AIRCEL LIMITED,CHENNAI vs. DCIT, CORPORATE CIRCLE-1(1), , CHENNAI

These 11 appeals are filed against the orders bearing DIN & Order No.ITBA/NFAC/S/250/2022-23/1050206382(1), dated 28.02.2023 for A.Y-2011-12, No.ITBA/NFAC/S/250/2022-23/1050016706(1) dated 22.02.2023 for the A.Y-2009-10, No.ITBA/NFAC/S/250/2022- , 860, 861, 862, 863, 864, 865, 866, 870, 871 & 872/Chny/2024 :- 2 -:

23/1050205124(1) dated 28.02.2023 for the A.Y-2010-11, No.ITBA/NFAC/S/250/2022-23/1050206515(1) dated 28.02.2023 for the A.Y-2013-14, No.ITBA/NFAC/S/250/2022-23/1050206017(1) dated 28.02.2023 for the A.Y-2016-17, No.ITBA/NFAC/S/250/2022- 23/1050205809(1) dated 28.02.2023 for the A.Y-2017-18, No.ITBA/NFAC/S/250/2022-23/1050206189(1) dated 28.02.2023 for the A.Y-2017-18, No.ITBA/NFAC/S/250/2022-23/1050205918(1) dated 28.02.2023 for the A.Y-2018-19, No.ITBA/NFAC/S/250/2022- 23/1050205012(1) dated 28.02.2023 for the A.Y-2008-09, No.ITBA/NFAC/S/250/2022-23/1050205582(1) dated 28.02.2023 for the A.Y-2012-13, No.ITBA/NFAC/S/250/2022-23/1050205428(1) dated 28.02.2023 for the A.Y-2012-13, of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi.

Through the aforesaid appeals the assessee has challenged the orders u/s 250 passed by NFAC, Delhi.

2.0 Through the preferred adjudication orders, the first appellate authority had dismissed the appeal of the assesse on the premise that a moratorium was existing in all the above appeals on account of initiation of insolvency resolution proceedings.

3.0 As a common issue involved concerning orders of the Hon’ble National Company Law Tribunal, Mumbai Bench dated 09.06.2020 exists , 860, 861, 862, 863, 864, 865, 866, 870, 871 & 872/Chny/2024 :- 3 -: in all the aforesaid appeals, the same are adjudicated with this common order.

4.0 In all the appeals, the appellant has raised twin set of grounds of appeal firstly that no-demand / proceedings pertaining to pre-CIRP periods survive after the passage of order of Hon’ble National Company Law Tribunal, Mumbai Bench dated 09.06.2020 and secondly on the merits of the case.

5.0 At the outset the Ld.AR of the assesse invited our attention to para-9.1.16 of the impugned order of Hon’ble NCLT mandating as under:

Clause Dispensation Orders thereon 9.1.16 From the Approval date, all inquiries, Granted, subject to the investigations and proceedings, suits, condition that these claims, disputes, proceedings in shall pertain to any connection with the Corporate Debtor inquiries, investigations, or affairs of the corporate Debtor, proceedings, suits, pending or threatened, present or claims, disputes, etc. future in relation to any period prior to Only in relation to the the Approval Date, or arising on period prior to the account of implementation of this Approval Date and not Resolution Plan shall stand thereafter. withdrawn and dismissed and all liabilities and obligations therefore, From the approval date, whether or not set out in the balance the corporate applicants sheets of the Corporate Debtor or the now controlled by the profit and loss account statements of RA shall be responsible the Corporate Debtor will be deemed for their own destinies to have been written off fully, and arising out of non- permanently extinguished and no compliance for the adverse orders passed in the said period after such matters should apply to the Corporate approval. Debtor or the Resolution Applicant. Upon approval of this Resolution , 860, 861, 862, 863, 864, 865, 866, 870, 871 & 872/Chny/2024 :- 4 -:

Plan, all new inquiries, investigations, notices, suits, claims, disputes, litigations, arbitrations or other judicial, regulatory or administrative proceedings will be deemed to be barred and will not be initiated or admitted against the Corporate Debtor in relation to any period prior to the Effective Date.

6.0 Reliance was also placed on Para 9.1.17 and 9.1.18 of the order referred Supra. The Ld.AR also invited our attention to section 156A which authorizes the AO to modify the demand order issued under Section 156 in conformity with the order of the adjudicating authority, reducing the demand of tax, interest, penalty, fine, or any other sum.

7.0 The Ld.DR did not contest the arguments of the Ld.

AR and agreed for action to be taken by the AO as prescribed in the section 156A.

8.0 We have heard the rival submission and examined the matter in the light of facts of the case and evidence placed on record. It is noted that the finance bill-2022 introduced section 156A which provides as under:

Modification and revision of notice in certain cases. “..156A.(1) Where any tax, interest, penalty, fine or any other sum in respect of which a notice of demand has been issued under , 860, 861, 862, 863, 864, 865, 866, 870, 871 & 872/Chny/2024 :- 5 -: section 156, is reduced as a result of an order of the Adjudicating Authority as defined in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Assessing Officer shall modify the demand payable in conformity with such order and shall thereafter serve on the assesse a notice of demand specifying the sum payable, if any, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall accordingly, apply in relation to such notice. (2) Where the order referred to in sub-section (1) is modified by the National Company Law Appellate Tribunal or the Supreme Court, as the case may be, the modified notice of demand as referred to in sub-section (1), issued by the Assessing Officer shall be revised accordingly.”.

The statutory provision of section 156A effective from 1st April, 9.0 2022.thus provides that where any tax, interest, penalty, fine or any other sum in respect of which a notice of demand has been issued under section 156, is reduced as a result of an order of an Adjudicating Authority as defined in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016, the Assessing Officer shall modify the demand payable in conformity with such order and shall thereafter serve on the assesse a notice of demand specifying the sum payable, if any, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. The amended law further provides that where the order referred to in sub-section (1) is modified by the National Company Law Appellate Tribunal or the Supreme Court, as the case may be, the modified notice of demand as referred to in sub-section (1), issued by the Assessing Officer shall be revised accordingly. Accordingly, we direct the assessing officer to take necessary action under section 156A of the Act. Since the grounds of appeal No.1 raised by the assesse on the technical grounds are allowed, the alternative grounds concerning merits of the case have not been found to be deserving any separate adjudication.

, 860, 861, 862, 863, 864, 865, 866, 870, 871 & 872/Chny/2024 :- 6 -:

10.0 In the result all the appeals are allowed. Order pronounced on 10th July, 2024 at Chennai.