The Commissioner of Income Tax- III vs. M/s. Sujana Metal Products Limited

ITTA/302/2012HC TelanganaHBHC01030926201205 February 2026Author: P.SAM KOSHY,NARSING RAO NANDIKONDA6 pages

AI SummaryRemanded

What did the High Court hold?

The High Court noted that the respondent company was undergoing insolvency proceedings before the NCLT, with the CIRP having commenced. The Court opined that if the Department had any claim against the respondent company, it was free to raise such a claim before the NCLT. Consequently, the Court held that nothing remained to be adjudicated upon in the instant appeal at that juncture. The appeal preferred by the Department was disposed of in view of the insolvency proceedings. The Court also clarified that the right of the Department to revive the appeal was preserved in the event the insolvency proceedings pertaining to the respondent company were withdrawn.

What were the facts?

The Commissioner of Income Tax-III, Hyderabad (Appellant) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 03.07.2009 passed by the Income Tax Appellate Tribunal, Bench-B, Hyderabad, for the assessment year 2001-2002. The respondent, M/s. Sujana Metal Products Limited (later rebranded as M/s. Splendid Metal Products Limited), was the assessee. The appeal was filed in 2012 and was pending for final hearing. During the pendency of the appeal, it was informed to the High Court that the respondent company had undergone insolvency proceedings before the National Company Law Tribunal (NCLT) initiated by Punjab National Bank. The NCLT had admitted the Corporate Insolvency Resolution Process (CIRP) on 04.04.2019 and appointed an Insolvency Resolution Professional to manage the company.

What were the issues?

1. Whether the appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal for the assessment year 2001-2002 needs to be adjudicated on merits, given the subsequent insolvency proceedings initiated against the respondent assessee. Assessee's Contention: The learned counsel for the respondent informed the Court that the respondent company has been subjected to insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, before the National Company Law Tribunal (NCLT). The NCLT has admitted the Corporate Insolvency Resolution Process (CIRP) and appointed an Insolvency Resolution Professional. Therefore, any claim by the Department should be raised before the NCLT, and nothing remains to be adjudicated in the present appeal. Revenue's Contention: The judgment does not record any specific contention from the revenue regarding the impact of the insolvency proceedings on the appeal. The appeal was filed by the Revenue.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

13447 | IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAO THURSDAY, THE FIFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA INCOME TAX TRIBUNA L APPEAL NO: 302 OF 2012 Appeal under Section 260-,q of the lncome Tax Act, .1961 aggrieve by the order dated 03.07.2009 passed in l.T.A.No. lo}4lHydlzoot for the Assessment year 2oo1-2@2 on the file of the lncome Tax Appeflate Tribunar, Hyderabad -Bench-B, Hyderabad. Between: The Commissioner of lncome Tax- lll, lT Towers, A.C. Guards, Hyderabad ...Appellant AND M/s. Sujana Metal Products Limited, Hyderabad. 18, Nagarjuna Circle, Panjagutta, ...Respondent Counsel for the Appellant : Ms.Bokaro Sapna Reddy (Senior SC lncome Tax) Counsel for the Respondent : Mr. G. G. Ambareswari representing M/s. MN Advocates The Court delivered the following:

INTHE HIGH COURT FORTHE STATE OFTEI.ANGANA AT FTYDERABA-D THE HON'BIJ SRI IUSTICE P.SAM KOSHY AND THE HON'BLE SRI ruSTICE NARSING RAO NANDIKONDA INCOME TAX TRIBUNALAPPEAL o.302 of 2012 DATE:05.02.2026 llenvccr-t: 'l he (-ommrssioner oF Income Tax-III, I l- '[tru'crs, A,C. Guards, I Ir dcrabad. AND \I/s. Sujana Metal Products Limited, l8 Nagarjuna Circlc, l)rn jagutta, lJyderabad. T]DGMENT: (pcr the Hon'ble Si Jutce P.San Ko l) ...Appellant Respondent I Ilcard Ms. Bokaro Sapna Reddy, lcarncd Scnior Stantling (.ounscl for lncome 'Iax Department aPPearlng on lrehali oi thc apPcllant; and Mr. G.V Ambareswari, Iearned c()unscl rcPrese nting \l/s.\1.N. Advocatcs for the respondent'

The instant appeal under Secrion 260A of the Income Tax Act, 196l,has been prcferred by the Department against the respondent / assessee's Company aggrieved by the order dated 03.07.2009, in ITA.No.1084/HYD/2007, passed by the Income Tax Appellate Tribunal Bench'B'Hyderabad, for the assessmcnt ycar 2001-2002. 3. The respondent at the time of flrling oI the appeal was known as M/s.Sulana Metal Products Limited. Subsequent\,, it is stated that the respondent Company's name has again gonc for a change by ln rebranding the same as M/s. Splendid Metal Products Limited

The insant appeal is one which rvas filed in the year 201,2, ar,d upon being admitted, the matter stood pcnding before this Court for final headng. Today when thc mattcr is taken up ftrr hearing, the Iearned counsel for the respondent has informed the Court that the respondent Company has been subjectcd to insolvcncv procecdings at the behest of Punjab National Bank, the t'inancial crcditors of the respondent Company, who have approached thc National Oompany Law Tribunal, Hyderabad Bench ([or short 'NLC'I') ride LP (IB)

Pagc 3 of 4 No.66(r/7/lll)ll/2018 and the rcsPondent Company has gonc in [trr c()rp()rat(' rc srructurit]g of the same' The NCLT has at thc fust instarrcc rle crdcr datcd 04.04.2019, admitted the commencemcnt o[ Oorpo|atc lusolvcncl' Ilcsolution Process ([or short'CIRP) and also appointed ()uc Nfr. llsathisan as the Insolvency Rcsolution l)rofcsstonal. rr,tro iu ttrrn, was directed to take chargc oi thc rcspondcn t ( .orn1'rrnr"s management.

Siocc thc ( lll{l) has already commenced, we are o[ thc considercd opinion thar i[ at all if there is any claim that has to bc rnuclc lrr thc [)t:partment they would be frce to raisc thcir clairn :rgainst tht re s;rontlcnt {..ompany before the NCLT' As sucti, rtothing rern:rins tr, bc fulitrtlicatcd uPon in the instant appcal at this iuncturc' (r- \cc,,rrltnglv, thc lnstant appeal preferred by the Departrncnt st:rncls rlispt,sttl oi irr vicw of the insolvency proccedings dras'n arrinst tlrt rcsp,rudcnt (-ompany. However, thc right of thc [)cparttrtt rrt srl,rtls tcst'rt'cd to revive the appeal in tlrc cvcrrt it /' ,il \ insolvency Proceedings before the NCLT pertatnlng ComPanY stands withdrawn' to the resPondent etilions pending i[ an1" shall stand *55,S[lE,5ix H -7 As a sequel, miscellaneous P closed. However, there shall be no otder as to costs To, ,//' CTION OFFICER The lncome Tax Appellate Tribunal' Hyderabad-Be h-8, HYderabad One CC to Ms.Bokaro SaPna ReddY (Senior SC lncome Tax) [OPUC] One CC to M/s. MN Advocates, Advocate [oPucl Two CD Copies 1 2 3 4 BA w DU :.:.

HIGH COURT DATED: OStO2t2O26 JUDGMENT ITTA.No.3O2 ot 2012 APPEAL IS DISPOSED OF ii:; 'i.r. '.r:- 2 4 lifiq 2117 'r' rl)r: *. THE S{4 t o \:- \ ?')/ I ll-i;O Gr{'\ h*

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