DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD, HYDERABAD V. IL & FS ENGINEERING & CONSTRUCTIONS CO. LIMITED, HYDERABAD

MA 38/HYD/2025

AI Insights

The case involves IL & FS Engineering and Construction Company Limited and the revenue, where both parties filed cross-appeals related to various assessment years. Initially, the Tribunal dismissed these appeals in limine based on the incorrect assumption that CIRP was ongoing against the assessee company. Both parties, upon realizing the error, filed miscellaneous applications seeking recall of the Tribunal's order. The Tribunal, after considering the submissions and the legal framework, recalled its earlier order and scheduled the appeals for a future date.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711712 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2011-2012
• Other Referred Cases: Mahesh Goud Vorugani Vs. ITO, Ghanashyam Mishra And Sons Vs. Edelweiss Asset Reconstruction, Mahavir Roads & Infrastructure Pvt. Ltd., Vs. DCIT
• Laws Referred To: Insolvency and Bankruptcy Code, 2016, Companies Act, 2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR; DRAWING SUPPORT
• Assessee Lawyers: K.C.DEVDAS
• Keywords: Set aside
• Section: 10

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER M.A. No.19 to 25/Hyd/2023 आयकरअपीलसं./I.T.A. No.1886 to 1892/Hyd/2019 निर्धारण वर्ा/ Assessment Years : 2008-09 to 2014-15 and M.A. Nos.26 and 27/Hyd/2023 आयकरअपीलसं./I.T.A. Nos.1893 and 1894/Hyd/2019 (निर्धारण वर्ा/ Assessment Years : 2015-16 and 2009-10) IL & FS Engineering and Construction Company Limited, (Formerly Mytas Infra Limited, Hyderabad.) PAN : AABCM3722F Vs. The Deputy Commissioner of Income Tax, Central Circle – 9, Hyderabad. & The Assistant Commissioner of Income Tax, Central Circle – 3(2), Hyderabad. (Appellant) (Respondent / Cross-Appellant) M.A. Nos.34, 35, 36 to 38, 39 and 40/Hyd/2025 आयकरअपीलसं./I.T.A. No.129, 130, 131 to 133, 134 and 135/Hyd/2020 निर्धारण वर्ा/ Assessment Years : 2008-09, 2009-10, 2009-10 to 2011-12, 2013-14 and 2014-15. The Deputy Commissioner of Income Tax, Central Circle – 3(2), Hyderabad. IL & FS Engineering and Construction Company Limited, (Formerly Mytas Infra Limited, Hyderabad.) PAN : AABCM3722F (Appellant) (Respondent / Cross-Appellant) Printed from counselvise.com 2 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 O R D E R प्रति रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The captioned 16 Miscellaneous Applications (for short “M.A.”), viz. (i). 9 M.A’s filed by the assessee company i.e. M.A. Nos.19 to 27/Hyd/2023 for A.Ys. 2008-09 to 2015-16, dated 28.03.2023; AND (ii) 7 M.A’s filed by the Revenue i.e. M.A.Nos.34 to 40/Hyd/2025 for A.Ys., 2008-09 to 2011-12, 2013-14 and 2014-15, dated 02.05.2025, in turn arises from the consolidated order passed by the Tribunal while disposing of the cross-appeals filed by the assessee company and the revenue in ITA Nos.1886 to 1894/Hyd/2019 (assessee’s appeals) and ITA Nos.129 to 135/Hyd/2020 (revenue’s Appeals), dated 19.09.2022. 2. We deem it apposite to observe at the threshold, that as the Tribunal had inadvertently based on its factually wrong observation that Corporate Insolvency Resolution Proceedings (for short “CIRP”) were pending against the assessee company as per Assessee by: Shri K.C. Devdas, C.A. Revenue by: Dr. Sachin Kumar, Sr.D.R. Date of hearing: 13.06.2025 Date of pronouncement: 25.07.2025 Printed from counselvise.com 3 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), dismissed the captioned cross-appeals in limine, vide its consolidated order dated 19.09.2022, therefore, both the parties i.e the assessee company and the revenue by drawing support from the liberty that was allowed by the Tribunal while dismissing the respective appeals have sought for recall of the said respective orders. 3. Although, the applications filed by the assessee company on 28.03.2023 are found to be within the prescribed period contemplated under sub-section (2) of Section 254 of the Act i.e. filed within six months from the end of month in which the order disposing off the appeal was passed, but the fact is not so qua the applications filed by the revenue on 02.05.2025. 4. Admittedly, an application for rectification under sub-section (2) of Section 254 is statutorily required to be filed by the applicant within the prescribed period of six months from the end of the month in which the order disposing off the appeal was passed by the Tribunal. However, we find that the appeals of the revenue had suffered dismissal by the Tribunal based on the latter’s factually Printed from counselvise.com 4 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 wrong observation that Corporate Insolvency Resolution Proceedings (for short “CIRP”) were pending against the assessee company as per the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016). As the Tribunal had while disposing off the cross-appeals granted leave to the appellant(s)/respondent(s) to the subject appeals to seek restoration of the said appeals, if necessitated by the order in the Corporate Insolvency Resolution Proceedings, therefore, we are of a firm conviction that the application filed by the revenue under Section 254(2) of the Act in light of the peculiar