M/S RAJ OIL MILLS LTD.,MUMBAI vs. ACIT CENTRAL CIRCLE-6(1), MUMBAI

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ITA 1227/MUM/2019Status: DisposedITAT Mumbai04 July 2022AY 2008-094 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that due to the moratorium imposed under the Insolvency and Bankruptcy Code (IBC), all proceedings, including those before the ITAT, stand in abeyance. The IBC has an overriding effect on the Income Tax Act.

What were the facts?

The assessee company was undergoing insolvency proceedings, and the National Company Law Tribunal (NCLT) had approved a resolution plan and imposed a moratorium. This moratorium prevented any further proceedings against the corporate debtor.

What were the issues?

Whether proceedings before the Income Tax Appellate Tribunal can continue when a moratorium has been imposed under the Insolvency and Bankruptcy Code against the assessee company.

Which sections of the Income-tax Act were involved?

Section 14,Section 178(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI S. RIFAUR RAHMAN, AM

For Appellant: Shri Jayant Jhaveri, Ld. DR
For Respondent: Shri Jayant Jhaveri, Ld. DR

Heard together (4 matters)

I.T.A. No. 1227/Mum/2019
I.T.A. No. 1228/Mum/2019
I.T.A. No. 1229/Mum/2019
I.T.A. No. 909/Mum/2019

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / O R D E R Per Bench: The aforesaid appeals have been filed by the assessee and revenue against separate impugned order of even date 26.11.2018, passed by Ld. CIT (Appeals)-54, Mumbai for the quantum of assessment passed u/s 143(3) r.w.s. 153A for the AY 2008-09 to 2009-10.

2.

At the outset, it is noticed that in this case National Company Law Tribunal, Mumbai (NCLT) has passed order dated 19.04.2018 approving the resolution plan of the assessee and the petition filed u/s 10 of IBC, which has been admitted and moratorium has been passed vide order dated 19.04.2018.

3.

Thus, once NCLT has passed the order in pursuance of petition filed u/s 7 of IBC for initiating insolvency process against the corporate debtor, i.e., the assessee company and there is moratorium imposed u/s 14 of IBC, then all the proceedings stands in abeyance.

4.

In view of the above moratorium, no proceedings can be initiated against the corporate debtor, that is, assessee company including the present proceedings before this tribunal, or the income tax proceedings and recovery of demand or giving effect of any order. It is well settled now that, IBC has overriding affect on all the acts including Income Tax Act which has been specifically provided u/s 178(6) of the I.T. Act as amended w.e.f. 01.11.2016.

5.

Accordingly, the appeal filed by the assessee in the present circumstances, cannot be proceeded with, as revenue has also not sought any permission by the committee of creditors. Till the completion of moratorium period or upon the revival of corporate debtor as per the resolution plan approved by the adjudicating authority, the appeals filed by the assessee are treated as dismissed in limini. However, liberty is given to the parties to revive /restitute all the aforesaid appeals after the moratorium period expires or as approved by the adjudicating authority.

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