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Facts
The assessee filed appeals against orders of the CIT(Appeals) for assessment years 2010-11 and 2012-13. During the hearing, the assessee's counsel informed the Tribunal that the National Company Law Tribunal (NCLT) had declared a moratorium against the assessee under Section 14 of the Insolvency and Bankruptcy Code, 2016.
Held
The Tribunal observed that the moratorium declared by the NCLT under Section 14 of the IBC has an overriding effect over the provisions of the Income Tax Act, thereby making parallel proceedings under the Income Tax Act impermissible. Citing precedents, the Tribunal dismissed the appeals with liberty to the assessee to file miscellaneous applications once the moratorium is lifted.
Key Issues
Whether appeals under the Income Tax Act can proceed when a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 has been declared against the assessee.
Sections Cited
Section 14 of Insolvency and Bankruptcy Code, 2016, Income Tax Act
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Income Tax Appellate Tribunal, DELHI BENCH “B” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
आदेश /O R D E R PER C.N. PRASAD, J.M.
These two appeals are filed by the Assessee against different orders of Ld. CIT(Appeals)-34, New Delhi for the assessment years 2010-11 and 2012-13.
Ld. Counsel for the assessee inviting our attention to the order passed by National Company Law Tribunal (NCLT), Delhi Bench in CP (IB-588/ND/2023) dated 02.07.2024 submitted that the National Company Law Tribunal declared moratorium in terms of section 14 1
I.T.A.Nos.7182 & 7183/Del/2019 of the Insolvency and Bankruptcy Code 2016 and the proceedings are pending.
We have heard the rival submissions and perused the order of the National Company Law Tribunal. We observe from the order of the National Company Law Tribunal that the Tribunal declared moratorium in terms of section 14 of Insolvency and Bankruptcy Code 2016 by admitting the application filed by the operational creditor. By virtue of this moratorium, insolvency and bankruptcy code had an overriding effect over provisions of Income Tax Act and, therefore, parallel proceedings under Income Tax Act are not permissible. Similar view has been taken by the Mumbai Bench of the Tribunal in the case of Pratibha Industries Ltd. Vs. DCIT (142 taxmann.com 295). The Mumbai Bench of the Tribunal taking note of the decision of the Hon’ble Apex Court in the case of Pr.CIT Vs. Monnet Ispat & Energy Ltd. (107 taxmann.com 481) dismissed the appeals of the Revenue as well as the Assessee as the proceedings under Insolvency and Bankruptcy Code 2016 as the proceedings initiated on the assessee. Thus, the appeals filed by the assessee are hereby dismissed with the liberty to the assessee to file miscellaneous applications once the assessee is declared that it is I.T.A.Nos.7182 & 7183/Del/2019 out of the purview under this Act were of the proceedings under Insolvency and Bankruptcy Code 2016, as and when situation arises.
In the result, appeals of the assessee are dismissed.
Order pronounced in the open court on 18/12/2024