ACIT, CENTRAL CIRCLE-1(1), CHENNAI V. M/S INDUS MOBILE DISTRIBUTION PRIVATE LIMITED, CHENNAI

ITA 149/CHNY/2023

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals)-18, Chennai, concerning the assessment year 2014-15. The primary issue arose after the company, Indus Mobile Distribution Pvt. Ltd., was dissolved by the NCLT, Chennai, under the Insolvency and Bankruptcy Code, 2016. The Revenue contended that the liquidation process was not completed and proposed to file an appeal against the NCLT's dissolution order. However, the Income Tax Appellate Tribunal, Chennai, dismissed the Revenue's appeal, emphasizing that the dissolution of the company by the NCLT effectively ended its legal existence, precluding any further legal actions or proceedings against it.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134855 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2023
• Appeal Filed By: Department
• Order Result: DismissedDismissed
• Bench Allotted: A
• Next Hearing Date: 01-05-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 05-02-2023
• Laws Referred To: Income Tax Act, 1961, Insolvency and Bankruptcy Code, 2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Liquidation
• Section: 54

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 149/CHNY/2023 िनधाᭅरण वषᭅ/Assessment Year: 2014-15 The ACIT, Central Circle -1(1), Chennai. vs. M/s. Indus Mobile Distribution Pvt. Ltd., No.261, TTK Road, Alwarpet, Chennai – 600 018. PAN: AABCI 6304D (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri AR.V. Sreenivasan, Addl.CIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Shrenik Chordia, CA सुनवाई कᳱ तारीख/Date of Hearing : 02.05.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 02.05.2023 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)-18, Chennai in ITA No.757/CIT(A)-18/2016-17 & 179/CIT(A)-18/2019-20 dated 24.11.2022. The assessment was framed by the ACIT, Central Circle 1(1), Chennai for the assessment year 2014-15 u/s.143(3) 2 ITA No. 149/Chny/2023 r.w.s.263 of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 30.12.2019. 2. At the outset, it is noticed that this company is dissolved by NCLT, Chennai Bench vide its order dated 17.10.2022 in IA(IBC)/939(CHE)/2022 in CP/763/2018 by exercising the powers conferred u/s 54(2) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 14 of IBBI (Liquidation Process) Regulations, 2016 and order the dissolution of the corporate debtor viz. the appellant company. The NCLT finally held as under:- “10. Heard the submissions of the Ld. Applicant counsel. On perusal of the submissions made before us and the documents placed on record it appears that the there is no prospects left I the Liquidation process of the Corporate Debtor hence this present application has been filed. Thus this Tribunal on exercise of the powers conferred under Sub-section (2) of Section 54 of the IBC, 2016 read with Regulation 14 of the IBBI (Liquidation Process) Regulations, 2016 hereby order the dissolution of the Corporate Debtor, viz., Indus Mobile Distribution Private Limited. Consequently, from the date of this order the Corporate Debtor stands dissolved. 11. The Registry and the Liquidator are directed to serve a copy of this order upon the Registrar of Companies, Chennai, and also to IBBI, within 14 days from the date of this Order,” The assessee informed this fact vide letter 24.03.2023. 3 ITA No. 149/Chny/2023 3. Now Revenue has written exactly the same facts which is mailed vide dated 01.05.2023 and the relevant text of the email reads as under:- “In the case of the assessee company M/s. Indus-Mobile Distribution Pvt. Ltd. For the A.Y.2014-15 an appeal against the order of the CIT(A) was filed on 06-02-2023. In this connection the assessee has filed a letter stating that the company has been liquidated and dissolved vide order of the NCLT Division bench, Chennai on 17-10-2022. In this regard it is hereby submitted that the liquidation process in the case of assessee company has not been completed and the same is evident from the MCA portal wherein the status of the company is still under liquidation. In addition to the above, the department is also proposing to file an appeal against the NCLT order vide reference stated above. Under this circumstances, the department may be allowed to file revised Form-36 in the name of the liquidator before the Hon’ble ITAT, Chennai.” 3.1 The ld.DR now before us stated that a short adjournment be given as the AO wants to verify the dissolution of the company in MCA portal. 4. We have gone through the NCLT order and noted that the company stands dissolved u/s.54(2) of the Insolvency and Bankruptcy Code, 2016 and once the company is dissolved, the entity has come to an end. No proceedings of any sort can be kept 4 ITA No. 149/Chny/2023 pending once company is dissolved because the artificial entity has come to an end. Hence, we dismiss this appeal of Revenue. 5. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on 2 nd May, 2023 at Chennai. Sd/- Sd/- (जी. मंजुनाथ) (G. MANJUNATHA) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 2 nd May, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकरआयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.