M/S. COASTAL ENERGY PRIVATE LIMITED REPRESENTED BY OFFICAL LIQUIDATOR,CHENNAI vs. ACIT CENTRAL CIRCLE -1(1), CHENNAI

ITTPA 53/CHNY/2023Status: DisposedITAT Chennai11 November 2024AY 2011-1244 pages
AI SummaryAllowed

What were the facts?

These eight appeals by Coastal Energy Pvt. Ltd. (the assessee) challenge the common order of the CIT(A)-18, Chennai, which upheld assessments for Assessment Years (AYs) 2010-11 to 2017-18. These assessments were framed during the moratorium period under Section 14 of the Insolvency & Bankruptcy Code (IBC), 2016, after an insolvency application was admitted by the NCLT on January 6, 2020. The assessee is engaged in fuel supply chain, logistics, and coal trading. A search under Section 132 was conducted on January 4, 2017. Subsequently, reassessments were initiated under Section 147. The Assessing Officer (AO) made additions based on sworn statements and transfer pricing adjustments proposed by the TPO. The assessee had filed multiple settlement applications, all rejected. The Madras High Court directed the AO to proceed with assessments but not give effect to them pending further orders. The AO completed assessments on February 26, 2020, and later on April 17, 2021, after a fresh TPO order.

What did the Tribunal hold?

The Tribunal held that the Assessing Officer and the Learned Commissioner of Income Tax (Appeals) erred in making additions as unexplained money without considering the entire materials and facts available on record, including those filed with the Settlement Commission as per Section 245HA(3). The Tribunal noted that the assessee had reconciled the income offered in the sworn statement of Mr. Ahmed Buhari with the seized materials and offered it as income before the Settlement Commission, claiming corresponding expenditures. The lower authorities rejected the claim for expenditure, considering only the income offered based on the statement. Therefore, the Tribunal set aside the order of the CIT(A) and remitted the issues back to the file of the AO for framing a de novo assessment, with a direction to provide a reasonable opportunity to the assessee and consider all materials. The appeals for AY 2011-12 to 2017-18 were also set aside and remitted for the same reasons.

What were the issues?

1. Whether the Learned Commissioner of Income Tax (Appeals) erred in upholding the Assessment Order dated 17.04.2021 passed during the moratorium period under Section 14 of the Insolvency and Bankruptcy Code, 2016, for which an insolvency application pertaining to the appellant had been admitted by the National Company Law Tribunal vide order dated 06.01.2020? (Question of law) Assessee's Contention: The assessments were invalid as they were framed during the moratorium period under the IBC, which prohibits the initiation or continuation of proceedings against the corporate debtor. Revenue's Contention: The revenue argued that there was no fault in the action of the CIT(A) in upholding the AO's action of making additions considering seized materials, especially since the settlement commission's proceedings were rejected. The TPO's order was based on seized materials not available during the original assessment.

Which sections of the Income-tax Act were involved?

Section 14,Section 143(3),Section 92CA,Section 144C(3),Section 147,Section 153B,Section 153A,Section 139(1),Section 132,Section 148,Section 143(2),Section 142(1),Section 245HA,Section 245D(1),Section 245C,Section 92CA(3)

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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI S.R.RAGHUNATHA

Hearing: 11.09.2024Pronounced: 11.11.2024

PER S.R. RAGHUNATHTA, ACCOUNTANT MEMBER:

These appeals by the assessee are arising out of the common order of the Commissioner of Income Tax (Appeals)-18, Chennai in Appeal Reference Nos. CIT(A),Chennai-18/10218/2009-10, 10146/2010-11, 10117/2011-12, 10137/2012-13, 10409/2013-14, ITA Nos.52 to 59/CHNY/2023 11107/2014

The order continues below.

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