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TMI Blog2023 (9) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... prayers on jurisdictional grounds. Rightful claimant of the tax refund - HELD THAT:- The Adjudicating Authority has only spelt the need on its part to exercise abundant care and caution so as not to interpret the core assessment provisions of the Income Tax Act - the modicum of restraint exercised by the Adjudicating Authority in not getting into computational aspects of income tax assessment or applying the assessment related provisions of the Income Tax Act is appreciated and instead confining itself to the facts and circumstances on record to arrive at a conclusion as whether the Appellant or the Corporate Debtor was the rightful recipient of the tax refund. Hence, the contention of the Appellant that the Adjudicating Authority had raised the issue of lack of jurisdiction is devoid of merit and misconceived and therefore not acceptable. CLCI had addressed a series of communications to the IT Dept through their authorized representative on 09.07.2019, 06.08.2019, 16.09.2019, 13.11.2019, 19.11.2019, 21.11.2019 wherein the Department was requested to give effect to the order of ITAT and issue income tax refund to them. These letters barring that of 09.07.2019 categorically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Appellant. 2. The brief facts to be noted for deciding this appeal are as follows: Chiranjee Lal Sons, a partnership firm was taken over by the present Appellant - CLC Sons Pvt. Ltd. ( CLCS in short) on 01.04.2000. Based on a scheme of arrangement sanctioned by Hon ble Delhi High Court, the Textiles Division of CLCS was de-merged as M/s Apro Biochem Engineering Ltd. ( Apro in short) with appointed date as 01.04.2001. On 18.07.2002 name of Apro was changed to CLC Global Ltd. ( CLCG in short). On 23.11.2005, CLCG merged with M/s Spentex Industries Ltd. On 19.07.2018, the name of Spentex Industries Ltd., was changed to CLC Industries Ltd. ( CLCI in short) For the 2001-2002 Assessment Year ( AY in short), the Income Tax Department ( IT Dept in short) had raised a demand against which assessment order an appeal was filed before ITAT leading to a refund being allowed on 28.05.2019. CLCI-Corporate Debtor claiming the income tax refund sent several communications to the IT Dept to remit the tax refund in their bank account. CLCI got admitted to insolvency proceedings on 03.01.2020 and Resolution Professional ( RP in short) was appointed. CLCS addres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly due and payable to them. It has been strongly contended that the RP of the Corporate Debtor ought to have refunded the amount and by withholding the same, it has led to the unjust and wrongful enrichment of CLCI-Corporate Debtor. 5. Submission was also made that the assessment order was in the name of CLCS. It was also claimed that the refunds arise out of tax challans which were in the name of CLCS. It was also CLCS which had pursued the matter before the ITAT since the refund amount belonged to them. It has also been submitted that the IT Department in their letter dated 21.01.2021 had noted that the refund which had been credited to CLCI in their bank account maintained with RBL Respondent No.3 belonged to CLCS. The income tax refund which legitimately belonged to CLCS could not have been claimed by CLCI being a separate assessee. 6. Making counter submissions, it is the contention of the Learned Counsel for the Respondent No.4 that CLCI had been consistently pursuing with the IT Dept claiming the income tax refund all along during the period prior to the commencement of CIRP. It was on account of their persuasive efforts that the amount of tax refund got credited to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank on 21.01.2021 also specifically stated that the refund amount had been wrongly credited into the account of CLCI maintained with RBL-Respondent No.3 and that the refund amount actually belonged to CLCS. It was further added that even while claiming the refund, CLCI never claimed that the refund amount belonged to them but sought the refund amount to help the company in managing its operations. The Learned Counsel for the Appellant strenuously contended that they were aggrieved by the fact that the Adjudicating Authority while, on the one hand, held that it does not have jurisdiction to decide on such matters and yet, on the other hand, held that there was nothing wrongful in the refund being remitted to CLCI-Corporate Debtor. 10. The first issue which requires our consideration, therefore, is the tenability of the contention raised by the Appellant in assailing the impugned order that the Adjudicating Authority while taking a view that it did not have jurisdiction yet went ahead and decided the matter on merits. 11. For a proper appreciation of this issue raised before us, we may first glance at the issues which came up for consideration in WP No. 3764/2021 filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deposit of tax demand has also not been considered on the ground of lack of jurisdiction. We are of the considered view that prayers (b) and (c) not having been raised before the Hon ble Delhi High Court and not having been allowed as such to agitate these prayers, these should not have been raised before the Adjudicating Authority. Moreover, issues concerning payment of interest on tax refund and extension of time to pay tax are matters which intrinsically relate to conduct of assessment proceedings. Such an exercise squarely falls within the competent jurisdiction of the income tax assessing authority and cannot be arrogated by the Adjudicating Authority. We, therefore, do not find any error on the part of the Adjudicating Authority in refusing to look into the prayers set out at items (b) and (c) on jurisdictional grounds. 14. This brings us to the prayer contained at item (a) before the Adjudicating Authority. This prayer was for determination on the rightful claimant of the tax refund which was the singular issue raised before the Hon ble Delhi High Court. We notice that the Adjudicating Authority has looked into this issue and deliberated upon it at length. Before anal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would amount to sitting in appeal over the Scheme of Arrangement passed by the Hon ble Delhi High Court. 17. The impugned order also correctly takes notice of the de-merger of the textile unit of CLCS and the coming into existence of CLCI with the merger of CLCG and Spentex on 23.11.2005. It has also noted that the IT Department had issued an assessment order on 26.03.2004 with respect to AY 2001-2002 and that the tax payable was paid by CLCG and CLCS. It has also noted that aggrieved by the tax assessment order, an appeal had been filed by CLCS before the ITAT which allowed the claim for deduction towards depreciation on goodwill which resulted into a refund. At the same time, it has noted that the Corporate Debtor - CLCI as well as the tax consultant had sent several letters to the IT Dept between 06.08.2019 to 21.11.2019 seeking refund and that these letters were never withdrawn. The impugned order has also noted that there is lack of clarity on whether the refund was claimed on the strength of application filed by CLCS under VSV scheme on 02.06.2020 or on the basis of letters written by CLCI between 09.07.2019 to 21.11.2019. 18. After taking cognizance of the above facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of communications to the IT Dept through their authorized representative on 09.07.2019, 06.08.2019, 16.09.2019, 13.11.2019, 19.11.2019, 21.11.2019 wherein the Department was requested to give effect to the order of ITAT and issue income tax refund to them. These letters barring that of 09.07.2019 categorically state that the refund amount payable to CLCS belongs to CLCI. It is also noteworthy that in these communications sent by CLCI to the IT Dept, it was explained at length that CLCS was de-merged and all the assets and liabilities of CLCS as on the date of de-merger had been transferred to Apro. These communications also go on to explain how Apro changed its name to CLCG and following amalgamation with Spentex, the name changed to CLCI. It was also highlighted to the IT Dept that since CLCI was under liquidity crunch and facing difficulty in managing cash flows for its operations, the refund should be credited to CLCI at the earliest. It is pertinent to note that all these communications are subject-captioned: Letter to the assessing officer to give appeal effect in case of M/s CLC Sons Pvt. (PAN: AABCC7980K) (Now acquired by M/s CLC Industries Ltd. PAN: AABCS4997E) for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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