facts leading to the dismissal of its subject appeals can safely be treated as an application for revival of the said appeals considering the liberty that was granted by the Tribunal while dismissing the appeals in limine. Our aforesaid view is fortified by the judgment of the Hon’ble Jurisdictional High Court in the case of Mahesh Goud Vorugani Vs. ITO (2024) 158 taxmann. Com 286 (Telangana). In the case before the Hon’ble High Court, the assessee, having applied under the Direct Taxes Vivad Se Vishwas Scheme (DTVSV), had filed an application to withdraw the appeal and the Tribunal vide its order dated 20.01.2021 allowed the withdrawal with a liberty to the assessee Printed from counselvise.com 5 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 to approach the Tribunal to reinstate his appeal if the application submitted by him under DTVSV scheme was rejected. As the assessee failed to pay the amount demanded by the department under the DTVSV scheme, therefore, he filed an application before the Tribunal seeking the recall of its order dated 20.01.2021 and revival of his appeal. However, the application filed by the assessee was rejected by the Tribunal, vide its order dated 11.07.2023, by holding that as the application filed under Section 254(2) of the Act was beyond the prescribed period of six months from the date of the order of the Tribunal, therefore, the same was not maintainable. On a Writ Petition, the Hon’ble High Court held that Section 254(2) had no application to the petition filed by the petitioner, which was filed for revival of the appeal. The Hon’ble High Court observed that rectification of an order and revival of an appeal are different and cannot be equated. It was further observed that though there was a delay on the part of the petitioner in approaching the Tribunal, but, the petitioner should be afforded an opportunity to pursue his appeal, to meet the ends of justice, or else he would be rendered remediless. The Hon’ble High Court further observed that since the application under Section 254(2) Printed from counselvise.com 6 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 itself was not maintainable, therefore, the Tribunal using its inherent powers should have treated the application filed by the assessee applicant as one seeking revival of the appeal, in light of its earlier order dated 20.01.2021. Accordingly, the Hon’ble High Court set aside the order dated 11.07.2023 passed by the Tribunal and restored the matter to the Tribunal with a direction that the application filed by the assessee applicant under Section 254(2) be treated as an application for revival of the appeal. 5. As in the present case before us, the captioned cross-appeals have been dismissed in limine for the mistake on the part of the Tribunal in observing that Corporate Insolvency Resolution Proceedings (for short “CIRP”) were pending against the assessee company as per the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016); although with a liberty to seek restoration of the appeals, if necessitated by the order in the Corporate Insolvency Resolution Proceedings (supra), therefore, we are of the firm conviction that by drawing support from the judgment of the Hon’ble Jurisdictional High Court in the case of Mahesh Goud Vorugani Vs. ITO (supra), the present application filed by the revenue before us can be treated as an application seeking revival Printed from counselvise.com 7 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 of its appeals in the backdrop of the liberty to seek restoration of the appeals that was allowed by the Tribunal while dismissing its appeals. 6. As is discernible from the record, the Tribunal, vide its consolidated order, dated 19.02.2022, had dismissed 16 cross- appeals of the assessee company and revenue, viz., ITA Nos.1886 to 1893/Hyd/2019 (appeals filed by the assessee company) and ITA Nos.129 to 135/Hyd/2020 (appeals filed by the revenue) on the ground that Corporate Insolvency Resolution Proceedings (for short “CIRP”) were pending against the assessee company, viz., M/s. IL & FS Engineering and Construction Company Limited as per the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016). 7. The Tribunal based on its aforesaid observation, i.e Corporate Insolvency Resolution Proceedings (for short “CIRP”) were pending against the assessee company as per the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), had observed that as per the Section 13 of the Insolvency and Bankruptcy Code, 2016 (for short, “Code”), the adjudicating authority after Printed from counselvise.com 8 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 admission of the application under Section 7 or Section 9 or Section 10 of the Code, shall declare a morotarium which shall include the prohibition of the institution of suits or continuation of pending suits or proceedings against the corporate debtor in any court of law or tribunal. Thereafter, the Tribunal looked into the provisions of the Insolvency and Bankruptcy Code, 2016 in the backdrop of the judgment of the Hon’ble Supreme Court in the case of Ghanashyam Mishra And Sons Vs. Edelweiss Asset Reconstruction (2021) 126 Taxmann.com 132 (SC). The Tribunal observed that the Hon’ble Apex Court in the case of Ghanashyam Mishra And Sons Vs. Edelweiss Asset Reconstruction (supra) had observed, that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of Section 31, then, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. 