THE COMMISSIONER OF INCOME TAX vs. M/S EASUN PRODUCTS OF INDIA P

TCA/212/2015HC Madras2025/MHC/8907 January 2025Bench: Honourable Dr Justice ANITA SUMANTH4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court decided to close the Tax Case (Appeal) without answering the substantial questions of law. The reasoning was that the appeal was filed in 2015, and the respondent company had since been ordered to be liquidated by the NCLT. The Court observed that it was incumbent upon the Income Tax Department to have initiated necessary processes before the Liquidator in a timely manner. Since the company was liquidated, the Court found no reason to keep the appeal pending. No costs were awarded. The substantial questions of law were left unanswered.

What were the facts?

This Tax Case (Appeal) was filed by the Commissioner of Income Tax, Chennai, against an order dated 08.08.2014 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench, for the assessment year 2009-10. The respondent is M/s. Easun Products of India (P) Ltd. The High Court was informed that the National Company Law Tribunal (NCLT), Chennai, had ordered the liquidation of the respondent company by an order dated 12.09.2023. The NCLT's directions included the liquidator investigating the company's financial affairs, issuing a public announcement, and proceeding with the liquidation process. The High Court noted that the Income Tax Department had not received instructions regarding any claim made before the Liquidator. Given the age of the appeal (filed in 2015) and the liquidation of the company, the Court saw no reason to keep the appeal pending.

What were the issues?

1. Whether the appeal should be kept pending given the liquidation of the respondent company and the lack of action by the Income Tax Department before the Liquidator? (Question of mixed law and fact, turning on procedural considerations and the impact of liquidation proceedings). Assessee's Contention: The judgment does not record any specific contentions made by the assessee (M/s. Easun Products of India (P) Ltd.) as the appeal was disposed of based on the liquidation order. The counsel for the Official Liquidator appeared and presented information regarding the liquidation. Revenue's Contention: The revenue (Commissioner of Income Tax) did not provide instructions to its counsel regarding any claim made before the Liquidator, and the High Court noted the lack of timely initiation of necessary processes by the Department before the Liquidator.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

2025:MHC:89 T.C.(A) No.212 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07.01.2025 CORAM : THE HONOURABLE DR.JUSTICE ANITA SUMANTH and THE HONOURABLE MR.JUSTICE G. ARUL MURUGAN Tax Case (Appeal)No.212 of 2015 The Commissioner of Income tax, Chennai. .. Appellant vs M/s.Easun Products of India (P) Ltd. 6th Floor, Temple Tower, 672, Anna Salai, Nandanam, Chennai – 600 034. .. Respondent Prayer : APPEAL filed under Section 260A of the Income Tax Act, 1961 against order dated 08.08.2014 passed in I.T.A.No.779/Mds/2014 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for assessment year 2009-10. For Appellant : Mr.T.Ravikumar Senior Standing Counsel For Respondent : Mr.V.Kaushik Narayanan for Official Liquidator 1/4 https://www.mhc.tn.gov.in/judis T.C.(A) No.212 of 2015 JUDGMENT (Delivered by Dr.ANITA SUMANTH.,J) Mr.V.Kaushik Narayanan, learned counsel who appears for the Liquidator states that by order dated 12.09.2023, a copy of which is supplied to us, the National Company Law Tribunal (NCLT), Chennai has ordered liquidation of the company. 2. The directions of the NCLT are as follows: 'a) The Liquidator shall strictly act in accordance with the provisions of IBC, 2016 and the attendant Rules and Regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended upto date enjoined upon her. b) The Liquidator shall issue the public announcement that the Corporate Debtor is in liquidation. In relation to officers/employees and workers of the Corporate Debtor, taking into consideration Section 33(7) of IBC, 2016, this order shall be deemed to be a notice of discharge. c) The Liquidator shall investigate the financial affairs of the Corporate Debtor particularly, in relation to preferential transactions/undervalued transactions and such other like transactions including fradulent preferences and file suitable application before this Adjudicating Authority. d) The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016. e) The Liquidator is directed to investigate the financial affairs of the Corporate Debtor in terms of the provisions of Section – 35(1) of IBC, 2016 read with relevant rules and regulations and also file its response for disposal of any pending Company Applications during the process of liquidation. f) The Liquidator shall submit a Preliminary report to 2/4 https://www.mhc.tn.gov.in/judis T.C.(A) No.212 of 2015 this Tribunal within 75 (seventy-five) days from the liquidation commencement date as per regulation 13 of the Insolvency and Bankruptch (Liquidation Process) Regulations, 2016. Further such other or further report as are required to be filed under the relevant Regulations, in addition, shall also be duly filed by him with this Adjudicating Authority. g) The Liquidator is directed to take necessary steps to sell the Corporate Debtor as a Going Concern as per Regulation 32A of the IBBI (Liquidation Process) Regulations, 2016.' 3. We have afforded opportunities to the Income Tax Department to confirm whether any claim has been made before the Liquidator but the learned Standing Counsel has not received any instructions thus far. 4. Since the appeal is of the year 2015, we see no reason to keep the same pending on this account. Since the company has been liquidated, it is for the Department to have initiated necessary processes before the Liquidator in time. 5. Recording the above, this Tax Case (Appeal) is closed returning the substantial questions of law unanswered. No costs. [A.S.M., J] [G.A.M., J] sl

07.01.2025 Index:Yes/No Speaking order Neutral Citation:Yes 3/4 https://www.mhc.tn.gov.in/judis T.C.(A) No.212 of 2015 DR. ANITA SUMANTH,J. and G. ARUL MURUGAN.,J sl T.C.(A)No.212 of 2015 07.01.2025 4/4 https://www.mhc.tn.gov.in/judis

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