ASSISTANT COMMISSIONER OF INCOME TAX , CHENNAI V. EVOCON PVT LTD, CHENNAI

ITA 1634/CHNY/2024

AI Insights

The case involves an appeal by the revenue against the order of the ld.CIT(A) which deleted the additions made by the AO towards cash deposits during the demonetization period. The AO had made an addition of Rs.20,76,65,208 as unaccounted income under Section 69A of the Income Tax Act, 1961, during the moratorium period declared by the NCLT. The ld.CIT(A) annulled the AO's order citing the moratorium under the IBC, 2016, and the Tribunal upheld this decision, referencing various Supreme Court and High Court judgments that supported the clean slate theory under the IBC.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107917 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Murali Industries Vs ACIT, Dishnet Wireless Limited Vs ACIT
• Laws Referred To: Income Tax Act, 1961, Insolvency and Bankruptcy Code, 2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAY BARAN SOM
• Assessee Lawyers: S. SATHIYANARAYANAN
• Keywords: Set aside; Liquidation
• Section: 147; 250; 69A; 10; 20

Judgement Text

"आयकर अपीलीय अिधकरण,‘ ए’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी एस एस िव᳡नेᮢ रिव, ᭠याियक सद᭭य एवं ᮰ी एस. आर.रघुनाथा, लेखा सद᭭य के समᭃ BEFORE SHRI S.S. VISWANETHRA RAVI, HON’BLE JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, HON’BLE ACCOUNTANT MEMBER आयकर अपीलसं/.ITA No.: 1634/Chny/2024 िनधाᭅरण वषᭅ / Assessment Year: 2017-18 The Assistant Commissioner of Income Tax, Central Circle -2(2), Investigation Building, Chennai – 600 034. v. M/s. EVOCON Pvt Ltd S Diraviam, No.23, Anaar Flats, 3rd Floor, EB Office Road, Mogappair East, Tamil Nadu – 600 037. [PAN:AACCE-9530-C] (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Nilay Baran Som, CIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri S. Sathiyanarayanan, Advocate सुनवाई की तारीख/Date of Hearing : 12.12.2024 घोषणा की तारीख/Date of Pronouncement : 30.01.2025 आदेश/ O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: This appeal filed by the revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals), Chennai-19, dated 02.04.2024 and pertains to assessment year 2017-18. :-2-: ITA. No: 1634/Chny/2024 2. The revenue has filed the following grounds of appeal: 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The Ld.CIT(A) erred in deleting the addition of 20,76,65,208/- made towards cash deposits during demonetization on technical grounds and not adjudicating the facts and merits of the case, without appreciating that the assessee failed to file return of income and explain the source for cash deposits either during assessment proceedings or appeal proceedings. 3. The Ld.CIT(A) erred in holding that the order passed u/s.147 r.w.s 144 of the Act dated 29/12/2019 can no longer hold good and thereby is annulled, in view of the provision of Sec.14 of Insolvency and Bankruptcy Code, 2016. 3.1 The Ld.CIT(A) erred in relying on the Bombay High Court decision in the case of M/s.Murali Industries Vs ACIT dated 23/12/2021, the facts of which are distinguishable from the facts of the present case. In the assessee's case, 148 proceeding was initiated by issue of notice u/s.148 dated 31/01/2019, which is well before the date of declaration of moratorium vide order dated 29/05/2019. 3.2 The Ld.CIT(A) erred in not considering the Jurisdictional High court decision in the case of M/s.Dishnet Wireless Limited Vs ACIT WP No.34668 of 2018 dated 17/06/2022 in which it is held that Corporate Insolvency Resolution Plan sanctioned and approved cannot impinge on the rights of the Income tax department to pass any fresh assessment order under section 148 of the Act. 3.3 The Ld.CIT(A) erred in annulling the order passed u/s.147 r.w.s 144 without appreciating that the impugned order was passed in consequence of the 148 notice issued before the date of admission of application by Hon'ble NCLT on 29/05/2019. 4. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored. :-3-: ITA. No: 1634/Chny/2024 3. The brief facts of the case that the assessee is a Company, had not filed its return of income for the A.Y.2017-18. The information was received by the AO about cash deposit made by the assessee into its bank account during the demonetization period and hence issued notice u/s.148 of the Act on 31.01.2019. The assessee did not filed return of income, nor did it respond to subsequent reminders and hence the AO gathered information u/s.133(6) of the Act and found that the Assessee had made a total cash deposit of Rs.20,76,65,208/- to its two bank accounts. Since, the assessee did not participate in assessment proceedings, the AO passed an exparte order u/s.144 r.w.s. 147 of the Act, dated 29.12.2019 by making an addition of entire cash deposit u/s.69A of the Act by holding as under: “5. On perusal of the bank statements, it is observed that the following credits are reflected during the Financial year 2016-17 in two different bank account nos: 1. Acc no. 602605055 145 of the assessee maintained at ICICI bank, T Nagar Month wise credits Amount Oct-16 34,50,000/- Nov-16 1,86,22,666/- Dec-16 71,00,261/- Total 2,91,72,927/- 2. Acc no. 912020009184480 of the assessee maintained at Axis bank, Mogappair Month wise credits AMOUNT Apr-16 1,67,67,533/- May-16 2,12,34,440/- Jun-16 1,75,96,000/- Jul-16 3,27,00,900/- Aug-16 2,82,83,548/- :-4-: ITA. No: 1634/Chny/2024 Sep-16 3,51,44,834/- Oct-16 1,73,84,857/- Nov-16 53,67,191/- Dec-16 26,70,718/- Jan-17 2,00,000/- Feb-17 0/- Mar-17 11,42,260/- TOTAL 17,84,92,281/- Since the assessee has not complied to the notices sent and has not filed the return of income for the FY 2016-17/AY 2017-18, the entire credits in the bank account nos. 602605055145 and 912020009184480 of the assessee is considered as total income for the A.Y. 2O17-18 relevant to the F.Y. 2016-17 6. Hence, the total credits into the two bank accounts no. (as mentioned above) to the tune of Rs. 20,76,65,208/- is treated as unaccounted income for the A.Y. 2017-18 u/s 69A of the Income Tax Act, 1961. After examining the details, the assessment is completed as under: Total returned income : NA Assessed Income :Rs. 20,76,65,208/- Since the additions is made under U/s.69A of the Income Tax Act, 1961, the provisions of sec. 115BBE of IT Act are applicable and tax is calculated at the rate of 60%. Since the assessee has not filed its Return of Income for A.Y. 2017-18, penalty u/s. 271F is initiated.” 4. Aggrieved by the order of the AO the assessee preferred an appeal before the ld.CIT(A), Chennai – 19. The Assessee filed a detailed written submissions stating that the company was having a financial problem and hence could not complete the residential projects which were booked by the prospective buyers. Further, the home buyers of the project named “Eden Garden” a housing project filed an application before the NCLT, Chennai in CP/1167/IB/2018, September 2018, which was admitted on 29.05.2019. :-5-: ITA. No: 1634/Chny/2024 4.1 During the CIRP proceedings, the claim of Rs.83.77 crore was received and Rs.76.09 crore was verified as correct and the same was approved by NCLT in an order dated 04.06.2021. Further, the assessee also stated that the Insolvency professional (IP) had made a personal visit to statutory agencies like Income Tax, GST and ROC to collect information required for preparation of an information memorandum as envisaged in section 29 of IBC, 2016 and it was submitted to the NCLT, no claim was received from these department. Further, the assessee relied on the decision of the Hon’ble Bombay High Court rendered in the case of Murali industries Vs.ACIT dated 23.12.2021, which is in favour of the assessee. After considering the submissions of the assessee, the ld.CIT(A) deleted the additions made by the AO by holding as under: “6.7 The undersigned after consideration of the above said order(s) of the Hon'ble NCLT, Chennai and the decision of the Hon’ble Bombay High Court rendered in the case of Murali Industries Vs. ACIT dated 23.12.2021 observed in the case of the Appellant that the assessment order u/s 144 r.w.s 147 of the Income Tax Act, 1961 was passed on 29.12.2019 determining the total income at Rs.20,76,65,208/- and thereby raised a demand of Rs.25,49,07,362/- during the moratorium period declared by the Hon'ble NCLT, Single Bench Chennai. 6.8 For a better understanding of the issue involved it is essential to bring on record Section 14 of the Insolvency and Bankruptcy Code, 2016, which is reproduced here as under:- (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:-- :-6-: ITA. No: 1634/Chny/2024 (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 1[Explanation.--For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;] (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. 