8. Accordingly, the Tribunal, based on its aforesaid deliberations, had observed that during the continuance of the Printed from counselvise.com 9 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 proceedings under the Insolvency and Bankruptcy Code, 2016, the cross-appeals filed by the assessee company/revenue cannot be proceeded with. It was further observed that depending upon the result of such proceedings before the adjudicating authority in respect of the corporate debtor, appropriate steps, if any, may be taken by the appellant(s)/respondent(s). Thereafter, the Tribunal, while dismissing the appeals in limine, had granted leave to the appellant(s)/respondent(s) to the subject appeals to seek restoration of the appeals, if necessitated by the order in the Corporate Insolvency Resolution Proceedings (CIRP). Accordingly, the Tribunal, while dismissing the cross-appeals in limine, had observed that in case any issue is decided by the NCLT in favour of either of the parties, then any of the parties can move an application for modification/recall of the order in accordance with law. For the sake of clarity, we deem it apposite to cull out the observations of the Tribunal as under: “2. During the course of hearing, it was brought to our notice that Revenue preferred these appeals with a delay of 04 days. In this connection, Revenue filed affidavit(s) along with condonation application(s) explaining the reason(s) for delay in filing the appeals. After considering the contents of the condonation application filed along with the affidavit(s) and after hearing the Ld.AR, we condone the delay and proceed to hear the matter on merits. Printed from counselvise.com 10 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 3. At the outset it is represented by both the sides that the Corporate Insolvency Resolution Proceedings (CIRP) are pending against the assessee and as of now, Hon'ble National Company Law Appellate Tribunal (NCLAT) is seized with the jurisdiction. 4. We have considered the issue in the light of the provisions of Insolvency and Bankruptcy Code, 2016 (\"the Code\") and the decision of the Hon'ble Apex Court in the case of Ghanashyam Mishra And Sons vs Edelweiss Asset Reconstruction (2021) 126 taxmann.com 132 (SC). Under section 13 of the Code, the adjudicating authority after admission of the application under section 7 or 9 or 10 of the Code shall declare a moratorium which shall include the prohibition of the institution of suits or continuation of pending suits or proceedings against the corporate debtor in any court of law or tribunal. In Ghanashyam Mishra And Sons (supra), it was held that, (i) That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (ii) 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect; and (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued. 5. A reading of the provisions under section 13 and 14 of the Code along with the decision in Ghanashyam Mishra And Sons (supra), clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings is prohibited and when once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. 6. At any rate, for the time being, these appeals cannot be proceeded with during the continuance of the proceedings under the Code. Parties Printed from counselvise.com 11 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 have to work out their remedies in the proceedings under the Code. However, depending upon the result of such proceedings before the adjudicating authority in respect of the corporate debtor, appropriate steps if any, may be taken by the appellant(s)/respondent(s). We, therefore, granting leave to the appellant(s)/respondent(s) in these appeals to seek the restoration of the appeals, if necessitated by the order in the Corporate Insolvency Resolution Proceedings, dismiss the appeals in limine. We derive support for the above proposition from the decision of the Mumbai Bench of the Tribunal in the case of Mahavir Roads & Infrastructure Pvt. Ltd., Vs. DCIT in ITA Nos. 646 to 651/Mum/2019 (AYs.2008-09 to 2013-14), dt.08/06/2022. 7. These appeals are dismissed in the light of the above observation. However, we make it clear that in case any issue is decided by the Hon'ble NCLT in favour of either of the parties, then any of the parties can move an application for modification/re-call of the order in accordance with law. 8. In the result, all these appeals are dismissed in limine.” 