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Facts
The assessee failed to repay its debt liability, leading financial creditors to file an application under Section 7 of the IBC. The NCLT admitted the application and initiated Corporate Insolvency Resolution Process (CIRP) against the assessee, imposing a moratorium under Section 14(1) of the IBC. The assessee did not appear for the hearing before the Tribunal.
Held
The Tribunal held that due to the moratorium imposed by the NCLT under the IBC, all proceedings against the assessee cannot continue. Consequently, the appeals were dismissed in limine and for statistical purposes. However, liberty was granted to the parties to seek revival of the appeals if the NCLT order is reversed or modified, or if the factual/legal position changes.
Key Issues
Whether income tax appeals against an assessee can continue or should be dismissed when the assessee is undergoing Corporate Insolvency Resolution Process (CIRP) and a moratorium has been imposed under the Insolvency and Bankruptcy Code (IBC).
Sections Cited
Section 143(3) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “I” DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI PRADIP KUMAR KEDIA
Sr. ITA/CO Nos. Appeal A.Y. Pr.CIT Order Assessment Remarks No. by dated Order dated 1. Assessee 2013-14 CIT(A)-31, New Assessment Assessment Order Delhi order dated order dated under section 18.05.2018 25.03.2016 143(3) of the Income Tax Act, 1961. 2 CO No.178/Del/2018 Assessee 2014-15 CIT(A)-44, New Assessment Assessment Order Delhi order dated order dated under section 27.04.2018 18.11.2016 143(3) of the Income Tax Act, 1961.
3. ITA No.6455/Del/2018 Revenue 2012-13 CIT(A)-17, New Assessment Assessment Order Delhi order dated order dated under section 26.07.2018 17.03.2015 143(3) of the Income Tax Act, 1961.
4. Revenue 2014-15 CIT(A)-44, New Assessment Assessment Order Delhi order dated order dated under section 27.04.2018 18.11.2016 143(3) of the Income Tax Act, 1961.
When the appeals were called for hearing, none appeared on behalf of the assessee despite notice. Even, there is no application seeking adjournment.
In view of the aforesaid, we proceed to dispose of the appeals ex-parte qua the assessee after hearing learned Departmental Representative and based on the materials available on record. It is observed, certain financial creditors of the assessee company filed application under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the 3 ITAs No.4825, 6455, 5077/Del/2018 & CO No. 178/Del/2018 assessee before the National Company Law Tribunal (NCLT), since, the assessee had failed to repay the debt liability. Post filing of the present appeals, the NCLT principal bench, New Delhi, has passed an order on 03-01-2020 admitting the application of the financial creditors and initiating CIRP against the assessee. Further, upon admission of the application of the financial creditors, moratorium under section 14(1) of the IBC has been imposed. A copy of the aforesaid order of learned NCLT is available on record.
Thus, in view of the moratorium granted by NCLT, all proceedings in any court of law, Tribunal etc. cannot continue. That being the position in law, no useful purpose is going to be served in keeping the appeals pending. Therefore, in our view, these appeals need to be consigned to the records.
In view of the aforesaid, we dismiss these appeals in limine. However, liberty is granted to the parties to seek revival of the appeals, in case, order of NCLT is either reversed or modified by any higher judicial Authority or if there is any change in factual or legal position or if it is necessary to do so in the interest of the parties.