1[(2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified;] 2[(3) The provisions of sub-section (1) shall not apply to-- 3[(a) such transactions, agreements or other arrangements as may be notified by the Central Government in consultation with any financial sector regulator or any other authority;] (b) a surety in a contract of guarantee to a corporate debtor.]. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium :-7-: ITA. No: 1634/Chny/2024 shall cease to have effect from the date of such approval or liquidation order, as the case may be 6.9 In view of the declaration of moratorium by the Hon'ble NCLT, the specific provision of section 14 of the Insolvency and Bankruptcy Code, 2016 the undersigned is of the considered view that the AO is not empowered to pass any order during the Moratorium period. 6.10 In the case of the Appellant, the AO has passed the order u/s.144 r.w.s 147 of the Act for the A.Y 2017-18 on 29.12.2019 during the moratorium period declared by the Hon'ble NCLT, Chennai i.e. from 29.05.2019 to 04.06.2021. As the AO is barred from passing any order during the moratorium period, the order passed u/s 144 r.w.s 147 of the Act dated 29.12.2019 for the A.Y 2017-18 on can no longer hold good and therefore is hereby annulled. According all the grounds raised by the Appellant are hereby treated as allowed and the AO is directed to delete the addition of Rs.20,76,65,208/- for the AY 2017-18. 7. In the result the appeal filed is treated as allowed” 5. Aggrieved by the order of the ld.CIT(A), the revenue preferred an appeal before us. 6. The ld.DR submitted that the Ld.CIT(A) erred in holding that the order passed u/s.147 r.w.s 144 of the Act dated 29/12/2019 can no longer hold good and thereby is annulled, in view of the provision of Sec.14 of Insolvency and Bankruptcy Code, 2016. Further, the ld.DR stated that the Ld.CIT(A) erred in relying on the Bombay High Court decision in the case of M/s.Murali Industries Vs ACIT dated 23/12/2021, the facts of which are distinguishable from the facts of the present case. In the assessee's case, 148 proceeding was initiated by issue of notice u/s.148 dated 31/01/2019, which is well before the date of declaration of :-8-: ITA. No: 1634/Chny/2024 moratorium vide order dated 29/05/2019. The ld.DR also stated that the Ld.CIT(A) erred in not considering the Jurisdictional High court decision in the case of M/s.Dishnet Wireless Limited Vs ACIT, WP No.34668 of 2018 dated 17/06/2022 in which it is held that Corporate Insolvency Resolution Plan sanctioned and approved cannot impinge on the rights of the Income tax department to pass any fresh assessment order under section 148 of the Act. Therefore, the Ld.CIT(A) erred in annulling the order passed u/s.147 r.w.s 144 without appreciating that the impugned order was passed in consequence of the notice u/s.148 of the Act issued before the date of admission of application by Hon'ble NCLT on 29/05/2019 and hence ld.DR prayed for setting aside the order of the ld.CIT(A) and confirm the order of the AO. 7. Per contra, the ld.AR submitted that the ld.CIT(A) annulled the Assessment Order passed by the Assessing Officer for the AY 2017-18, by duly following the law laid down by this Hon'ble Tribunal and the Courts in India and thereby deleted the additions made. Therefore, the Present Appeal of the revenue is bereft of any merits and is liable to be dismissed in limine as the ld.CIT(A), while passing the order under Section 250 of the Act, had rightly considered all the aspects before setting aside the Assessment :-9-: ITA. No: 1634/Chny/2024 Order which has been passed in violation of the provisions of IBC and the binding precedents. Further, the ld.AR submitted that the Assessing Officer without following the due procedure as provided under IBC, 2016 having missed the bus, has come before this Hon'ble Appellate Tribunal seeking remedy for his mistakes. 