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Facts
The Revenue appealed against the orders of the CIT(A) concerning Assessment Years 2013-14 and 2014-15. These appeals were filed after a significant delay, for which the Revenue sought condonation, citing issues with communication of orders and system resources.
Held
The Tribunal held that the Insolvency and Bankruptcy Code (IBC), 2016, overrides the Income Tax Act, 1961. Since the Resolution Plan for the corporate debtor (assessee) was approved by the NCLT, all prior proceedings, including tax appeals, become infructuous.
Key Issues
Whether Income Tax Act proceedings can continue against a corporate debtor after the approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016, and whether the appeals filed by the Revenue are infructuous due to the overriding effect of the IBC.
Sections Cited
250, 143(3), 7, 14, 31, 238, 178(6), 13
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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
order : 31-December-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: These two appeals filed by the Revenue are against the separate orders of the Commissioner of Income Tax (NFAC), Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AYs 2013-14 & 2014-15 dated 16.03.2023, which have been passed against the assessment orders u/s 143(3) of the Act, dated 29.02.2016 and 16.12.2016, respectively. Since both the appeals were heard together, they are being decided vide this common order for the sake of convenience and brevity. 1.1 The Registry has informed that the both the appeals are delayed by 49 days. Along with the appeal memo, the Revenue has filed an application seeking condonation of delay. The reasons mentioned are 6.1 Since in this case, the petition u/s 7 of IBC, 2016 has been admitted and the CIRP had commenced and moratorium u/s 14 of the IBC, 2016 had been enforced, therefore, the appeal before the Tribunal becomes infructuous. Further, subsequent to the approval of the resolution plan, all proceedings initiated prior to the admission of application of CIRP are discontinued and the statutory dues forming part of the resolution plan only can be enforced. Hence, the appeal of the Revenue becomes infructuous and are liable to be dismissed.
In a similar case, the Coordinate Bench of the Tribunal of the ITAT, Kolkata 'C' Bench in the case of Kohinoor Steel (P.) Ltd. v. Income-tax Officer [2024] 159 taxmann.com 571 (Kolkata - Trib.) have also held as under: ■ It was observed that the operational creditor of assessee has filed the petition before the NCLT and as per the assessee's own case for its CIRP as per rule 4 of Insolvency & Bankruptcy Code (IBC), 2016 no proceedings can