M/S. COSMIC FERRO ALLOYS LIMITED. ,KOLKATA vs. DCIT,CIR-3, KOLKATA, KOLKATA

Facts in brief are that the assessee company has defaulted in the payment of debts due to City Bank and consequent to which the City Bank had filed an application before NCLT , Kolkata to initiate the proceedings under Corporate Insolvency Resolution Process u/s 7 of Insolvency and Bankruptcy Code, 2016 and accordingly NCLT has passed an order on 16.01.2018 thereby all the existing statutory liabilities to various Govt Deptts. including income taxdept. have been extinguished . The issue has also been decided in assessee’s own case in ITA no. 2017/Kol/2019 on the basis of the same order of NCLT.

The grievance of assessee is that the Ld. CIT(A) has dismissed the appeal as infructuous instead of directing the AO to delete the additions and demand of income tax . In our opinion, once the order has been passed by NCLT under Insolvency and Bankruptcy Code, 2016 under Income Tax Act, all the statutory dues on account of income tax, Sales Tax,/VAT/GST, Excise Duty due to various Govt Departments of the Govt are extinguished. Therefore, we find merit in the appeals of the assessee that instead of dismissing the appeals as infructuous, the additions and the Ld. CIT(A) should have deleted the demand. Therefore, accepting the prayers of the assessee,we hereby set aside the order of Ld. CIT(A) and direct the AO to delete the demand raised by the assessee. Consequently all the appeals of the assessee were allowed.

In the result, all the appeals of the assessee are allowed.

Appellant- M/s Cosmic Ferro Alloys Ltd., C/o, Rajesh Mohan & Associates, Unit No. 18, 5th Floor, Bagati House, 34, Ganesh Chandra Avenue, Kolkata- 700013.

Respondent – DCIT, Circle-3(1), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)