7.1 Further, the ld.AR stated that the assessee was engaged in the business of Construction of Buildings. During the FY 2017-18 the Respondent Company was pushed into a severe financial crisis due to which they could not service their financial debt. The Financial Creditors (Home Buyers of Project \"Eden Garden\") filed an Application in September 2018 in CP/IB/1167 /2018 before the Hon'ble National Company Law Tribunal (NCLT), Chennai seeking initiation of Corporate Insolvency Resolution Process of the Respondent Company under Section 7 of IBC. The ld.AR submitted that a notice u/s.148 was issued by the Assessing Officer. In the interim, the Hon'ble NCLT, Chennai initiated the Corporate Insolvency Resolution Process (CIRP) of the assessee vide its order dated 29.05.2019 and declared moratorium under Section 14 of IBC, 2016. :-10-: ITA. No: 1634/Chny/2024 7.2 The ld.AR submitted that the Resolution Professional (RP) appointed by the Hon'ble NCLT, Chennai made paper publication of the initiation of CIRP of the Company on 03.06.2019 for inviting claims from Stakeholders, apart from RPvisiting the Income Tax Department and other Statutory Authorities personally to inform about the CIRP and required them to file claims if any in respect of the tax dues from the assessee. However, from the records of the assessee, no claims have been received from the Income Tax Department until the approval of Resolution Plan of the Corporate Debtor on 04.06.2021. 7.3 The Ld.AR also submitted that the Assessing Officer failed to submit the claim before the RP despite being duly informed through paper publication and also by personally visiting the Income Tax Department. This clearly shows the interest shown by the Officers of the Income Tax Department in recovering the dues if any from the assessee. 7.4 The Ld.AR submitted that the Assessing Officer instead of filing claim before the RP, proceeded to complete the assessment under Section 144 to the best of his judgement vide Assessment Order dated 29.12.2019. Even after completing the assessment the :-11-: ITA. No: 1634/Chny/2024 claim was not filed before the RP which is a mandatory requirement to crystalize the claim of the Department. 7.5 The Ld.AR submitted that subsequently the Resolution Plan submitted by Eden Garden Residential Owners Association got the nod of the Hon'ble NCLT, Chennai vide order dated 04.06.2021. Upon, the approval of the Resolution Plan, the assessee Company has been taken over by the new management and only those Creditors who duly filed their claims before the Resolution Professional formed part of the Resolution Plan. 7.6 The ld.AR argued that the Law of the land, recognizes the Clean Slate Theory. Once a Resolution Plan is approved by the Adjudicating Authority under Insolvency and Bankruptcy Code(IBC), it would bind all the stakeholders including the taxation authorities and that no claim whatsoever can be made for any of the dues till the date of approval of the Resolution Plan against the Corporate Debtor. 7.7 Further, the ld.AR argued that it is mandatory for all the stakeholders including the Central Government, State Government or local authorities to file their claim before the RP which was held :-12-: ITA. No: 1634/Chny/2024 by Hon'ble Supreme Court in the matter of Essar Steel India Ltd Committee of Creditors Vs Satish Kumar Gupta [(2020) 8 SCC 531] as follows: \"A successful resolution applicant cannot suddenly be faced with \"undecided\" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove.\" 7.8 It is submitted that the Resolution Plan becomes binding on all the stakeholders including the Central Government, any State Government or any local authorities as held by the Hon'ble Supreme Court in the matter of Ghanshyam Mishra &Sons (P) Ltd Vs Edelweiss Asset Reconstruction Co. Ltd [(2021) 9 SCC 657] as follows: \"93. . .. It is at this stage that the plan becomes binding on the corporate debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. The legislative intent behind this is to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plans would go haywire and the plan would be unworkable.\" \"94. We have_ no hesitation to say that the_ _words \"other stakeholders\" would sruarel cover the Central Government an State Government or any local authorities. The legislature noticing that on account of obvious :-13-: ITA. No: 1634/Chny/2024 omission certain tax authorities were not abiding by the mandate of the I&B Code and continuing with the proceedings, has brought out the 2019 Amendment so as to cure the said mischief. We therefore hold that the 2019 Amendment is declaratory and clarificatory in nature and therefore retrospective in operation.