ACIT-6(1)(2), MUMBAI, MUMBAI V. NIRJALA TELEHOLDINGS LIMITED, THANE

ITA 1557/MUM/2025

AI Insights

The case involves two appeals by the Revenue against Nirjala Teleholdings Limited concerning assessments for the years 2006-07 and 2007-08. The appeals were filed against orders from the National Faceless Appeal Centre (NFAC), Delhi. A significant development occurred when Nirjala Teleholdings Limited was admitted into the Corporate Insololvency Resolution Process (CIRP) by the National Company Law Tribunal (NCLT), Chennai, leading to an immediate moratorium under the Insolvency and Bankruptcy Code, 2016. This moratorium suspended all proceedings against the company, including the appeals filed by the Revenue. The Tribunal, acknowledging the moratorium, dismissed the appeals in limine but allowed for the possibility of restoration once the moratorium is lifted or specific leave is obtained under the IBC framework.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784583 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2025
• Laws Referred To: Income-tax Act, 1961, Insolvency and Bankruptcy Code, 2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VAIBHAV JAIN
• Keywords: Competent authority
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.1557/Mum/2025 & 1558/Mum/2025 (Assessment Year :2006-07 & 2007-08) ACIT- 6 (1)(2), Mumbai Vs. Nirjala Teleholdings Limited 202 United Business Park, Waghale Industrial Estate Maharashtra- 400 605 PAN/GIR No.AAACS4448K (Appellant) .. (Respondent) Assessee by None Revenue by Shri Vaibhav Jain, CIT DR Date of Hearing 10/11/2025 Date of Pronouncement 12/11/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): These two appeals have been preferred by the Revenue against separate impugned orders, both dated 10 December 2024, passed by the National Faceless Appeal Centre (NFAC), Delhi, pertaining to the assessments framed under section 143(3) of the Income-tax Act, 1961 for the assessment years 2006-07 and 2007-08. 2. At the threshold of hearing, the learned Departmental Representative drew our attention to the significant Printed from counselvise.com ITA No.1557 & 1558/Mum/2025 Nirjala Teleholdings Limited 2 development that the respondent-company, Nirjala Teleholdings Limited, has been admitted into the Corporate Insolvency Resolution Process (CIRP) under section 7 of the Insolvency and Bankruptcy Code, 2016, by an order of the Hon’ble National Company Law Tribunal (NCLT), Special Bench, Chennai, dated 13 April 2023. It was pointed out that, upon such admission, the moratorium contemplated under section 14(1) of the Code came into immediate effect, thereby suspending all proceedings against the corporate debtor, including those before judicial, quasi-judicial, or arbitral authorities. 3. We have carefully perused the said order of the NCLT. Paragraph 40 thereof makes it abundantly clear that the application of the financial creditor under section 7(5) of the Code has been admitted, and that the moratorium stipulated under section 14(1) has commenced from the very date of that order. The relevant portion of the NCLT’s direction reads as under: “Based on the above terms, the application stands admitted in terms of section 7(5) of the IBC, 2016 and the moratorium shall come into effect as of this date. A copy of the order shall be communicated to the Financial Creditor as well as to the Corporate Debtor by the Registry. In addition, a copy shall be forwarded to the Insolvency and Bankruptcy Board of India (IBBI) for its records and to the Interim Resolution Professional, who shall forthwith communicate the initiation of the CIRP in relation to the Corporate Debtor to the Registrar of Companies concerned.” Printed from counselvise.com ITA No.1557 & 1558/Mum/2025 Nirjala Teleholdings Limited 3 4. The legal consequence of the above direction leaves no room for ambiguity. Section 14(1) of the Insolvency and Bankruptcy Code, 2016 imposes a statutory embargo on the institution or continuation of all suits and proceedings against the corporate debtor. The moratorium expressly covers proceedings before any Court of law, Tribunal, arbitral panel, or other authority. It further restrains the execution of any judgment, decree, or order already passed, and bars any action to foreclose, recover, or enforce any security interest created by the corporate debtor. In view of the legislative command, the hands of this Tribunal are tied: it cannot, during the currency of the moratorium, entertain or proceed with any appeal in which the corporate debtor stands arrayed as a respondent. 5. It is further noted that, pursuant to the same order, an Interim Resolution Professional (IRP) has been appointed to take over the management of the corporate debtor and conduct the CIRP in accordance with law. Until the moratorium is lifted or appropriate permission is granted by the Committee of Creditors through the IRP recognising the claim of the Income-tax Department as an operational or financial creditor, no adjudicatory step can be validly undertaken in these proceedings. 6. In this backdrop, the present appeals of the Revenue cannot, at this stage, be heard or decided on merits. Respecting the statutory injunction contained in section 14 of the Code, we are constrained to keep the proceedings in abeyance. However, to safeguard the interests of the Revenue, Printed from counselvise.com ITA No.1557 & 1558/Mum/2025 Nirjala Teleholdings Limited 4 we clarify that this dismissal shall be in limine and without prejudice to the right of the Department to seek restoration of the appeals as and when the moratorium ceases to operate or specific leave is obtained from the competent authority under the IBC framework. Upon such restoration being sought, these appeals shall revive and be heard in accordance with law. 7. In the result, both the appeals filed by the Revenue stand dismissed in limine, with the liberty as aforesaid. Order pronounced on 12th November, 2025. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 12/11/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "