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TMI Blog2022 (5) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... tter to the file of Ld. AO for taking necessary action in accordance with the law, which on the same issue was similarly dealt by the Co-ordinate bench of ITAT Kolkata [ 2021 (10) TMI 1255 - ITAT KOLKATA] keeping in view the legal position emanating from the judicial pronouncements of Hon ble Supreme Court referred [ 2018 (8) TMI 1775 - SC ORDER] under the similar set of facts and law. Accordingly, appeal of the assessee is allowed for statistical purpose. - ITA No.2017/Kol/2019 - - - Dated:- 9-5-2022 - Shri Rajpal Yadav, Vice President (KZ) And Shri Girish Agrawal, Accountant Member For the Appellant : Shri Sunil Surana, FCA, Ld. AR For the Respondent : Shri Divakar Chakraborty Addl. CIT, Ld. Sr. DR ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal by the assessee is arising out of the order passed by the Commissioner of Income-tax(Appeals)-16, Kolkata in Appeal No.1105/CIT(A)- 16/Kol/2017-18/C-3(1), Kol dated 28.06.2019 against the assessment order passed by the Assessing Officer, DCIT, Circle-1(2), Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 22.02.2016 for the assessment year 2013-14. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Applicant Consortium of United Tradeco FZC and QVC Exports Pvt. Ltd., submitted to the Resolution Professional and duly approved by NCLT as binding on the Corporate Debtor i.e. the assessee company. iii. Copy of decision by the Co-ordinate bench of ITAT Kolkata in the case of Palogix Infrastructure (P.) Ltd. v. ACIT [2022] 135 taxmann.com 73 (Kol Trib) dated 27.10.2021 dealing with the effect of order of NCLT passed u/s 31 of the Code on the appeal pending before the ITAT of a Corporate Debtor relating to the period prior to approval of resolution plan by NCLT. 5.1 Ld. Counsel apprised the bench that assessee was in default with banks and was taken before Hon ble NCLT, Kolkata Bench under the Code for which the resolution plan of the resolution applicant was approved by the Committee of Creditors (in short CoC) and Hon ble NCLT vide order dated 11.10.2018. Both, the resolution plan of the resolution applicant and the order of Hon ble NCLT, Kolkata Bench are placed on record. He submitted to take note of vital fact relating to the instant appeal that it is for assessment year 2013-14 relating to previous year 2012- 13 which is prior to the date of approval of resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes, duty, penalties. Interest fines, cesses, etc. shall stand extinguished by virtue of the order of the NCLT dated 11.10.2018 and all proceedings including the appellate proceedings pending on the date of the order of the NCLT including the present proceedings relating to the prior period to the date of order shall stand extinguished and all consequential liabilities, if any, should be deleted and should be considered to be not payable by the Company. He thus submitted that in the light of the order of Hon ble NCLT, Kolkata, dated 11.10.2018 passed in assessee's case, it will be appropriate to restore the case to the Ld. AO for taking necessary action in accordance with law. 5.4 To buttress his contentions, Ld. Counsel placed on record the recent decision of the Co-ordinate bench of ITAT Kolkata in the case of Palogix Infrastructure (P.) Ltd. ( supra ) which has dealt with the identical issue after keeping in view the legal position emanating from the judicial pronouncements of the Hon ble Supreme Court in the case of i. Pr. CIT v. Monnet Ispat Energy Ltd. [Petition for SLP to Appeal (C) No. 6483 of 2018, dated 10.08.2018] ii. Swiss Ribbons (P.) Ltd. v. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on process costs, It appears to be somewhat at higher side because provision of amount of Rs. 12.20 crores is made to incur resolution costs, which includes fees of resolution professional amounting to Rs. 6.33 crores (page 29). However, since it is approved by the CoC and this authority has no reason to doubt wisdom of CoC, I hold that the provisions of section 30(2)(a) of I B Code is complied with. The plan also provides that repayment of debts of operational creditor (page 33). In para 2(e) of the plan at page 63 states the modalities suggested for management of the affairs of the Corporate Debtor and it also provides mechanism for effective supervision and implementation of the plan. In view of this, I hold that the provisions of section 30(2)(b) and 30(2)(c) of I B Code are complied with. One, Mr. Nitesh Kumar sworn an affidavit on behalf of the resolution applicant stating that the resolution applicant, Consortium of United Tradeco FZC and OVC Exports Pvt. Limited does not suffer from any disqualification as stated under section 29A of the I B Code. The plan does not contravene any provisions of law and the same is in conformity with the provisions of I B code. Resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being in the nature of crown debts, do not take precedence over secured creditors, who are private persons. 9. In the case of Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365, Hon'ble Supreme Court held that the core objective of the Code is to readapt the corporate debtor monetarily and for that purpose to protect the corporate debtor's assets from further dilution. But to fully accomplish the said purpose, the creditors must be barred from bringing up belated claims against a successful resolution applicant striving to resurrect the corporate debtor. Elaborating further, their Lordships observed that if the Government Departments are just going to bring up their claims after the company is transferred over to a successful resolution applicant, then intent with which the Code was incorporated will never be achieved. 10. In the case of Ghanashyam Mishra Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237, it was held y the Hon'ble Supreme Court that a bare reading of section 31(1) of the Code is enough to establish that once the resolution plan receives the assent of adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be proceeded against. Post the order of the adjudicating authority, no reassessment/revision or any other proceedings under the provisions of the Income-tax Act should be initiated on the company in relation to period prior to acquisition of control by the resolution applicant over the Company pursuant to this plan shall stand extinguished by virtue of order of the National Company Law Tribunal and the assessee-company should not be liable to pay against such demand. 12. Since the present appeal involving AY 2010-11 relates to the period prior to the acquisition of control by the Resolution Applicant over the company pursuant to this plan, all dues under the provisions of the Income-tax Act 1961 including taxes, duty, penalties. Interest fines, cesses, etc. shall stand extinguished by virtue of the order of the National Company Law Tribunal and all proceedings including the appellate proceedings pending on the date of the order of the National Company Law Tribunal including the present proceedings relating to the prior period to the date of order shall stand extinguished and all consequential liabilities, if any, should be deleted and should be considered to be not paya ..... X X X X Extracts X X X X X X X X Extracts X X X X
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