MOSER BAER INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 4195/DEL/2016Status: DisposedITAT Delhi17 March 2021AY 2011-124 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 noted that Section 238 of the Insolvency and Bankruptcy Code, 2016, has an overriding effect over the Income-tax Act. The assessee's counsel stated they did not press the appeal.

What were the facts?

The assessee company, M/s. Moserbaer India Ltd., is under liquidation proceedings before the National Company Law Tribunal (NCLT). The Supreme Court has noted that even if the revenue were to succeed, the company in liquidation cannot pay the tax dues.

What were the issues?

Whether the Insolvency and Bankruptcy Code, 2016, overrides the Income-tax Act, 1961, in cases of company liquidation.

Which sections of the Income-tax Act were involved?

Section 238

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘I-1’ : NEW DELHI

Before: SHRI R.K. PANDA & SHRI KULDIP SINGH

For Appellant: Shri Upvan Gupta, Advocate
For Respondent: Shri Surender Pal, CIT DR
Hearing: 17.03.2021

Date of Hearing : 17.03.2021 Date of Order : 17.03.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, M/s. Moserbaer India Ltd., (hereinafter referred to as ‘the assessee’), by moving an application supported with an order passed by Hon’ble Supreme Court in Civil Appeal No.4704 of 2014 order dated July 21, 2020 in assessee’s own case brought to the notice of the Bench that National Company Law Tribunal (NCLT) vide order dated 20.09.2018 has passed directions for liquidation of the assessee company by appointing Shri Anil Kohli, Resolution Professional as Liquidator under section 33 (2) of the Insolvency and Bankruptcy Code, 2016 (for short ‘the Code’) to dispose off the present appeal accordingly.

2.

Hon’ble Supreme Court in assessee’s own case in Civil Appeal No. 4704 of 2014 order dated July 21, 2020 also held as under :-

“ The Official Liquidator has filed a report that the Respondent-Company (Moser Bear India Ltd. ) is not financially viable and is under liquidation in proceedings pending before the National Company Law Tribunal. Even if the Appellant-Revenue were to succeed, the Official Liquidator is not in a position to pay the tax amount involved in these appeals. Indisputedly, the respondent-Company has gone in liquidation. The Company in liquidation is not in a position to pay its outstanding dues including taxes. Moreover, the tax effect in the concerned appeals is just over Rs.2,00,00,000/- (Rupees Two Crore Only). Taking overall view of the matter, we deem it appropriate to dispose of these appeals, leaving the question of law open, to be decided in appropriate case. Ordered accordingly.”

3.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

4.

Provisions contained under section 238 of “the Code” are having an overriding effect over all other Central and State statutes including Income-tax Act as held by Hon’ble Supreme Court in case of PCIT vs. Monnet Ispat and Energy Ltd. SLP (C)

No.6483 of 2018 order dated 10.08.2018 by returning following findings :-

“Given section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income-tax Act.”

5.

In view of the matter, section 238 of the Code will have overriding effect over all other Central and State statutes including the Income-tax Act and all the claims including claim of the Income-tax Department under the Income-tax Act, 1961 shall be entertained by the Official Liquidator u/s 53 (1) of the Code.

Keeping in view all these facts, ld. AR for the assessee stated at Bar that he does not press this appeal and same may be dismissed as withdrawn. Consequently, present appeal is dismissed as withdrawn having been become infructuous. Order pronounced in open court on this 17th day of March, 2021 after the conclusion of the virtual hearing.

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