2021 (9) TMI 523 - AT - Insolvency and Bankruptcy

Maintainability of appeal - appeals are filed by Directors of this company - continuation of proceedings of suits against the company when insolvency resolution is in process - HELD THAT - The movement an order is passed referring the assessee for resolution u/s seven of the IBC 2016, the administration of the company rest with the insurance resolution professional. In this case, these appeals are filed by the directors of the company therefore, they are not maintainable. Therefore, these appeals should have been preferred by the insolvency resolution professional under the instruction of committee of the creditors and the directors do not have any locus standi. The adjournment application of the assessee is rejected - appeals are dismissed as not maintainable with a liberty to the IRP that if he wants to prefer these appeals, he may file the fresh appeals or makes an application for restoration of these appeals with the approval of committee of creditors. The third appeal is filed by the learned assessing officer, according to the provisions of Section 14 of IBC 2016, no proceedings of suits against the company can continue until the insolvency resolution process is complete. Therefore, the appeal filed by the learned AO is also deserves to be dismissed with a liberty to the AO that he may file an application for recall of this order after the moratorium period is over. Appeal dismissed.

Summary

Issues:
1. Maintainability of appeals filed by Directors of the company during liquidation.
2. Applicability of Section 14 of IBC 2016 on proceedings against the company during insolvency resolution process.

Analysis:
1. The judgment dealt with three appeals filed by HBN Dairies and Allied Ltd for Assessment Years 2012-13, 2013-14, and 2014-15. The first two appeals were filed by the Directors of the company, while the third appeal was filed by the Deputy Commissioner of Income tax. The Directors sought an adjournment due to the company being under liquidation, but the Revenue argued that the appeals should have been filed by the insolvency resolution professional. The Tribunal found that as per the order of the NCLT admitting the petition under section 7 of the IBC 2016, the appeals should have been preferred by the insolvency resolution professional on behalf of the company. Consequently, the Tribunal rejected the adjournment application and dismissed the appeals filed by the Directors, granting liberty to the insolvency resolution professional to file fresh appeals or seek restoration with the approval of the committee of creditors.

2. Regarding the appeal filed by the assessing officer, the Tribunal considered the provisions of Section 14 of the IBC 2016, which stipulate that no proceedings or suits against the company can continue during the insolvency resolution process. Consequently, the appeal filed by the assessing officer was also deemed to be dismissed, with the assessing officer granted liberty to file an application for recall of the order after the moratorium period ends. Ultimately, all three appeals were dismissed by the Tribunal in light of the above considerations.

This judgment underscores the importance of adherence to procedural requirements during insolvency proceedings, emphasizing the role of the insolvency resolution professional in representing the company's interests and the implications of the moratorium period under the IBC 2016.