Dy. Commissioner of Income Tax, Central Circle-2(1)., Hyderabad V. Indu Projects Limited, Hyderabad

ITA 1336/Hyd/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6817 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132; 13

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA Nos. 1335 & 1336/Hyd/2017 (निर्धारण वर्ा / Assessment Years: 2007-08 & 2008-09) Dy. Commissioner of Income Tax, Central Circle-2(1), Hyderabad Vs. M/s. Indu Projects Limited, Hyderabad [PAN No. AAACI8812M] अपीलधर्थी / Appellant प्रत् यर्थी / Respondent निर्धाररती द्वधरध/Assessee by: Shri Md. Afzal, AR रधजस् व द्वधरध/Revenue by: Ms. M.Narmada, CIT-DR स ु िवधई की तधरीख/Date of hearing: 15/09/2022 घोर्णध की तधरीख/Pronouncement on: 15/09/2022 आदेश / ORDER PER BENCH: Challenging the order(s) dated 25/05/2017 passed by the learned Commissioner of Income Tax (Appeals)-12, Hyderabad (“Ld. CIT(A)”), in the case of M/s. Indu Projects Ltd., (“the assessee”) for the assessment years 2007-08 & 2008-09, Revenue preferred these appeals. ITA Nos. 1335 & 1336/Hyd/2017 Page 2 of 5 2. At the outset it is represented by the Learned AR that the Corporate Insolvency Resolution Proceedings (CIRP) are initiated by admitting the application under section 7 of the Insolvency and Bankruptcy Code, 2016 (“the Code”) and moratorium under section 14 of the Code was declared by the National Company Law Appellate Tribunal (NCLAT) by order dated 25/02/2019. In terms of the moratorium, the institution and continuance of the proceedings against the assessee are prohibited. Learned DR submitted that the state of affairs obtaining as on today are not available and it is not known at what stage the CIRP are pending. Learned AR also submits that such facts are yet to be ascertained. 3. Be that as it may, we have considered the issue in the light of the provisions of 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 ITA Nos. 1335 & 1336/Hyd/2017 Page 3 of 5 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. 4. 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. 5. At any rate, for the time being, these appeals cannot be proceeded with during the continuance of the proceedings under the Code. Revenue shall take note of CIRP and has to work out their remedies by preferring the claim therein. However, depending upon the result of such proceedings before the adjudicating authority in respect of the corporate ITA Nos. 1335 & 1336/Hyd/2017 Page 4 of 5 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 orders 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. 6. In the result, both the appeals of Revenue are dismissed in limine. Order pronounced in the open court on this the 15 th day of September, 2022 Sd/- Sd/- (RAMA KANTA PANDA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 15/09/2022 TNMM ITA Nos. 1335 & 1336/Hyd/2017 Page 5 of 5 Copy forwarded to: 1. The Dy. Commissioner of Income Tax, Central Circle-2(1), Hyderabad. 2. M/s. Indu Projects Limited, No. 1009, Indu Fortune Fields 13 th Phase, KPHB Colony, Hyderabad. 3. CIT(A)-12, Hyderabad. 4. Pr.CIT(Central)-Hyderabad. 5. DR, ITAT, Hyderabad. 6. GUARD FILE TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD