SATRA PROPERTIES (INDIA) LTD,MUMBAI vs. DCIT CEN CIR 5(2), MUMBAI

When the present cross-appeals were called for hearing, neither anyone appeared on behalf of the assessee nor was any application seeking adjournment filed. On perusal of the record, it is observed that on previous occasions also no one appeared on behalf of the assessee, apart from some intermittent representation on a few dates of hearing on behalf of the assessee. Therefore, in view of the above, we proceed to dispose off the present cross-appeals ex–parte, qua the assessee after hearing the learned Departmental Representative („learned DR‟) and based on the material available on record.

Pursuant to conclusion of hearing, the learned DR vide letter dated 13/09/2022 filed a copy of service of notice on the Interim Resolution Professional (‘IRP‟) appointed in the case of the assessee by the Hon’ble National Company Law Tribunal (‘Hon‟ble NCLT’). Along with the aforesaid letter, the learned DR also filed the reply received from the appointed IRP. From the perusal of the aforesaid, we find that Mr. Devarajan Raman has been appointed as IRP of the assessee vide order dated 03/08/2020 in CP (IB) No. Page | 2

It is pertinent to note that as per the provisions of section 14 of the Code, institution of a Suit or continuation of pending Suit or proceedings against the Corporate Debtor including execution of any judgment, decree, or order in any Court of law, Tribunal, Arbitration Panel or other authorities, shall be prohibited during the moratorium period. The period of moratorium shall have the effect from the date of such order till the completion of CIRP; or if, during the CIRP period, Hon’ble NCLT approves the resolution plan under section 31(1) or passes an order for liquidation of corporate debtor under section 33 of the Code, moratorium shall cease to have effect on date of such order. As noted above, it has been admitted that the moratorium period has commenced in the present case. We find that the Hon’ble Supreme Court in case of Alchemist Asset Reconstruction Co. Ltd. v/s Hotel Gaudavan Pvt. Ltd. [2017] 88 taxmann.com 202 (SC) held that even arbitration proceedings cannot be initiated after imposition of the moratorium under section 14(1)(a) has come into effect and it is non est in law and could not have been allowed to continue.

We find that as regards filing / continuation of appeal under the provisions of the Act, during the continuation of moratorium period is concerned, the Hon’ble Delhi High Court in PCIT v/s Monnet Ispat & Energy Ltd., [2018] 304 CTR 234 (Del.), observed as under:– Page | 3

The aforesaid decision of the Hon’ble Delhi High Court was affirmed by the Hon’ble Supreme Court in PCIT v/s Monnet Ispat & Energy Ltd., [2018] 18 SCC 789. The Hon’ble Supreme Court also upheld the overriding nature and supremacy of the provisions of the Code over any other enactment in case of conflicting provisions by virtue of non obstante clause contained in section 238 of the Code. Thus, we are of the considered view that the present cross- appeals are a continuation of pending Suit against the Corporate Debtor, which is prohibited under section 14 of the Code. It is further pertinent to note that

We further find that appeal by the assessee have been filed by the Managing Director of the assessee company, which after initiation of CIRP has become functus officio. We further find that the Interim Resolution Professional has not been impleaded as a party in the present cross-appeals before us by filing revised Form No. 36. Once the insolvency proceedings commenced under the Code, all the litigations are to be pursued by Interim Resolution Professional appointed by the Committee of Creditors. In view of the above, we are of the considered view that the present cross-appeals, in the current form, are not maintainable.

Thus, respectfully following the aforesaid decision in Monnet Ispat & Energy Ltd. (supra), which approach has also been adopted by various co– ordinate bench of the Tribunal, we dismiss the present appeals with a liberty that upon completion of the moratorium period, if it is so decided, the assessee and the Revenue may seek recall of this order by impleading Managing Director / Director, representing the new management of the assessee company, or the Official Liquidator, as the case may be. 9. To sum up, the cross-appeals by the assessee and the Revenue are dismissed. Order pronounced in the open Court on 05/12/2022