.104/Bang/2016 2011-12 IT(TP)A No.2827/Bang/2018 2014-15

KARUTURI GLOBAL LTD., Vs. The Deputy / Assistant Commissioner Mr. P R Raman of Income Tax, Company Liquidator Circle 11(5)/ Circle 4(1)(1), C/o A C Suresh Bangalore. No 3 DC- 118, Ground Floor, 3rd D Cross Road, 2nd Main Road, Kasturi Nagar Bangalore 560043 Company Address :- No.204, Embassy Centre, 11, Crescent Road, Bangalore – 560 001. PAN: AAACK 8275A APPELLANT RESPONDENT

Appeal No. Assessment Year IT(TP)A No.1057/Bang/2014 2008-09 IT(TP)A No.244/Bang/2014 2009-10 IT(TP)A No.515/Bang/2015 2010-11

The Deputy Commissioner Vs. KARUTURI GLOBAL LTD., of Income Tax, Bangalore – 560 001. PAN: AAACK 8275A Circle 11(5)/ Circle 4(1)(1), Bangalore. APPELLANT RESPONDENT

IT(TP)A No.929/Bang/2014 & Ors. Page 2 of 5

Assessee by : Smt. Vanaja, Advocate Revenue by : Smt. Suganthamala T M, CIT(DR)(ITAT), Bengaluru.

Date of hearing : 19.06.2025 Date of Pronouncement : 24.06.2025 O R D E R Per Bench 1. These are cross appeals filed by KARUTURI GLOBAL LTD. (the assessee) and DCIT/ACIT, Circle 1(5) / 4(1)(1), Bangalore [ld. AO] for several assessment years as under:-

(a) IT(TP)A No.929/Bang/2014 is filed by Karuturi Global Ltd. (assessee/appellant) for AY 2008-09 against the appellate order passed by CIT(Appeals)-I, Bangalore dated 8.3.2014 signed by MD of the company, K.S. Ramakrishna.

(b) ITA No.1216/Bang/2017 is also filed by the assessee for the AY 2008-09 against the appellate order passed by the CIT(Appeals)-4, Bangalore on 21.02.2017 signed by Sai Ramakrishna Karuturi.

(c) IT(TP)A No.123/Bang/2014 is filed by assessee for AY 2009-10 against the assessment order passed u/s. 143(3) r.w.s. 144C(5) of the Act dated 31.1.2014 passed by the DCIT, Circle 1(5), Bangalore and Form 36 is present by Anita Karuturi, Director.

(d) IT(TP)A No.472/Bang/2015 is filed by assessee against the assessment order passed u/s. 143(3) r.w.s. 144C of the Act dated 29.1.2015 by the

IT(TP)A No.929/Bang/2014 & Ors. Page 3 of 5

DCIT, Circle 4(1)(1), Bangalore and Form 36 is signed by K.S. Ramakrishna, Director, MD of the assessee company.

(e) IT(TP)A No.104/Bang/2016 is filed by the assessee against the assessment order u/s. 143(3) r.w.s. 144C of the Act dated 31.12.2015 by the DCIT, Circle 4(1)(1), Bangalore and presented by K.S. Ramakrishna, Director, MD of the assessee company.

(f) IT(TP)A No.2827/Bang/2018 is filed for AY 2014-15 presented by Sai Ramakrishna Karuturi, MD against the assessment order u/s. 143(3) r.w.s. 144C r.w.s. 92CA of the Act dated 10.8.2018 by the DCIT, Circle 4(1)(1), Bangalore.

2.

During the course of hearing, it has come to the notice that NCLT initiated Corporate Insolvency Resolution Process against this company on 2.8.2019 which led to its liquidation. One Mr. P R Raman is appointed as the Liquidator. Assets of this company are being sold through auction. Liquidator is representing the company for liquidation matters as well as before NCLT. However, the present appeals directed before us are signed by some directors of the company. On appointment of liquidator, those directors do not have any locus standi to file and pursue these appeals. The Liquidator has though issued Letter of Authority in favour of the counsel, however, has not replaced Form 36 duly signed by him. This is not done despite liquidation process going on for almost 5 years. In view of this, these appeals filed by the assessee before us are dismissed as not properly verified and also not substituting the form no 36 duly signed and verified by the

IT(TP)A No.929/Bang/2014 & Ors. Page 4 of 5

liquidator. Thus, the appeals filed by assessee are not maintainable and hence dismissed.

3.

The Liquidator is granted liberty that if he wants to continue the above proceedings involved in these appeals, fresh Form 36 is required to be filed along with petition for condonation of delay that why it has not been done for such a long time. The coordinate Bench may take a decision at that time in accordance with law regarding recall of this order.

4.

Thus, all these appeals filed by the assessee are dismissed.

5.

The ld. AO has also filed appeals in these cases in IT(TP)A No.1057/Bang/2014 for AY 2008-09, IT(TP)A No.244/Bang/2014 for AY 2009-10 & IT(TP)A No.515/Bang/2015 for AY 2010-11. The company is already into liquidation, the assets of the company are being sold as per various notices and e-auction sale notices published by the Liquidator. Even if the Revenue succeeds in these appeals, there is no chance of any recovery of any tax out of the assets of the assessee company. Therefore, these appeals have become infructuous. Accordingly, the appeals filed by the ld. AO are also dismissed.

6.

If the ld. AO wants to continue with these appeals, the ld. AO must show that the claim was made before the NCLT at the time of liquidation about this litigation and consequent demand, if any, arising out of these appeals. The Bench, if such application is made, may consider restoration of the appeals.

IT(TP)A No.929/Bang/2014 & Ors. Page 5 of 5

7.

In the result, all the appeals of the assessee as well as the Revenue are dismissed.

Pronounced in the open court on this 224th day of June, 2025.

Sd/- Sd/-

( SOUNDARARAJAN K ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT

Bangalore, Dated, the 24th June 2025.

/Desai S Murthy /

Copy to:

1.

Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore.

By order

Assistant Registrar ITAT, Bangalore.

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