MARUTI KOATSU CYLINDER LIMITED,HALOL, PANCHMAHAL vs. DY.CIT., CIRCLE-2(1)(2), BARODA

This is an appeal filed against the order dated 20-06- 2023 passed by National Faceless Appeal Centre (NFAC) Delhi for assessment year 2013-14.

The grounds of appeal are as under:- “1.1 The order passed u/s. 250 on 20.06.2023 for A.Y.2013-14 by NFAC CIT(A) Delhi (for short 'NFAC') upholding the validity of order of assessment passed u/s 143(3) on 21.03.2016 by AO and the disallowances aggregating to Rs.1,35,50,070/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. NFAC has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned disallowances. 2.1 The Ld. NFAC has grievously erred in law and on facts in confirming the following disallowances:- (a) Disallowance of bad debts Rs.85,17,386/- (b) Disallowance u/s 40(a)(ia) Rs.50,14,182/- (c) Disallowance u/s 43B Rs. 18,502/- 2.2 That in the facts and circumstances of the case as well as in law, the Ld. NBFC ought not to have upheld the above said disallowances. 3.1 The Ld. NBFC has erred in law and or on facts in upholding the validity of order of assessment passed u/s 143(3) on 21.03.2016 though NCLT had approved resolution plan. It is, therefore, prayed that the disallowances of Rs.13,55,0070/- upheld by the NFAC may kindly be deleted.”

Being aggrieved by the assessment order, the assessee filed appeal before the NFAC(CIT(A)). The CIT(A) dismissed the appeal of the assessee.

The ld. Authorized Representative submitted that the Hon’ble NCLT has approved the resolution plan vide order dated 22-10-2019. The CIT(A) was very much aware about the said resolution plan where the NCLT has not specifically dealt with the dues relating to taxes in para 12 and stated that the same was stand extinguished by virtue of the order of the adjudicating authority i.e. NCLT. Thus, the CIT(A) should have taken the same into account.

The ld. Departmental Representative relied upon the assessment order and the order of the CIT(A).

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee company has adopted a resolution plan and the Hon’ble NCLT has vide order dated 22- 10-2019 has given the directions thereby passing the resolution plan under the Indian Bankruptcy Code 2016. Since the NCLT has approved the application filed u/s. 13(6) of the IBC 2016, the CIT(A) was not justified to confirm the addition/disallowance made by the Assessing Officer. As all the claims of the government including that particular income tax department stands extinguished as per section 13(6) of IBC, 2016. Hence, the CIT(A) is not justified in confirming the addition/disallowance. Thus, the appeal of the assessee becomes infructuous as the claim of the revenue extinguish as per Hon’ble NCLT order dated 22-10-2019.

In the result, the appeal of the assessee is dismissed as infructuous. Order pronounced in the open court on 18-09-2024 Sd/- Sd/- (NARENDRA PRASAD SINHA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 18/09/2024 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,