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Income Tax Appellate Tribunal, [ DELHI BENCH “I–1”: NEW DELHI ]
Before: SHRI KUL BHARAT & SHRI PRASHANT MAHARISHI
This appeal is filed by Dion Global Solutions Pvt. Ltd., for assessment year 2013-14 against the order passed by the CIT (Appeals)–44, New Delhi, dated 21.08.2018 raising the following grounds of appeal:-
“1. That the Commissioner (Appeals) erred on facts and in law in confirming the upward adjustment made by Ld. Assessing Officer/Transfer Pricing Officer on account of provision of software development service of Rs. 33,642,484 to the Associated Enterprises (AEs).
That the Commissioner (Appeals) erred on facts and in law in confirming the order of the Ld. Assessing Officer/Transfer Pricing Officer (AO/TPO) rejecting the segment results of the Appellant without undertaking any exercise or directing the Ld. AO/TPO to examine correctness of segment workings done by the Appellant.
3. That the Commissioner (Appeals) erred on facts and in law in confirming the action of the Ld. AO /TPO:
3.1 by ignoring the facts that the segmental results computed by the Appellant were duly verifiable with the records and there is no legal requirement under law to furnish audited segmental results of AE and Non-AE business for determination of arm’s length price. 3.2 without appreciating the facts that AEs of the Appellant were operating in different economy and market than the Non-AEs, being domestic parties hence these transactions could not be clubbed together for benchmarking the international transactions. 3.3 without appreciating the principle that TP adjustments have to be made only in respect of international transactions entered into by the Appellant with its AEs and not at entity level. The appellant craves leave to add to, alter, amend or vary from the above grounds of appeal at or before the time of hearing. “
2. At the time of hearing of the appeal, Insolvency Resolution Professional, Mr. Pardeep Kumar Lakhani, submitted a letter dated 26th April, 2021 stating that in case of the above assessee company Corporate Insolvency Resolution Process [ CRIP] has been initiated and NCLT, New Delhi Bench has passed an order dated 18.08.2020 wherein Mr. Pardeep Kumar Lakhani has been appointed as IRP. It was submitted that according to Section 14 of the Insolvency and Bankruptcy Code, 2016 during the course of moratorium period any suit institutes or continuation of pending suits or proceedings against the corporate debtor in any court of law, Tribunal, arbitrator or other authority is prohibited. Therefore, it was requested that the penalty proceedings initiated may be dropped.
The ld. DR vehemently objected to the above and stated that it is an appeal filed by the corporate debtor and not against the debtor. So Section 14 of IBC 2016 does not apply. It was further stated that the appeal has been filed by the Director, Shri Maninder Singh Grewal. He submitted that as soon as the Corporate Insolvency Resolution process [CIRP] commences, the Directors are not capable of filing any appeal and, therefore, this appeal filed by the director is not maintainable. He submitted that it is the Committee of Creditors that will decide whether to continue with this appeal or not and, therefore, this appeal deserves to be dismissed. 4. None remained present on behalf of the company or IRP. 5. We have carefully considered the rival contentions and find that the appellant company has undergone CIRP, the appeal is filed by the Director Page | 2
of the company. As soon as the CIRP commences only the Committee of Creditors and instructed by them , IRP is competent to file and pursue the appeal. In this case, it is filed by the Director of the company. Therefore, same is now not maintainable. We grant liberty that Committee of Creditors if so decide and authorize him to pursue this appeal, he may file such appeal afresh in that circumstance. 6. In the result appeal of the assessee is dismissed.
Order pronounced in the open court on : 03/11/2021.