2023 (7) TMI 925 - AT - Income Tax

Recovery of income tax dues - Assesee Company under CIRP processings - Supremacy of IBC over all other Central and State statutes including Income-tax Act - HELD THAT - Hon ble Supreme Court in case of PCIT vs. Monnet Ispat and Energy Ltd. 2018 (8) TMI 1775 - SC ORDER held as 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. Thus 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. Keeping in view all these facts, ld. AR for the assessee stated at Bar that he does not press these appeals and same may be dismissed as withdrawn.

Summary

Issues involved:
The issues involved in the judgment are the overriding effect of section 238 of the Insolvency and Bankruptcy Code, 2016 on other statutes, specifically the Income-tax Act, and the appointment of an Insolvency Resolution Professional by the National Company Law Tribunal.

Overriding effect of section 238 of the Insolvency and Bankruptcy Code:
The judgment highlighted that section 238 of the Code prevails over all other Central and State statutes, including the Income-tax Act. This was supported by a reference to a case where the Hon'ble Supreme Court held that the Code will override anything inconsistent in any other enactment, including the Income-tax Act. It was emphasized that all claims, including those of the Income-tax Department, shall be entertained by the Official Liquidator under the Code. Consequently, the appeals were withdrawn by the assessee as section 238 of the Code had an overriding effect on the Income-tax Act, rendering the appeals infructuous.

Appointment of Insolvency Resolution Professional:
The judgment mentioned that the National Company Law Tribunal had appointed Shri Prabhakar Kumar as the Insolvency Resolution Professional under the provisions of the Insolvency and Bankruptcy Code, 2016. The assessee's counsel informed that due to this appointment, they were not pressing the appeals filed against the orders of the ld. CIT (A) for the respective assessment years. As a result, the appeals were dismissed as withdrawn by the assessee, considering the appointment of the Insolvency Resolution Professional.

In conclusion, the judgment focused on the overriding effect of section 238 of the Insolvency and Bankruptcy Code, 2016 on other statutes, particularly the Income-tax Act, and the impact of the appointment of an Insolvency Resolution Professional by the National Company Law Tribunal on the appeals filed by the assessee.