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Facts
The revenue filed an appeal, and the assessee filed a cross-objection against an order for AY 2013-14. The assessee company, Rohit Ferro Tech Ltd., was acquired under Insolvency and Bankruptcy Code proceedings and subsequently merged with another entity, TSML, with an appointed date of amalgamation as April 11, 2022.
Held
The Tribunal noted that the assessee company underwent amalgamation under the IBC, and consequently, all demands against it were brought down to zero. This rendered the appeal and cross-objection infructuous.
Key Issues
Whether the appeal and cross-objection are rendered infructuous due to the assessee company's amalgamation and consequent extinguishment of demands under the Insolvency and Bankruptcy Code.
Sections Cited
144C(1), 143(3), 156A(1)
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Income Tax Appellate Tribunal, “C” BENCH KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
Assessment Year: 2013-14 DCIT, Central Circle-4(1), M/s. Rohit Ferro Tech Ltd. Kolkata. Vs. 35, C. R. Avenue, Kolkata- 700012. (PAN: AACCR1593A) (Appellant) (Respondent) CO No. 24/Kol/2019 Assessment Year: 2013-14 M/s. Rohit Ferro Tech Ltd. Vs. DCIT, Central Circle-4(1), Kol. (Cross Objector) (Respondent) Present for: Revenue by : Shri Praveen Kishore, CIT, DR Assessee by : Shri Shri Abhishek Gupta, CA Date of Hearing : 24.02.2025 Date of Pronouncement : 24.02.2025 O R D E R Per Bench : Ld. Commissioner of Income Tax (Appeals)-22, Kolkata [hereinafter referred to as “the Ld. CIT(A)”] in Appeal No. 60/CIT(A)-2/2013- 14/16-17/Kol dated 31.01.2019 for AY 2013-14. C.O. No. 24/Kol/2019 is a Cross Objection filed by the assessee in the revenue’s appeal in ITA No. 1058/Kol/2019.
2. Shri Abhishek Gupta, CA appeared on behalf of the assessee and Shri Praveen Kishore, CIT, DR appeared on behalf of the revenue.
3. At the time of hearing, the Ld. AR of the assessee has filed a letter dated 16.08.2024 which reads as follows:
CO 24/Kol/2019 Rohit Ferro Tech Ltd., AY: 2013-14 “1. This is in reference to the captioned departmental appeal and subsequent cross objection filed by the Assessee company scheduled for hearing before the Hon'ble bench on 14 August 2024. Copy of the hearing notice is enclosed as Annexure 1.
In this regard, we would like to humbly submit that Rohit Ferro -Tech Limited ('RFTL') was acquired under Insolvency and Bankruptcy Code ('IBC') proceedings by Tata Steel Mining Ltd (TSML') pursuant to an order pronounced by Hon'ble National Company Law Tribunal, Kolkata Bench ('Hon'ble NCLT') on April 7, 2022. Further, the Hon'ble NCLT had also approved amalgamation of RFTL into and with TSML effective July 7, 2022. The appointed date of amalgamation was 11 April 2022.
Thereafter, TSML has been merged with TSL pursuant to an order dated 08 August 2023 passed by National Company Law Tribunal, Cuttack Bench. The appointed date of the merger is 01 April 2023. Copy of the NCL T order was placed on record on 14 August 2024.
4. In this connection, reference is invited towards sl. No 30 at Pg No 63 and 64 of the NCLT order, wherein the Hon'ble NCL T order declared that "Granted in terms of the Ghanshyam Mishra and Sons Pvt Ltd Vs Edelweiss Asset Reconstruction Company Ltd, wherein the Hon'ble Supreme Court has held in para 95(i) that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not part of the resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued.
5. Subsequently, the Learned AO passed orders dated 15 March 2023 covering several years including the captioned year MODIFYING and REVISING the demand under section 156A(1) of the income tax Act, 1961 for AYs 07-08, 08-09, 09-10,10- 11,11-12,12-13,13-1414-15,16-17 and 20-21 to NIL. Copy of the relevant order for AY 13-14 was placed on record on 14 August 2024.
Since the subject order stands extinguished, the proceedings arising from such order also get infructuous. Reference is also invited towards the jurisdictional Hon'ble Kolkata ITAT in the case of Kohinoor Steel Pvt Ltd [2024]159 taxmann.com 571 and ACIT, Circle -11(2), Kolkata Vs M/s Kilburn Chemical Ltd [ITA No. 1911/Ko1/2019] wherein it is held that no proceedings including income tax proceedings could be initiated against the company under Corporate Insolvency Resolution Process (,CIRP') and continuation of any pending proceedings is prohibited.
Therefore, in view of the foregoing facts and provisions of law, we humbly submit that as the present proceedings as per the assessment order passed under section 144C(1 )/143(3) dated 13 January 2017 stands extinguished, the appeal no 1058/Kol/2019 arising from the aforesaid order stands invalidated as per law.
CO 24/Kol/2019 Rohit Ferro Tech Ltd., AY: 2013-14 We request your Honour to take the above information on records and acknowledge the same. We shall be glad to furnish any other information that may be required in this regard.”
As per the said letter, the assessee M/s. Rohit Ferro Tech Ltd. was acquired under Insolvency and Bankruptcy Code proceedings by Tata Steel Mining Ltd. This has been made effective by the approved amalgamation with effective date of July 7, 2022 and the appointed date of amalgamation has been fixed as April 11, 2022. Consequent to the amalgamation the demands in the case of the assessee now amalgamated has been brought down to zero. This has also been confirmed by the Ld. CIT, DR. Consequently, as amalgamation has been accepted and the demands have now been effectively brought down to zero the returned income stands. The appeal filed by the revenue and the Cross Objection filed by the assessee become infructuous and consequently stand dismissed as infructuous.
In the result, both the appeal of the revenue as well as the Cross Objections of the assessee stand dismissed.