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Facts
The assessee and revenue filed appeals (ITA No.281/Del/2017 and ITA No.2287/Del/2017) and the assessee filed a cross-objection (No.48/Del/2022) against assessment orders under Section 143(3). During the proceedings, it was noted that the National Company Law Tribunal (NCLT) had issued an order dated 02.02.2021, directing that upon payment of purchase consideration, all claims and liabilities, including those from tax authorities, against IL&FS group entities for periods prior to October 15, 2018, would be unconditionally extinguished.
Held
Considering the binding directions from the NCLT order, the Income Tax Appellate Tribunal dismissed both the appeals filed by the assessee and the revenue, as well as the assessee's cross-objection. The Tribunal granted liberty to both parties to approach it again once the NCLT proceedings are fully completed.
Key Issues
Whether appeals and cross-objections before the ITAT should be dismissed when the NCLT has issued an order extinguishing all claims and liabilities, including tax-related ones, against the assessee's group entities.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: DR. B. R. R. KUMAR & SH. SUDHIR KUMAR
2287/Del/2017 are two appeals by the assessee and the revenue and one cross objection filed by the assessee preferred against separate orders of the Commissioner of Income Tax (Appeals)-12, New Delhi dated 18.11.2016 and 10.01.2017 pertaining to A.Y. 2013-14 and 2012- 13 arises out of the order of the assessment order dated 03.02.2016 and 16.02.2015 passed under Section 143(3) of the Income Tax Act, 1961.
We find that vide order dated 02.02.2021 the National Company Law Tribunal, Mumbai Bench of its order the Learned Tribunal directed as under:-
“H) Declare and direct that upon payment of the Purchase Consideration all: i) claims (disclosed or undisclosed, and whether existing at or relating to a period prior to October 15, 2018) of all the creditors (including, the Central Government, any State Government, statutory, local, tax or regulatory authorities to whom such claim is owed under any Law (including any claim arising out of regulatory or enforcement action which pertains to a period prior to October 15, 2018)); and ii) all liabilities whether actual or contingent and whether existing at or relating to a period prior to October 15, 2018 including such claims in respect of which arbitration proceedings have been initiated or any awards, decrees or judgments have been passed, of or in respect of IL&FS Environmental & Infrastructure Services Limited, Dakshin Dilli Swachh Initiative Limited; Swayam Swachatta Initiative Limited; RDF Power Projects Limited; East Delhi Waste Processing Company Limited; and Kanak Resources Management Limited shall stand unconditionally and fully extinguished; I) Direct that any amounts received from Ever Enviro Resource Management Private Limited which have been deposited into the relevant bank/ escrow accounts shall not be adjusted or set off against any other dues pertaining to any bank/financial institution and shall be applied as per the orders of this Hon'ble Tribunal; J) For any further reliefs as this Hon'ble Tribunal deems fit and proper in the facts and circumstances
The Uol (Respondent) represented by the Regional Director, MCA (WR), Mumbai has concurred with the recommendations of Hon'ble Justice D. K. Jain (Retd.). The Respondent has no objection to the prayers.
Hon'ble Justice D. K. Jain (Retd.) has approved: a. sale of 100% of the shareholding of the Applicant and IL&FS Employee Welfare Trust in IEISL and consequently each of the Specified Environment Entities held by IEISL to ERMPL; and b. the acquisition of the 100% of the shareholding of TEL and UWPSL held by IEISL by the Applicant for a nominal sum of INR 1/-.
We have heard the Ld. counsel for the Applicant as well as the Representative of the Regional Director and have perused the pleadings and documents attached thereto including the approval of Hon'ble Justice D. K. Jain (Retd.). We are satisfied and are of the considered view that the sale of the Applicant's stake and other entities as well as the acquisition by the Applicant as approved by Hon'ble Justice D. K. Jain (Retd.) needs to be ratified and recorded. Hence ordered.
ORDER CA No. 1163 of 2020 be and the same is allowed without contest in terms of the observations made supra. There would however be no order as to costs.”
Pursuant to the aforementioned directions both the appeals are dismissed. However, a liberty is given to the assessee/Revenue to approach this Tribunal after completion the proceedings as per the order of the NCLT.
In the result, both the appeals are dismissed.
Cross objection No.48/Del/2021 (A.Y. 2012-13)
Since the appeal of the revenue is dismissed this cross objection is also dismissed.
Order pronounced in the open court on 01.07.2024.