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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
O R D E R Per Bench: Both the appeals bearing common question of law and facts are taken up for disposal by way of composite order to avoid the repetition of discussion.
Appellant M/s. Eskay Knits (India) Ltd. (hereinafter referred to as the assessee company) by filing aforesaid appeals sought to set aside the impugned orders of Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT(A)] even dated 25.10.2019 for A.Ys. 2008-09 & 2009-10 on identically worded Assessing Officer and confirmed by the CIT(A) on the grounds taken from A.Y. 2008-09 inter alia that; “1. That, the notice issued under section 271(1)(c) read with section 274 of the Act and the order passed under section 271(1)(c) of the Act are illegal, bad in law and without jurisdiction.
2. Learned CIT(A)-53, on the facts and in the circumstances of the Appellant’s case and in law, has erred in upholding the levy of penalty of Rs.7,00,77,680 under section 271(1)(c) of Income Tax Act, 1961 (the "Act") for furnishing inaccurate particulars of income with regard to disallowance of depreciation of Rs.12,91,79,667 as pertaining to alleged bogus plant and machinery purchased during the year and addition of interest of Rs.7,75,39,149 quantified as pertaining to payments for alleged bogus purchases of plant and machinery.
That the Learned CIT(A) and Assessing Officer has grossly erred on facts and in law in passing the order u/s. 271(1)(c) of the I. T. Act, 1961 without giving sufficient and reasonable opportunity to the Appellant to be heard after rejecting Appellants request to keep penalty proceedings in abeyance till receipt of order of ITAT in quantum proceedings. That the order has been passed in violation of principles of natural justice.
4. That the Learned CIT(A) and AO, has erred in levying penalty on facts and in law, without waiting for the order of the Hon'ble ITAT in quantum proceedings.
5. That improper and invalid satisfaction has been recorded while completing the assessment proceeding hence the notice issued under section 274 of the Act, is illegal, bad in law and without jurisdiction.
6. That the Penalty has been initiated vide notice under section 271(1)(c) read with section 274 of the Act, without any specific charge and not consistent with satisfaction, hence, the said notice and the order passed under section 271(1)(c) of the Act are illegal, bad In law and without jurisdiction.
7. All of the above grounds of appeal
are without prejudice and are mutually exclusive to each other.
8. The Appellant craves leave to add, amend, alter and/or delete any of the above grounds of appeal at or before the time of hearing.”
3. Briefly stated facts necessary for adjudication of the controversy at hand in the aforesaid appeals are : on the basis of under section 147 read with section 143(3) of the Act wherein various additions/disallowances have been made and penalty proceedings were initiated under section 271(1)(c) of the Act.
Declining the contentions raised by the assessee company, the AO proceeded to levy the penalty to the tune of Rs.7,00,77,680/- & Rs.12,57,02,820/- @ 100% of the tax sought to be evaded in A.Y. 2008-09 & 2009-10 respectively.
The assessee company carried the matter before the Ld. CIT(A) by way of filing the appeal who has confirmed the penalty by dismissing the appeal preferred by the assessee company.
Feeling aggrieved, the assessee company has come up before the Tribunal by way of filing the present appeals.
Despite issuance of the notice to the assessee company none appeared on behalf of it, so the Bench decided to decide these appeals on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue.
We have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.
At the very outset, it is brought to the notice of the Bench that the National Company Law Tribunal (NCLT), Ahmedabad the Insolvency and Bankruptcy Code 2016 has passed order dated 17.02.2020, which is available on the file, to the following effect:-
“24. The petition is, therefore, admitted and the moratorium is declared for prohibiting all of the following in terms of sub-section (1) of Section 14 of the Code: - (i) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (iii) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property Including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (iv) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.”
In view of the order passed by the Hon’ble NCLT, we are of the considered view that since proceedings under insolvency and bankruptcy code have already been initiated and moratorium has been declared for prohibiting all the proceedings against the corporate debtors, present appeals in the present format are not maintainable, being not filed by IRP who can file appeal with approval of committee of creditors, hence both the appeals are liable to be dismissed being not maintainable at this stage.
Resultantly, the aforesaid appeals filed by the assessee company are dismissed with liberty to file fresh appeal in proper income or to get the present appeals restored by moving an application.
Order pronounced in the open court on 18.01.2022.