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Facts
The Revenue filed an appeal against the order of the CIT(A) that allowed the assessee's appeal against the assessment order, where the loss from unaccounted E-auction sale was disallowed. The assessee is a private limited company engaged in iron ore trading, which filed a NIL income return.
Held
The Tribunal noted that the assessee is undergoing insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, and a moratorium has been declared. Under Section 14 of the IBC, no suits can continue against the corporate debtor during the moratorium period.
Key Issues
Whether the appeal filed by the Revenue can proceed when the assessee company is under moratorium due to insolvency proceedings?
Sections Cited
143(3), 14, 1961
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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
Date of hearing : 14.11.2024 Date of Pronouncement : 29.11.2024 O R D E R
Per Prashant Maharishi, Vice President
This appeal is filed by the ITO, Ward 1, Bellary (the assessee/appellant) for the assessment year 2013-14 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 26.05.2023 wherein the appeal filed by assessee against the assessment order dated 23.3.2016 passed u/s. 143(3) of the Income-tax Act, 1961 (the Act) by the ACIT, Circle 1, Bellary (ld. AO) was partly allowed. Therefore, the ld. AO is aggrieved and the only ground is that the ld. CIT(A) did not uphold the order of the ld. AO that in the year of receipt of unaccounted E-auction sale, the loss was allowed. Even otherwise, it was stated to be penal in nature.
The brief facts show that assessee is a private limited company which is engaged in the business of trading in iron ore and other, filed its return of income on 30.9.2013 at a total income of NIL. The assessment was Page 2 of 3 completed u/s. 143(3) of the Act determining total income of assessee at Rs.5,04,99,438 against which appeal was preferred and allowed. Therefore, the AO is in appeal.
At the time of hearing, it has been brought to our notice by letter dated 14.10.2024 that the impugned assessee is undergoing Insolvency proceedings under Insolvency and Bankruptcy Code, 2016 (IBC) wherein the order is passed on 04.9.2024 wherein Interim Resolution Professional (IRP), Mr. Hari Babu Thota having registered address at # 41/1, 2nd Floor, 11th Cross, 8th Main, 2nd Block, Jayanagar, Bengaluru – 560011 is appointed and further as per para 9, moratorium is declared in terms of section 14 of the IBC.
In view of the provisions of section 14 of the IBC, 2016, no suits can continue against the corporate debtor, M/s. Sai Krishna Minerals Pvt. Ltd.
Therefore, we dismiss the appeal of revenue with liberty granted to the revenue that as soon as moratorium period is over, if the ld. AO wishes to continue with this appeal, necessary application for recall of this order may be made, which shall be dealt with in accordance with law.