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Income Tax Appellate Tribunal, DELHI BENCH “G” DELHI
Before: SHRI CHANDRA MOHAN GARG & SHRI PRADIP KUMAR KEDIA
The captioned appeal has been filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-IX, New Delhi (‘CIT(A)’ in short) dated 10.12.2018 arising from the assessment order dated 07.12.2017 passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2015-16.
When the matter was called for hearing, the Resolution Professional (RP) appearing on behalf of the assessee pointed out that the assessee has been subjected to proceedings under Insolvency and Bankruptcy Code, 2016 (IBC) and Corporate Insolvency Resolution Process (CIRP) has been initiated against the assessee by the operational creditors. It was pointed out that in terms of order dated 13.12.2021 delivered by National Company Law Tribunal, New Delhi Bench (NCLT) a moratorium has been declared in the case of the assessee with reference to provisions of Section 14 of the Insolvency Code. The ld. RP appearing for the assessee also pointed out as a necessary consequence of the declaration of moratorium in terms of Section 14 of the Code, several prohibitions have been imposed which inter alia includes continuation of pending suits or proceedings against the assessee including execution of any judgment, decree or order by any Court of Law, Tribunal, Arbitration Penal or Authority. The ld. RP thus submitted that in view of prohibitions imposed by the NCLT order which has the overriding effect on the Tribunal, the present proceedings by the Revenue against the assessee cannot continue during the moratorium period.
The Ld. Sr.DR on its part submitted that the present appeal in narrated circumstances cannot be pursued in view of the overriding provisions of insolvency code but however, prayed for liberty to revive the captioned appeal as and when the moratorium period is over or revival of company takes place.
In the light of statutory provision and in the light of decision of the Hon'ble Supreme Court in the case of Pr. CIT Vs. Monnet Ispat and Energy Limited (2019) 107 taxmann.com 481 and also in the light of the overriding provision of the code, the assessee is estopped to pursue the captioned appeal.
Thus, in view of the moratorium declared by NCLT, all proceedings in the court of law, Tribunal etc. cannot continue in view of the overriding provisions of Insolvency & Bankruptcy Code as recognized in Section 178(6) of the Act. That being the position, no useful purpose is going to be served in continuing the present proceedings. Therefore, this appeal needs to be consigned to the records.
For such reasons, the appeal of the Revenue is dismissed with a liberty to the Revenue to seek remedial measures in accordance with law as and when the moratorium period is over or order of the NCLT is modified or revival of the assessee company takes place or where it is otherwise necessary to do so in the interest of the parties.
In the result, the appeal of the Revenue is dismissed in limine for statistical purposes. Order pronounced in the open Court on 23.05.2023.