9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 663 - AT - Income TaxParallel proceedings under Income-tax Act 1961 and IBC 2016 - liquidation proceeding has commenced - IBC Code overriding anything inconsistent contained in any other enactment including the Act - liquidation proceedings had commenced as per the order of NCLT - HELD THAT - As per the stated order of NCLT Kolkata in the case of the assessee by appointing the Official Liquidator. We are aware that from the time of appointment of Official Liquidator the assessee company became defunct and the Official Liquidator stepped into the shoes of the assessee. In the present case it is seen that the Official liquidator has not appeared before us so far to present the case of the assessee. Pertinently it is to be observed that in case of parallel proceedings under Income-tax Act 1961 and IBC 2016 the IBC has an overriding effect over the provisions of the Income-tax Act which has been decided by Hon ble Apex Court in Principal Commissioner of Income-tax Vs Monnet Ispat Energy Ltd 2018 (8) TMI 1775 - SC ORDER wherein had observed that as per section 238 of IBC the IBC Code will override anything inconsistent contained in any other enactment including the Income-tax Act. Similar issue was dealt by the Coordinate Bench of Mumbai ITAT in the case of Pratibha Industries Ltd. 2022 (6) TMI 1362 - ITAT MUMBAI appeals filed by the Revenue and the assessee were dismissed with the liberty to recall the matter on application made for the same within the permissible limitation. We dismiss the appeal by the assessee with the liberty to the assessee/liquidator to file the application for recall this order as and when the occasion warrants. The issue of limitation in filing fresh appeal if need be will be governed by the decision of Hon ble Supreme Court in the case of New Delhi Municipal Counsel 2022 (5) TMI 1123 - SUPREME COURT Appeal of the assessee is dismissed.
Issues Involved:
1. Dismissal of the appeal by the Ld. CIT(A) on technical grounds without adjudicating on the merits. 2. Commencement of liquidation proceedings and the impact on the appellate proceedings. 3. Overriding effect of the Insolvency and Bankruptcy Code (IBC) over the Income-tax Act, 1961. 4. Application of section 178 of the Income-tax Act in the context of liquidation under IBC. 5. Dismissal of cross appeals by the Revenue and Assessee with liberty to recall the order. Detailed Analysis: 1. Dismissal of the Appeal by the Ld. CIT(A) on Technical Grounds: The appeal was filed by the assessee challenging the order of the Ld. CIT(A)-22, Kolkata, which dismissed the appeal in limine on technical grounds without adjudicating on the merits. The assessee sought the restoration of the matter to be decided de novo in terms of the Income-tax Act, 1961. 2. Commencement of Liquidation Proceedings: During the appellate proceedings, it was noted that the assessee company was undergoing liquidation as per the order dated 11.01.2018 passed by the National Company Law Tribunal (NCLT), Kolkata Bench. Mr. Sumit Binani was appointed as the liquidator. The liquidator requested to keep the appellate proceedings in abeyance, citing section 33(5) of the IBC, which states that no suits or other legal proceedings shall be initiated against the corporate debtor once a liquidation order has been passed. 3. Overriding Effect of the IBC Over the Income-tax Act: The judgment highlighted that in cases of parallel proceedings under the Income-tax Act, 1961, and the IBC, 2016, the IBC has an overriding effect. This principle was affirmed by the Hon'ble Apex Court in Principal Commissioner of Income-tax Vs Monnet Ispat & Energy Ltd. [2019] 107 taxmann.com 481, where it was observed that as per section 238 of the IBC, the IBC Code will override anything inconsistent contained in any other enactment, including the Income-tax Act. 4. Application of Section 178 of the Income-tax Act: Section 178 of the Income-tax Act, which deals with the obligations of the liquidator, has been amended to prevent any conflict with the provisions of the IBC. The section mandates that the liquidator must notify the Income-tax Officer of their appointment and set aside an amount for tax liabilities. However, the provisions of section 178 are subject to the overriding effect of the IBC. 5. Dismissal of Cross Appeals: The Tribunal dismissed the cross appeals filed by the Revenue and the Assessee, granting liberty to the appellants or the Official Liquidator to recall the present order if necessary. The issue of limitation in filing a fresh appeal will be governed by the decision of the Hon'ble Supreme Court in New Delhi Municipal Corporation vs Minosha India Ltd. [2022] 138 taxmann.com 73. Conclusion: The appeal filed by the assessee was dismissed due to the commencement of liquidation proceedings under the IBC, which has an overriding effect over the Income-tax Act. The Tribunal provided the liberty to recall the order if the occasion warrants, with the issue of limitation in filing fresh appeals being governed by the relevant Supreme Court judgment.
|
