COMMISSIONER OF INCOME TAX (EXEMPTION) vs. AKHIL BHARTIYA GRAMEEN VIKAS SANSTHA

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ITA/580/2017HC DelhiDLHC01014514201731 July 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH1 pages
AI SummaryRemanded

What did the High Court hold?

The Court disposed of the petition. It took note of the respondent's submission that the NCLT had admitted a petition under Section 7 of the IBC against the respondent, thereby initiating the corporate insolvency resolution process. The Court also considered the Division Bench's decision in ITA No. 533/2017, which affirmed that the moratorium under Section 14 of the IBC would remain in force until the CIRP is concluded, a resolution plan is approved, or liquidation is ordered. Consequently, the Court granted the petitioner liberty to revive the arbitration petition subject to further orders from the NCLT. The Court did not decide the merits of the arbitration claim itself but rather the procedural aspect of pursuing it during the moratorium.

What were the facts?

The petitioner, Automation Engineers A.B. Pvt. Ltd., filed an arbitration petition. The respondent, Monnet Ispat & Energy Ltd., informed the Court that the National Company Law Tribunal (NCLT) had admitted a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), filed by the State Bank of India (SBI) against the respondent. The respondent also referred to a Division Bench order in ITA No. 533/2017, which held that a moratorium would continue until the corporate insolvency resolution process (CIRP) is completed or a resolution plan is approved or liquidation is ordered. The respondent further stated that the petitioner is at liberty to approach the Resolution Professional for its claim.

What were the issues?

1. Whether the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, continues to be in effect, preventing further proceedings against the corporate debtor? Assessee (Petitioner) Contentions: The judgment does not record any specific contentions made by the petitioner. The petitioner's counsel appeared, but the decision was based on the respondent's submissions and the existing legal position. Revenue (Respondent) Contentions: The respondent argued that the NCLT had admitted a petition under Section 7 of the IBC against the respondent, initiating CIRP. They relied on a Division Bench order in ITA No. 533/2017, which held that the moratorium under Section 14 of the IBC continues until the completion of CIRP or approval of a resolution plan or order for liquidation. They also submitted that the petitioner could approach the Resolution Professional for its claim.

Which sections of the Income-tax Act were involved?

Section 7,Section 14,Section 31,Section 33

AI-generated summary — verify with the full judgment below

$~9 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ARB.P. 580/2017 AUTOMATION ENGINEERS A.B. PVT. LTD. ..... Petitioner Through Mr.Vijay Kinger & Mr.Sanjay Verma, Advocates versus MONNET ISPAT & ENERGY LTD. ..... Respondent Through Ms.Mathew, Advocate CORAM: HON'BLE MR. JUSTICE JAYANT NATH O R D E R % 16.10.2017 The learned counsel appearing for the respondent submits that in the present case the National Company Law Tribunal (in short ‘the NCLT’) vide its order dated 18.07.2017 has admitted a petition under Section 7 of the Code filed by State Bank of India (in short ‘the SBI’) against the respondent. She also relies upon the order of the Division Bench in ITA No.533/2017 and other connected matters, titled as PR.Commissioner of Income Tax-6, New Delhi v. Monnet Ispat & Energy Ltd., where the Division Bench has held that moratorium will continue till the completion of the corporate insolvency resolution process or until the Bench approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33 of the Act. She further submits that the petitioner is free to approach the Resolution Professional for its claim. In view of the above, the petition is disposed of with liberty to the petitioner to revive the same subject to further orders of the NCLT. JAYANT NATH, J. OCTOBER 16, 2017/v

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