9. Both the assessee company and the revenue, vide their respective applications filed before us, have sought for recall of the order passed by the Tribunal dismissing their respective appeals in limine. The Ld. Authorized Representatives for both the parties, submitted that in the case of the assessee company the resolution plan is being carried out under the provisions of Section 241 and Section 242 of the Companies Act, 2013, and no application for Corporate Insolvency Resolution Proceedings (CIRP) had been filed or admitted by the adjudicating authority under Section 7 or Section 9 or Section 10 of the Insolvency and Bankruptcy Code, 2016, (31 of 2016). Apart from that, it has been stated by the Printed from counselvise.com 12 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 respective applicants that in the course of hearing of the captioned appeals it was brought to the notice of the Tribunal that in similar matters in the case of IL & FS group cases itself, the ITAT, Delhi “B” Bench, has kept the matters in abeyance in ITA Nos. 4410 to 4413, 4415, 4417 to 4420/Del/2018, vide its order dated Nil for AYs 2006-07 to 2014-15, observing that by virtue of the orders passed by the Company Law Board all the proceedings relating to IL & FS be kept in abeyance under the instructions/orders to be passed by the relevant authorities. 10. The Ld. Authorized Representatives for both the parties before us i.e the assessee company and the revenue, submitted that as the dismissal of the captioned cross-appeals by the Tribunal is based on its factually wrong observation, i.e., Corporate Insolvency Resolution Proceedings were pending against the assessee company as per the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), therefore, the respective appeals, in all fairness and interest of justice be recalled. Printed from counselvise.com 13 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 11. We have thoughtfully considered the contentions advanced by the learned Authorized Representatives for the respective applicants, i.e., the assessee company and the revenue in the backdrop of the consolidated order passed by the Tribunal, dated 19.02.2022 and the material available on record. 12. We have thoughtfully considered the facts as have been brought to our notice by the Ld. Authorized Representatives for both parties, i.e in the case of the assessee company, the resolution plan is being carried out under the provisions of Section 242(1) of Companies Act, 2013, and there is no such application for Corporate Insolvency Resolution Process which has been made or admitted by the adjudicating authority under Section 7 or Section 9 or Section 10 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016). On the contrary, the Ld. AR by referring to the miscellaneous application filed by the assessee company, submitted that the NCLT in its order dated 12.10.2018 had categorically observed that as the provisions of Insolvency Bankruptcy Code, 2016 do not apply to the IL & FS – a financial service provider, therefore, it cannot move an application under Section 10 and an order of morotarium cannot be passed in its Printed from counselvise.com 14 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 case under Section 14 of the Insolvency Bankruptcy Code, 2016. We concur with the learned Authorized Representatives for both parties that the Tribunal had inadvertently, based on a factually wrong observation that Corporate Insolvency Resolution Proceedings (CIRP) were pending against the assessee company as per the provisions of Insolvency and Bankruptcy Code, 2016, dismissed the captioned appeals in limine. 13. We thus, taking cognizance of the fact that the dismissal of the cross-appeals of the assessee company and the revenue by the Tribunal, vide its consolidated order dated 19.09.2022, is based on a wrong observation on its part that Corporate Insolvency Resolution Proceedings (CIRP) were pending against the assessee company as per the provisions of Insolvency and Bankruptcy Code, 2016, thus, are constrained to recall the respective orders passed in the cross-appeals. 14. Resultantly, the respective applications filed by the assessee company and revenue are allowed and the consolidated order passed by the Tribunal disposing off the captioned appeals, viz. ITA Nos.1886 to 1894/Hyd/2019 (assessee’s appeals) and ITA Printed from counselvise.com 15 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 Nos. 129 to 135/Hyd/2020 (revenue’s Appeals), dated 19.09.2022, is recalled in terms of our aforesaid observations. The Registry is directed to fix the cross-appeals of the assessee company and the revenue on 14.08.2025. As the date of hearing of the respective appeals was announced in the presence of the Ld. Authorized Representatives for both parties in the open Court, therefore, the issuance of separate notices is being dispensed with. Order pronounced in the Open Court on 25th July, 2025. Sd/- Sd/- (मंजूनाथ जी) (MANJUNATHA G.) लेखध सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यधनयक सदस्य/JUDICIAL MEMBER Hyderabad, dated 25.07.2025. *TYNM/sps Printed from counselvise.com 16 M.A.Nos.19 to 27/Hyd/2023 and M.A.Nos.34 to 40/Hyd/2025 आदेशकी प्रतितिति अग्रेतिि/ Copy of the order forwarded to:- 1. तिर्धाररिी/The Assessee : IL & FS Engineering and Construction Company Limited, (Formerly Mytas Infra Limited, Hyderabad.), 8-2-20/113/3/ 2nd Floor, Block B, Sanali Info Park Road No.2, Banjara Hills, Hyderabad. 2. रधजस्व/ The Revenue : The Deputy Commissioner of Income Tax, Central Circle – 9, Hyderabad. The Assistant Commissioner of Income Tax, Central Circle – 3(2), Hyderabad. 3. The Principal Commissioner of Income Tax, Central Circle, Hyderabad. 4. तवभधगीयप्रतितितर्, आयकर अिीिीय अतर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईि / Guard file आदेशधिुसधर / BY ORDER Printed from counselvise.com "