DCIT, Circle, Bhilwara V. M/s. Suzuki Textiles Ltd. , Bhilwara

ITA 151/JODH/2018

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax, Bhilwara against Suzuki Textiles Ltd., challenging the order of the Commissioner of Income Tax (Appeals), Ajmer. The appeal contested several issues including the deletion of disallowances related to late deposit of employee contributions towards PF & ESI, unsecured loans, and interest on income-tax added to book profit. The backdrop of the case includes a resolution plan approved by the NCLT, which led to the appointment of a Resolution Professional and a Monitoring Committee to oversee the implementation of the plan. The Tribunal decided to abate the appeal proceedings until a counsel could be appointed for the respondent by the Resolution Professional.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122684 (ITAT-JODHPUR)
• Duration Of Justice: 5 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 03-04-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 151/Jodh/2018 Assessment Year: 2014-15 Deputy Commissioner of Income Tax, Circle, Bhilwara (Appellant) Vs. M/s Suzuki Textiles Ltd., Vill. Gudha, Post Mandal, District-Bhilwara, Rajsathan 311001 [PAN: AABCS 9142F] (Respondent) Appellant by Respondent by : : None Sh. Rajesh Ojha, CIT-DR Date of Hearing Date of Pronouncement : : 10.10.2023 12.10.2023 ORDER Per Dr. M. L. Meena, AM: This captioned appeal has been filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals), Ajmer dated 30.01.2028 in respect of Assessment Year 2014-15 challenging therein multiple issues, etc. 2 ITA No. 151/Jodh/2018 DCIT v. Suzuki Textiles Ltd. 2. The assessee has raised the following grounds of appeal: “On facts and in law, the ld. CIT(A), Ajmer erred in:- 3. deleting the disallowance of late deposit of employee’s contribution towards PF & ESI amounting to Rs.1,91,80,121/- made by the AO u/s 36(1)(va) of the I.T. Act, 1961 without appreciating the facts of the case; 4. deleting the addition made on account of unsecured loans of Rs. 3,09,00,00/- and interest paid thereupon Rs.18,13,873/- without appreciating the facts of the case that the assessee failed to offer satisfactory explanation for credit entries in its books of accounts; 5. deleting the addition of Rs.3,54,310/- out of total addition of interest on income-tax Rs.19,48,637/- made to the book profit, without appreciating the facts of the case; 6. The appellant craves to add, amend, alter, delete or modify the above ground of appeal before or at the time of hearing.” 3. At the outset, the ld. CIT-DR for the department submitted that the assessee’s application filed before the NCLT, Jaipur Bench has been disposed of by the Hon’ble NCLT vide its order dated 18.01.2023 in IA (IBC) No. 590/JPR/2022 in CP No. (IB)-275/9/JPR/2019 by appointing of the resolution professionals as Head/Chairman of the Committee with approval of the resolution plan with the certain observations in compliance of the conditions mentioned therein. One of the relevant observation is reproduced hereunder: 3 ITA No. 151/Jodh/2018 DCIT v. Suzuki Textiles Ltd. “16. On perusal of the Resolution Plan, we are of the considered view that the Resolution Plan meets the requirement of Section 31 r/w Section 30(2) of the Code. Therefore, the present application IA (IBC) No. 590/JPR/2022 is allowed and the Resolution Plan is approved with the certain observations and compliances of the following Conditions: 16.1 Approval of the Resolution Plan does not mean automatic waiver or abetment of legal proceedings, if any, which are pending by or against the Company/ Corporate Debtor as those are the subject matter of the concerned Competent Authorities having their proper/own jurisdiction to pass any appropriate order as the case may be. The Resolution Applicant on approval of the Plan may approach those Competent Authorities/ Courts /Legal Forums/ Offices - Govt. or Semi Govt./State or Central Govt. for appropriate reliefs sought for in the plan. This is not going to make any hindrance for proper implementation of the Resolution Plan as those are the subje . ct matter of the concerned/appropriate Competent Authorities. The Resolution Applicant has liberty to approach Competent Authorities for any concession, relief or dispensation as the case may be. 16.2 The Monitoring Committee would be three members monitoring committee consisting of one member/representative of the SRA, (ii) representative of Financial Creditor having highest voting share in the CoC and (iii) Mr. Prashant Agarwal Resolution Professional, as Head of Monitoring Committee. The Resolution Professional is hereby appointed as the Head/Chairman of the monitoring Committee for supervision of the implementation of the Resolution Plan. The Monitoring Committee needs to be wound up at an early date on implementation of the Resolution Plan. Fees of the RP as the Chairman of the Monitoring Committee is to be Rs. 1,50,000.00 per month till the full implementation of the Resolution Plan and the same shall be borne by SRA.” 4. He further submitted that the Resolution Plan approved by the NCLT does not mean automatic waiver or abatement of legal proceedings, if any which are pending by or against the company/corporate debtors as those are subject matter of the concerned Competent Authority having their 4 ITA No. 151/Jodh/2018 DCIT v. Suzuki Textiles Ltd. proper/ own jurisdiction to pass any appropriate order as the case may be. However, in principle he argued that the proceedings in the present case may be abated till the appointment of appellant’s counsel to defend the case of the appellant assessee before the Tribunal. 5. None appeared for the defendant assessee as Authorized Representative (counsel) is yet to be appointed. However, a copy of NCLT order is filed on record on behalf of the assessee by its earlier representative. 6. Having heard the ld. DR for the department, perusal of the material on record, impugned order and NCLT order, we find that the resolution plan has been approved by NCLT with specific observations for the implementation of the resolution plan with the Monitoring Committee which would comprise of three Member’s Committee consisting of one Member of the, SRA (ii) representative of Financial Creditor having highest voting share in the CoC and (iii) Mr. Prashant Agarwal Resolution Professional, as Head of Monitoring Committee for the supervision of implementation of the Resolution Plan. In our view, a Authorized Representative/counsel is required to be appointed by the Mr. Prashant Agarwal, Resolution Professional, Head of the Monitoring Committee for the defendant 5 ITA No. 151/Jodh/2018 DCIT v. Suzuki Textiles Ltd. appellant to defend the case of the appellant assessee before the Tribunal. In our view, it would be justified to abate the appeal proceedings in the instant case till the appointment of the defendant counsel by the aforesaid Resolution Professional, Head of Monitoring Committee. Accordingly, the present appeal of the Revenue is abated with the right to revive the appeal on appointment of the counsel on behalf of the defendant assessee by the resolution professionals. However, the revenue has right to proceed with recovery of demand as per law. 7. In the backdrop of the aforesaid discussion, the appeal of the Revenue is abated in the terms indicated as above. Order pronounced in the open court on 12.10.2023 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT (A) 5. The DR 6. Guard File Assistant Registrar Jodhpur Bench