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Facts
The Revenue challenged the CIT(A)'s order deleting a penalty levied under section 271(1)(c) of the Income Tax Act, 1961, for A.Y. 2016-17. The assessee is undergoing a Corporate Insolvency Resolution Process (CIRP) initiated by an NCLT order which imposes a moratorium on proceedings. A similar issue regarding a penalty under section 271B in the assessee's case was previously remanded by the ITAT to the CIT(A) due to the NCLT moratorium.
Held
Following a decision by a co-ordinate bench in the assessee's own case, the Tribunal set aside the CIT(A)'s order. The matter, including all related issues, was restored to the file of the CIT(A) for fresh adjudication with similar directions to consider the overriding effect of the NCLT moratorium.
Key Issues
Whether the penalty under section 271(1)(c) of the Income Tax Act can be sustained when the assessee is undergoing a Corporate Insolvency Resolution Process (CIRP) under an NCLT order imposing a moratorium on proceedings.
Sections Cited
271(1)(c), 271B, Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI B R BASKARAN, AMAND SHRI SANDEEP SINGH KARHAIL, JM
O R D E R Per B R Baskaran, AM:
The Revenue has filed this appeal challenging the order passed by the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), wherein he has deleted the penalty levied u/s. 271(1)(c)of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2016-17.
None appeared on behalf of the assessee. The learned Departmental Representative ('ld. DR' for short) submitted that the assessee company is subjected to corporate insolvency resolution process (CIRP), vide order dated 14.06.2017 passed by the National Company Law Tribunal (NCLT), Mumbai Bench. He further submitted that the ld. Assessing Officer ('A.O.' for short) had also levied penalty u/s. 271B of the Act
(A.Y. 2016-17) ACIT vs. Varun Resources Limited and the same was challenged by the assessee before the ld. CIT(A) as well as before the ITAT. The Tribunal, vide its order dated 27.05.2024 passed in has restored the issue to the file of the ld. CIT(A), since the moratorium issued by the NCLT on the proceedings against the assessee will override the provisions of the I. T.
Act. The ld. DR submitted that the issues contested in this appeal may also be restored to the file of the ld. CIT(A) following the decision rendered by the co-ordinate bench (referred above).
Having regard to the submissions made by the Ld D.R and following the decision rendered by the co-ordinate bench in the assessee’s own case (referred above), we set aside the order passed by the ld. CIT(A) and restore all the issues to his file with similar directions given by the co-ordinate bench in the order referred supra.
In the result, the appeal filed by the Revenue is treated as allowed.
Order pronounced in the open court on 14.06.2024.