PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI vs. SUNAR JEWELS PVT LTD

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ITA/483/2023HC DelhiDLHC01033114202324 August 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court condoned the delay of 12 days in filing and 43 days in re-filing the appeal, disposing of the applications accordingly. Regarding the main appeal, the Court held that no interference was called for with the impugned order of the Tribunal. The Tribunal had closed the appeal due to the moratorium declared by the NCLT under Section 14 of the Insolvency and Bankruptcy Code, 2016, against the assessee, which was still in effect. The Tribunal had also granted liberty to the revenue to seek revival of the appeal after the moratorium was lifted. The Court found that no substantial question of law arose for consideration. Consequently, the appeal was closed in terms of the liberty granted by the Tribunal. The operative direction was to close the appeal, with liberty to revive.

What were the facts?

The appellant, Principal Commissioner of Income Tax, Central-3, Delhi, filed an appeal before the High Court of Delhi against an order dated 12.10.2022 passed by the Income Tax Appellate Tribunal (Tribunal). The appeal pertains to Assessment Year (AY) 2011-12. The revenue was aggrieved because the Tribunal had closed its appeal, citing that the respondent assessee, Sunar Jewels Pvt Ltd, was undergoing proceedings before the National Company Law Tribunal (NCLT). A petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, had been filed against the assessee, and a moratorium was declared by the NCLT on 25.04.2019, which continued to be in effect. The revenue sought condonation of delay in filing and re-filing the appeal.

What were the issues?

1. Whether the High Court should condone the delay of 12 days in filing and 43 days in re-filing the appeal filed by the revenue against the order of the Tribunal? (Mixed question of law and fact, concerning procedural rules). 2. Whether the High Court should interfere with the Tribunal's order closing the appeal, given the moratorium declared by the NCLT under Section 14 of the Insolvency and Bankruptcy Code, 2016, against the assessee? (Question of law, concerning the impact of insolvency proceedings on tax appeals). Contentions of the Appellant (Revenue): The revenue sought condonation of delay in filing and re-filing the appeal, providing reasons for the delay. The revenue was aggrieved by the Tribunal's decision to close its appeal due to the ongoing NCLT proceedings against the assessee. The revenue did not dispute the existence of the Section 7 petition or the moratorium declared by the NCLT. Contentions of the Respondent (Assessee): No arguments were recorded for the respondent assessee in the judgment.

Which sections of the Income-tax Act were involved?

Section 7,Section 14

AI-generated summary — verify with the full judgment below

W.P.(C) Page 1 of 3

$~90 * IN THE HIGH COURT OF DELHI AT NEW DELHI

Decision delivered on: 24.08.2023

+ ITA 483/2023 & CM Nos.43607-08/2023

PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI

..... Appellant Through: Mr Abhishek Maratha, Sr Standing Counsel with Mr Akshat Singh, Standing Counsel.

versus

SUNAR JEWELS PVT LTD

..... Respondent

Through: None.

CORAM: HON'BLE MR. JUSTICE RAJIV SHAKDHER HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J. (ORAL): CM No.43607/2023 [Application filed on behalf of the appellant seeking condonation of delay of 12 days in filing the appeal] CM No.43608/2023 [Application filed on behalf of the appellant seeking condonation of delay of 43 days in re-filing the appeal] 1. These are the applications moved, on behalf of the appellant/revenue, seeking condonation of delay in filing and re-filing the appeal. 2. According to the appellant/revenue, there is a delay of 12 days in filing and 43 days in re-filing the appeal. 3. For the reasons given in the applications, we are inclined to condone Digitally Signed By:TARUN RANA Signing Date:25.09.2023 12:29:41 Signature Not Verified

W.P.(C) Page 2 of 3

the delay. It is ordered accordingly. 4. The applications are, accordingly, disposed of. ITA 483/2023 5. This appeal is directed against the order dated 12.10.2022 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. 7. This appeal concerns Assessment Year (AY) 2011-12. 8. The appellant/revenue is aggrieved by the fact that the Tribunal has closed its appeal on the ground that the respondent/assessee is being proceeded against before the National Company Law Tribunal [in short, “NCLT”]. 9. Mr Abhishek Maratha, learned senior standing counsel, who appears on behalf of the appellant/revenue, does not dispute the fact that a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 [in short, “Code”] has been filed in the matter of Reliance Commercial Finance Ltd. v. Sunar Jewels Pvt. Ltd., C.P. No. IB 1444 PB (2018). 9.1 Mr Maratha also concedes that a moratorium has been declared by the NCLT under Section 14 of the Code via an order dated 25.04.2019. 9.2 It is not disputed that the moratorium continues to operate up until today. 10. Given this position, we are of the view that no interference is called for with the impugned order in view of the liberty granted by the Tribunal to seek revival of the appeal after the moratorium is lifted, albeit, in accordance with the law. 11. According to us, no substantial question of law arises for consideration by this court.

Digitally Signed By:TARUN RANA Signing Date:25.09.2023 12:29:41 Signature Not Verified

W.P.(C) Page 3 of 3

12.

The instant appeal is, accordingly closed in terms of the liberty granted by the Tribunal via the impugned order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J AUGUST 24, 2023 aj Digitally Signed By:TARUN RANA Signing Date:25.09.2023 12:29:41 Signature Not Verified

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