Real Strips Limited (Now merged with Raajratna Metal Industries Limited), Ahmedabad V. Asstt. Commissioner of Income Tax, Circle-3(1)(2), Ahmedabad

ITA 341/AHD/2022

AI Insights

Real Strips Ltd. appealed against the order of the CIT(Appeals), National Faceless Appeal Centre, which confirmed the additions of Employees Contribution of ESI and PF amounting to Rs. 3,71,042 and interest on income tax refund of Rs. 5,28,656 for the Assessment Year 2017-18. The company argued that all its liabilities were extinguished following an order from the National Company Law Tribunal (NCLT), Ahmedabad under the Insolvency and Bankruptcy Code, 2016. The ITAT, referencing a similar case for A.Y. 2015-16, decided to restore the matter to the AO for re-evaluation in light of the NCLT's order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125648 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 01-09-2022
• Other Referred Cases: Palogix Infrastructure (P.) Ltd. v. ACIT [2022] 135 taxmann.com 73 (Kolkata \\u2013 Trib.)
• Laws Referred To: Income Tax Act, Insolvency and Bankruptcy Code, 2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . N o . 3 4 1/ A h d /2 0 2 2 ( A s se ss m e nt Y e a r : 20 17- 1 8 ) R ea l St r i ps L td. ( N ow M er ge d Wit h R aa j r a t na M eta l I n du str ie s Lt d .) A D i vis io n of R aa j r ata n Me ta l I nd u s tr ie s Ltd . - R e a l S tr ip s Lt d . Su r ve y N o . 2 4 5- 2 4 6, V i ll ag e S ar i Ah me da bad , Sa na n d H ig h w a y, Ah me da bad , G uj a r a t-3 82 2 2 0 V s. A C IT C r i cl e - 3( 1) ( 2) , A h m e da ba d [P AN N o.A A BC R 2 8 9 3N /A A A C R 99 80 M] (Appellant) .. (Respondent) Appellant by : Shri P. D. Shah, A.R. Respondent by: Shri Ramesh Kumar, Sr. D.R. D a t e of H ea r i ng 25.04.2023 D a t e of P r o no u n ce me nt 26.04.2023 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre(in short “NFAC”), Delhi in Order No. ITBA/NFAC/S/250/2022-23/1043488074(1) vide order dated 20.06.2022 passed for Assessment Year 2017-18. 2. The assessee has taken the following grounds of appeals:- “1. That the learned National Faceless Appeal Centre, has erred in law and facts by confirming the addition of Employees Contribution of ESI and PF of Rs. 3,71,042/- and therefore the ITA No. 341/Ahd/2022 Real Strips Ltd. vs. ACIT Asst.Year –2017-18 - 2 - learned AO should be directed to allow the said claim while computing the total income. 2. That the learned National Faceless Appeal Centre, has erred in law and facts by confirming the addition of interest on income tax refund of Rs. 5,28,656/- and therefore the learned AO should be directed to delete the said addition while computing the total income. 3. That the learned AO be directed to delete the additions/disallowances as all the company’s liabilities have been directed to extinguished vide order of the Hon’ble NCLTL. 4. That your appellant craves a leave to add, alter or amend any grounds at the time of hearing.” 3. At the outset, we observe that the appeal of the assessee is time barred by 14 days. However, considering the fact that there is a small delay in filing of the present appeal of 14 days, in the interest of justice the appeal of the assessee is hereby being condoned. The Ld. D.R. has also not objected to the delay of filing of the present appeal being condoned. In the result, in the interest of justice the delay in filing of appeal of the assessee is hereby being condoned. 4. Before us the Counsel for the assessee submitted that the case of the assessee is covered by the decision of ITAT, Ahmedabad in assessee’s own case for A.Y. 2015-16 in ITA No. 812/Ahd/2019 vide order dated 10.11.2022. In the aforesaid case, the ITAT held that the National Company Law Tribunal (NCLT), Ahmedabad has passed order under ITA No. 341/Ahd/2022 Real Strips Ltd. vs. ACIT Asst.Year –2017-18 - 3 - Section 30(6) r.w.s. 31 of the Insolvency and Bankruptcy Code, 2016 in IA 518 (AHM) 2021 in CP (IB) No. 307 of 2020, on 4 th January 2022, in terms of which all liabilities of the assessee shall stand extinguished. Accordingly, the ITAT, restored the matter back to the file of the AO, with following observations: “4. Having regard to the facts of the case before us and keeping in view the decision of Co-ordinate Bench of this Tribunal at Kolkata in the case of Palogix Infrastructure (P.) Ltd. v. ACIT [2022] 135 taxmann.com 73 (Kolkata – Trib.), we deem it fit to restore the case for the assessment year under consideration before us to the Assessing Officer for taking necessary action in accordance with law. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes.” 5. Accordingly, the Counsel for the assessee submitted that since the facts for A.Y. 2017-18 are duly covered by the aforesaid decision, a similar direction may also be issued for A.Y. 2017-18 as well and the matter may kindly be restored to the file of the AO for taking necessary action in accordance with law. In response, the Ld. D.R. has also not objected to the matter being restored to the file of the Ld. AO in line with the order passed by ITAT Ahmedabad in assessee’s own case for A.Y. 2015-16 vide order dated 10.11.2022. 6. Accordingly, respectfully following the decisions of ITAT Ahmedabad in assessee’s own case for A.Y. 2015-16, we are hereby ITA No. 341/Ahd/2022 Real Strips Ltd. vs. ACIT Asst.Year –2017-18 - 4 - restoring the matter back to the file of the Ld. AO for taking necessary action in accordance with law. 7. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 26/04/2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 26/04/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 25.04.2023 2. Date on which the typed draft is placed before the Dictating Member 25.04.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 26.04.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .04.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 26.04.2023 7. Date on which the file goes to the Bench Clerk 26.04.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................