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Facts
The Assessee filed appeals against orders for AY 2014-15 to 2016-17. During the hearing, it was submitted that Corporate Insolvency Resolution Process (CIRP) was initiated against the assessee under the Insolvency and Bankruptcy Code, 2016 (IBC).
Held
The Tribunal noted that Section 238 of the IBC has an overriding effect over other statutes, including the Income Tax Act, as held by the Supreme Court. Consequently, the appeals filed by both the Assessee and the Revenue were rendered infructuous.
Key Issues
Whether the provisions of the Insolvency and Bankruptcy Code, 2016, specifically Section 238, override the provisions of the Income Tax Act in cases where CIRP has been initiated against the assessee.
Sections Cited
7, 53(1), 238
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘E’, NEW DELHI
Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL
DCIT, CC-13, NEW DELHI Vs. MAHAGUN (INDIA) PVT. LTD., B-66, 1ST FLOOR, VIVEK VIHAR, DELHI-110095 (PAN: AAACM6572A) (Appellant) (Respondent) Assessee by Ms. Monalisa Maity, Adv. Department by Sh. Sanjay Kumar, CIT(DR) Date of hearing: 15/09/2025 Date of Pronouncement: 15/09/2025 ORDER PER BENCH: The 2882/Del/2023 & 2883/Del/2023 have been filed by the Assessee against the respective orders of the Ld. CIT(A)-28, 1 New Delhi relevant to assessment years 2014-15, 2015-16 & 2016-17 respectively and & 3036/DEL/2023 have been filed by the Revenue relevant to assessment years 2015-16 & 2016-17 respectively.
At the time of hearing, Ld. AR has submitted that Corporate Insolvency Resolution Process (CIPR) has been initiated against the assessee, vide Order under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) issued by the National Company Law Tribunal (NCLT), New Delhi Bench, Court-III (Special Court) in IB-112(ND)/2025 dated 05.08.2025, titled IDBI Trusteeship Services Limited vs. Mahagun (India) Private Limited.
Ld. DR did not controvert the aforesaid proposition.
We have heard both the parties and perused the records. We find that provisions contained under section 238 of “the Code” are having an overriding effect over all other Central and State statutes including Income Tax Act as held by Hon’ble Supreme Court in case of PCIT vs. Monnet Ispat and Energy Ltd. SLP (C) No. 6483 of 2018 Order dated 10.8.2018 by returning following findings:- “Given section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income Tax Act.”
In this view of the matter, Section 238 of the Code will have overriding effect over all other Central and State statutes including the Income Tax Act and all the claims including claim of the Income Tax Department under the Income Tax Act, 1961 shall be entertained by the Official Liquidator u/s. 53(1) of the Code. In the background of the aforesaid factual matrix, the captioned Appeals filed by the Assessee as well as Revenue have become infructuous and dismissed as such. However, the Assessee as well as Revenue both are at liberty to approach the Tribunal for reinstitution of their respective appeals and the Tribunal shall consider such applications appropriately, as per law.