\" 7.9 Further, the Respondent relies on the decision of Hon'ble Delhi High Court in the matter of TheNational Sewing Thread Company Limited Vs Deputy Commissioner of Income Tax &Ors in WP(C) 8679 of 2024 vide order dated 24.06.2024 wherein it was again reiterated that \"Once a Resolution Plan is approved by the Hon'ble NCLT under Section 31 (1) of IBC, 2016, the claims as provided in the Resolution Plan shall stand frozen and it will be binding on the Corporate Debtor and its employees, members, creditors, including Central Government, any State Government or any local authority.\" 7.10 The same was also held by Hon'ble Delhi High Court in the matter of IRED FIVERIVER Pvt Ltd Vs Income Tax Department & Anr. It is submitted that the Hon'ble Rajasthan High Court also in the matter of Ultra Tech Nathdwara Cement Ltd. Vs Union of India &Ors (Civil Writ Petition No. 9480 of 2019) held that the demand notices issued for a period prior to the date on which the NCLT has granted its approval to the Resolution Plan, are not permissible in law. It further stated that \"The point is, once the public announcement is made under the IBC by the Resolution Professional calling upon all concerned, including the statutory bodies, to raise claim, it would be expected from all the :-14-: ITA. No: 1634/Chny/2024 stakeholders to diligently raise their claim. The Income Tax authorities in that sense, ought to have been diligent to verify the previous years' assessment of the Corporate Debtor as permissible under the law and to raise the claim in the prescribed form within time before the Resolution Professional. In the present case, the Income Tax Authorities failed to do so and therefore, the claim stood extinguished.” 7.11 The ld.AR summarised that as held by the Hon'ble Supreme Court and the Hon'ble High Courts the following shall be interpreted a. It is mandatory for all the Stakeholders including the Statutory Authorities to file claim before the Resolution Professional as mandated under IBC, 2016, b. Only those claims that were filed before the Resolution Professional shall after verification by the Resolution Professional form part of the Resolution Plan, c. All other claims which were not duly filed before the Resolution Professional will not form part of the Resolution Plan, d. Only the claims that were admitted by the Resolution Professional will form part of the Resolution Plan, e. The Resolution Plan is binding on Central Government and various authorities, including tax authorities f. The Corporate Debtor begins on a Clean Slate under the new ownership and management upon completion of CIRP and shall not be surprised with Undecided Claims. :-15-: ITA. No: 1634/Chny/2024 7.12 Further, the ld.AR submitted that as regards the reliance placed by the Income Tax Department in the matter of Dishnet Wireless Ltd Vs Assistant Commissioner of Income-Tax, the facts of both the cases are different which are summarised as below: Point of Difference Evocon (present Appeal) Dishnet (case law relied by Department) Application filed by Financial Creditor of the Company Application filed voluntarily by the Company Application filed before NCLT Application under Section 9 of IBC, 2016 was filed by the Financial Creditor for the default committed by the Company Application under Section 10 of IBC, 2016 was filed by the Company on their own to declare them insolvent Intimation to the Income Tax Department Income Tax Department was duly intimated by Resolution Professional by personally visiting the jurisdictional officer and also through Paper Publication for filing of claims before the Resolution Professional which is recorded in the order u/ s 250 Income Tax Department contended that they have not been duly intimated by notices by the Resolution Professional. :-16-: ITA. No: 1634/Chny/2024 7.13 In the present case on hand a. The Assessing Officer failed to file the claim before the Resolution Professional despite the personal intimation by the Resolution Professional and through paper publication dated 03.06.2019. The Assessing Officer slept over his rights for a period of nearly 24 months i.e. 2 years from 29.05.2019 (date of CIRP initiation) to 04.06.2021 (date of approval of Resolution Plan). b. The Resolution Plan of the Company in Para V(d) in Page No. 8 of the Resolution Plan (Page No. 20 of the Convenience Paper Book filed by the Respondent Company) clearly states that there has been no claim filed by the Assessing Officer before the Resolution Professional. c. As the Assessing Officer failed to file the claim before the Resolution Professional, it did not form part of the Resolution Plan and therefore the same stands extinguished as per the decisions of the Hon'ble Supreme Court and Hon'ble High Courts. 