ASST. COMMISSIONER OF INCOME TAX 8(2)(1) MUMBAI, MUMBAI V. MITC METALS PRIVATE LIMITED, MUMBAI

ITA 3712/MUM/2024

AI Insights

The case involves the Assistant Commissioner of Income Tax 8(2)(1) as the appellant and MITC Metals Private Limited as the respondent. The appeal was against the order of the CIT(A) which declared the assessment order void ab-initio due to the initiation of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. The tribunal noted that the CIT(A) erred in declaring the assessment order void as it was passed before the approval of the resolution plan by the adjudicatory authority. The tribunal referenced the Supreme Court's decision in Ghanashyam Mishra & Sons Pvt. Ltd. V. Edelweiss Asset Reconstruction Company Ltd., which supports the position that claims are only frozen upon the approval of the resolution plan.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473390 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Other Referred Cases: Ghanashyam Mishra & Sons Pvt. Ltd. V. Edelweiss Asset Reconstruction Company Ltd., Sundaresh Bhatt, Liquidator of ABC Shipyard V. Central Board of Indirect Taxes and Customs
• Laws Referred To: Income Tax Act, 1961, Insolvency and Bankruptcy Code, 2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANYOGITA NAGPAL
• Keywords: Set aside
• Section: 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER & SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 3712/MUM/2024 (Assessment Year : 2014–15) Asst. Commissioner of Income Tax 8(2)(1) Room No. 481, Aayakar Bhavan, M.K.Marg, Mumbai-400020. Vs. MITC Metals Private Limited 104, Shiv Ashish Complex, Diamond Road Chembur, 400071. PAN/GIR No. AAKCS7987D (Appellant) .. (Respondent) Assessee by None Revenue by Smt. Sanyogita Nagpal (CIT DR) Date of Hearing 19/12/2024 Date of Pronouncement 30/12/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 29.05.2024 passed in Appeal no. NFAC/2013- 14/10281617 by the Ld. Commissioner of Income– tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income- Tax Act, 1961 [hereinafter referred to as \"Act\"] for the Assessment year [A.Y.] 2014-15, wherein learned CIT(A) has declared the assessment order dated 19.05.2023 as void ab- ITA no. 3712/MUM/2024 MITC Metals Private Limited 2 initio pursuant to the initiation of corporate insolvency resolution process (CIRP) vide order dated 11.03.2019 passed by NCLT u/s.14 of IBC 2016. 2. When the case was taken up for hearing, appellant revenue represented through learned DR, however none responded for respondent assessee/corporate debtor. 3. Learned DR has drawn the attention of the bench that learned CIT(A) has erred in passing the impugned order merely on the ground that corporate insolvency resolution process has been initiated against the respondent/ corporate debtor. 4. We have perused the impugned order dated 29.05.2024 passed by learned CIT(A). Learned CIT(A) has declared the assessment order dated 19.05.2023 as void ab-initio by taking strength from the judgement dated 13.04.2021 of Hon’ble Supreme Court in Ghanashyam Mishra & Sons Pvt. Ltd. V. Edelweiss asset reconstruction company Ltd. passed in civil appeal no. 8129/2019, wherein Hon’ble Supreme Court has held that it is only when the resolution plan is approved by the adjudicating authority u/s. 31(1) of the IBC, the claim provided in the resolution plan shall stand frozen and consequently all other dues shall stand extinguished. In the present case, the resolution plan was approved vide order dated 31.07.2023 passed by the adjudicatory authority. 5. At the very outset, we notice that the grounds raised by the revenue are defective. However, we propose to dispose of the matter on the basis of arguments raised by the learned ITA no. 3712/MUM/2024 MITC Metals Private Limited 3 department’s representative. We notice that the assessment order was passed on 19.05.2023 i.e before the approval of resolution plan by the adjudicatory authority on 31.07.2023. Hon’ble Supreme Court in Sundaresh Bhatt, liquidator of ABC shipyard V. Central board of indirect taxes and customs, vide order dated 26.08.2022 passed in civil appeal no. 7667/2021, held that the Income Tax authorities have limited jurisdiction to assess/determine the quantum of income tax dues but have no authority to initiate recovery of such dues at its own during the period of moratorium in violation of section 14 or 33(5) of the IBC as the case may be. It is thus clear that the assessing officer was not barred from determining the dues merely after the initiation of CIRP on 11.03.2019. 6. It is pertinent to mention that in assessee’s own case for A.Y. 2013-14, the co-ordinate bench of this Tribunal vide order dated 03.09.2024 passed in ITA No. 3615/M/2024 has set aside such order passed by learned CIT(A). 7. In view of above, learned CIT(A) has thus erred in treating the assessment order dated 19.05.2023 as void ab-initio which was passed before the approval of resolution plan on 31.07.2023 by the adjudicatory authority. We accordingly set aside the impugned order passed by the learned CIT(A) and restore the matter to the file of learned CIT(A) for adjudicating afresh in accordance with law, although the issue remains only of academic importance in view of aforestated authoritative law. ITA no. 3712/MUM/2024 MITC Metals Private Limited 4 8. In the result, the appeal filed by the revenue is decided in above terms. Order pronounced on 30.12.2024. Sd/- (OM PRAKASH KANT) Sd/- (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 30/12/2024 Anandi Nambi, Steno 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// "