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Facts
The assessee, M/s. Era Infra Engineering Ltd., engaged in infrastructure, initially declared a loss, but a subsequent search assessment under section 153A resulted in a significantly increased income. The Revenue appealed certain reliefs granted by the CIT(A). The assessee filed a Cross Objection, arguing that the Revenue's appeal could not be instituted or continued due to a moratorium under Section 14 of the IBC, 2016, as the company had been admitted into Corporate Insolvency Resolution Process (CIRP) by an NCLT order dated 08.05.2018.
Held
The Tribunal, relying on a previous coordinate bench order and NCLT directions, held that a moratorium under Section 14 of the IBC prohibits the institution or continuation of proceedings against the corporate debtor. Consequently, the Revenue's appeal was dismissed without delving into the merits of the case, with liberty granted to the Revenue to re-institute the appeal after the completion of the CIRP proceedings.
Key Issues
Whether an appeal filed by the Revenue against an assessee, which is under a moratorium period due to Corporate Insolvency Resolution Process (CIRP) under the IBC, 2016, is maintainable.
Sections Cited
Income Tax Act, 1961: Sections 143(3), Income Tax Act, 1961: Sections 132, Income Tax Act, 1961: Sections 153A, Income Tax Act, 1961: Sections 154, Insolvency and Bankruptcy Code, 2016: Sections 14, Insolvency and Bankruptcy Code, 2016: Sections 13(2), Insolvency and Bankruptcy Code, 2016: Sections 7, Insolvency and Bankruptcy Code, 2016: Sections 14(1)(a), Insolvency and Bankruptcy Code, 2016: Sections 14(1)(b), Insolvency and Bankruptcy Code, 2016: Sections 14(1)(c), Insolvency and Bankruptcy Code, 2016: Sections 14(1)(d), Securitisation and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2022
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Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
Before: SHRI C. N. PRASAD & SHRI AVDHESH KUMAR MISHRA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.337/Del/2024, A.Y. 2014-15 Deputy Vs. M/s. Era Infra Commissioner of Engineering Ltd. Income Tax, CC-28, C-56/41, Sector-62, New Delhi Noida H.O.Gautam Budh Nagar,U.P.-201301 PAN: AAACE1268K (Appellant) (Respondent)
C.O. No. 28/Del/2024, A.Y. 2014-15 Arising out of ITA No.337/Del/2024, A.Y. 2014-15
M/s. Era Infra Vs. Deputy Commissioner of Engineering Ltd. Income Tax, CC-28, C-56/41, Sector-62, New Delhi Noida H.O.Gautam Budh Nagar, U.P.-201301 PAN: AAACE1268K (Appellant) (Respondent) Appellant by Ms. Chinu Bhasin, CA Respondent by Ms. Nidhi Singh, CIT-DR Date of Hearing 09/05/2024 Date of Pronouncement 20/05/2024
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ITA No.337/Del/2024 C.O. no. 28/Del/2024 ORDER PER AVDHESH KUMAR MISHRA, AM
This appeal of the Assessment Year 2014-15, preferred by the appellant/Revenue, challenges the order dated 08.11.2023, of the Commissioner of Income Tax (Appeals)-30, New Delhi [In short, the ‘CIT(A)’]. The assessee filed Cross Objection to this appeal. 2. The relevant facts, in brief, are that the assessee, a company, engaged in the business of infrastructure activities, filed its original return of income on 29.11.2014 declaring loss of Rs. 176,68,96,740/-. On scrutiny, the original assessment was completed under section 143(3) of the Income Tax Act, 1961 (In short, the ‘Act’) on 30.12.2017 accepting the loss disclosed in the return of income. Later, the assessee was searched under section 132 of the Act on 14.10.2020. Various incriminating material were seized. Consequentially, the search assessment was completed at income of Rs.585,30,65,499/- under section 153A of the Act as against the assessed loss of Rs. 176,68,96,740/-. Later on, the search assessment completed under section 153A of the Act was revised/rectified under section 154 of the Act determining the
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ITA No.337/Del/2024 C.O. no. 28/Del/2024 income at Rs.649,84,06,413/-. In first appeal, the assessee got part relief. The reliefs granted by the CIT(A) were challenged by the Revenue vide 11 grounds of appeal. The assessee filed Cross Objection to the Revenue appeal by raising objection to the institution of appeal during the moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 (In short, the ‘IBC’) in this case.
At the outset of the hearing, the Ld. AR submitted that this case is covered by the order dated 28.06.2023 of the coordinate bench in this case for the A.Y. 2017-18 in ITA No.1506/Del/2022. It was further submitted by the Ld. AR that the case of assessee company had been admitted to Corporate Insolvency Resolution Process (“CIRP”) under the IBC vide order dated 08.05.2018 passed by the Hon’ble National Company Law Tribunal (“NCLT”) in C.A. No. 997 (PB)/ 2018 IN C.P. No. IB-190(PB)/2017 and Mr. Rajiv Chakraborty (Regn. No. IBBI/IPA-001/IP-P00602/2017- 18/11053) was appointed as the Interim Resolution Professional (“IRP”) and public announcement had been made in Newspaper regarding the admission of the corporate
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ITA No.337/Del/2024 C.O. no. 28/Del/2024 debtor to the CIRP. It was therefore, prayed that the Revenue appeal deserves dismissal.
We have heard both the parties and perused the case record.
On perusal of the record and the order dated 28.06.2023 of the coordinate bench in this case for the AY 2017-18 in ITA No.1506/Del/2022, we find that the NCLT has granted moratorium against the institution of proceedings against the corporate debtor by issuing direction in para 24 of its order as under:-
“24. In pursuance of section 13(2) of the Code, we direct that Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under section 7 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d) and thus following prohibitions are imposed which must be followed by all and sundry: (a) 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; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) 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
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ITA No.337/Del/2024 C.O. no. 28/Del/2024 Securitisation and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2022; (d) the recovery of any property by any owner or lessor where such property is occupied by or in the possession of the corporate debtor.” 6. Following the above-mentioned order of the coordinate bench in this case for the AY 2017-18 in ITA No.1506/Del/2022 and pursuant to the aforementioned directions of the NCLT, we dismiss the appeal of the Revenue without going into the merits of the case. However, the Revenue shall be free to institute the appeal after the completion of the CIRP proceedings, if so advised, as per the relevant provisions of the Act, for which the Ld. DR seemed in agreement.
In the result, the appeal of the Revenue is dismissed and the Cross objection of the assessee is allowed. Order pronounced in the open court on 20th May, 2024. Sd/- Sd/- (C.N.PRASAD) (A.K.MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/05/2024 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
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