7.14 In view of the above submissions, the ld.AR prayed to dismiss the present Appeal upholding the order of which is devoid of merits :-17-: ITA. No: 1634/Chny/2024 and in contrary to the Judgements of Hon'ble Supreme Court and Hon'ble High Courts. 8. We have heard the rival contentions, perused the material available on record and gone through the orders of the authorities below. It is admitted fact that the AO has passed an order u/s.144 r.w.s.147 of the Act dated 29.12.2019 by making an addition of entire cash deposit u/s.69A of the Act to the tune of Rs.20,76,65,208/-,thereby raised a demand of Rs.25,49,07,362/- during the moratorium period declared by the Hon'ble NCLT, Single Bench Chennai. We note that the AO had issued a notice u/s.148 of the Act earlier to the initiation of the IBC proceedings i.e., 31.01.2019 against the assessee and the assessment was concluded during the moratorium period i.e., on 29.12.2019. It is also observed that the department has not provided the details of any dues or proceedings during the period of paper publication made by the RP in the CRIP proceedings nor responded to the RP during his visit to the income tax department for seeking the details of any dues from the assessee. Therefore, we concur with the order of the Ld.CIT(A), wherein the ld.CIT(A) has rightly observed that as per the provisions of section 14 of the I B C, 2016, the order u/s.144 r.w.s 147 of the Act passed by the AO for :-18-: ITA. No: 1634/Chny/2024 the A.Y 2017-18 on 29.12.2019 during the moratorium period declared by the Hon'ble NCLT, Chennai i.e. from 29.05.2019 to 04.06.2021, the AO is not empowered to pass any order during the Moratorium period. The provisions of section 14 of IBC, 2016 is reproduced here as under:- (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:-- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 8.1 Further, the reliance placed by the ld.AR on the decision of the Hon'ble Supreme Court in the matter of Essar Steel India Ltd Committee of Creditors Vs Satish Kumar Gupta [(2020) 8 SCC 531] in support of the order of the ld.CIT(A) is relevant to the present case, wherein their lordships has held as below: \"A successful resolution applicant cannot suddenly be faced with \"undecided\" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective :-19-: ITA. No: 1634/Chny/2024 resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove.\" 8.2 Further, the similar issue has been dealt in the following decisions and held in favour of the assessee in the Hon’ble Apex court and Hon’ble High courts: - Ghanshyam Mishra & Sons (P) Ltd Vs Edelweiss Asset Reconstruction Co. Ltd [(2021) 9 SCC 657] – SC - The National Sewing Thread Company Limited Vs Deputy Commissioner of Income Tax & Ors in WP(C) 8679 of 2024 vide order dated 24.06.2024 – Hon’ble Delhi High Court - Ired Fiveriver Pvt Ltd Vs Income Tax Department & Anr. - Hon’ble Delhi High Court - Ultra Tech Nathdwara Cement Ltd. Vs Union of India & Ors (Civil Writ Petition No. 9480 of 2019) - Hon'ble Rajasthan High Court 8.3 Therefore, respectfully following the decisions of the Hon’ble Apex Court and Hon’ble High courts, we are of the considered view that there is no infirmity in the order of the ld.CIT(A) in deleting the additions made by the AO and hence the appeal of the revenue is devoid of merits. :-20-: ITA. No: 1634/Chny/2024 8.4 Further, the reliance placed by the revenue on the decision of the Hon’ble Madras High court in the case of Dishnet Wireless Ltd Vs Assistant Commissioner of Income-Tax, is not applicable to the facts and circumstances of the present case and hence the argument of the revenue cannot be accepted. Hence, we are of the considered view that the appeal filed by the revenue is devoid of merits and thus, the grounds raised by the Revenue are dismissed. 9. In the result the appeal of the revenue is dismissed. Order pronounced in the court on 30th January, 2025 at Chennai. Sd/- Sd/- (एस एस िवʷनेũ रिव) (S.S. VISWANETHRA RAVI) Ɋाियक सद˟/Judicial Member (एस. आर.रघुनाथा) (S. R. RAGHUNATHA) लेखासद˟/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated, the 30th January, 2025 JPV आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT, Chennai 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "