DCIT, New Delhi V. M/s. Met Trade India Ltd., New Delhi

ITA 3671/DEL/2012

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax (DCIT), Circle-6(1), New Delhi against M/s. Met Trade India Ltd. concerning the assessment year 2006-07. The primary issue in the appeal was the deletion of additions amounting to Rs. 5,51,11,277 claimed by the assessee for parts and accessories of Air Pollution Control Machineries. The Income Tax Appellate Tribunal (ITAT) Delhi dismissed the appeal due to the moratorium imposed by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016, which prohibits any legal proceedings against the company during the Corporate Insolvency Resolution Process (CIRP).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121996 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 10-07-2023
• Assessment Year: 2006-2007
• Appeal Filed On: 12-07-2012
• Other Referred Cases: PCIT vs Monnet Ispat and Energy Ltd.
• Laws Referred To: Income Tax Act 1961, Insolvency and Bankruptcy Code 2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Liquidation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E: NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA No.3671/Del/2012 Assessment Year: 2006-07 The DCIT, Circle-6(1), New Delhi vs. M/s. Met Trade India Ltd., 138-139, Near Bharti Petrol Pump, Main Road, Ghazipur, Delhi 110096 PAN AAACM 8484 F (Appellant) (Respondent) For Revenue: Ms. Samita Singh, Sr. DR For Assessee : Shri Abhishek Mathur, CA Date of Hearing : 11.07.2023 Date of Pronouncement : 25.07.2023 ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order of Ld. CIT(A)-IX, New Delhi dated 28.03.2012 for AY 2006-07. 2. The grounds have been raised of revenue are as follows:- 1. The order of Ld. CIT(A) is erroneous & contrary of facts & law. 2. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the additions of Rs. 5,51,11,277/- claimed by the assessee on addition of parts and accessories of Air Pollution Control Machineries. 3. The assessee file return of income for AY 2006-07 in question on 31.11.2006 declaring total income of Rs. 4,99,55,266/-. In the scrutiny assessment order dated 30.12.2008 the Assessing Officer assessed taxable income at Rs. 10,51,11,543/- by making certain additions and disallowances. 4. In the first appeal the ld. CIT(A) granted part relief to the assessee on certain grounds including sole ground of revenue raised before this Tribunal (supra) thus the ITA No. 3671/Del/2012 2 revenue is an appeal against the aforesaid order of assessee deleting the addition made by the Assessing Officer on parts and accessories of air pollution control machineries. 5. The ld. AR has filed an application informing that the NCLT by order dated 25.09.2020 in terms of sec 14 of the insolvency and bankruptcy code 2016, declared moratorium w.e.f. 3.10.2003 which shall continue during entire CIRP, prohibiting all the following:- i) the institution of suits or continuation of pending suits or proceedings against the company including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. ii) transferring, encumbering, alienating or disposing of by the Company any of its assets or any legal right or beneficial interest therein. iii) any action to foreclose, recover or enforce any security interest created by the company in respect of its property including any action under the securitization and reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. iv) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the company. 6. Thus, it appears that the NCLT has ordered liquidation of assessee company under IBC 2016 by observing that the order of moratorium 03.10.2020 passed u/s. 14 of the Insolvency Act prohibits the institution of suits or continuation of pending suits or proceedings against the company including execution of any judgment, decree, or order of any court of law, Tribunal, arbitration panel or other authority. This being the position no useful purpose is going to be served in continuing with the present proceedings in the appeal filed by the revenue it is relevant to mention that the Hon’ble Supreme Court in the case of PCIT vs Monnet Ispat and Energy Ltd. has upheld judgment of Hon’ble High Court of Delhi wherein it was held that sec 238 of Insolvency and bankruptcy code 2016 will over ride anything in consistent contained in any other enactment, including the I.T Act 1961. It was also held that the moratorium u/s. 14 of the IBC code 2016 will also apply to the appeals preferred by the Income Tax Department against the orders of the authorities below including CIT(A) and the ITAT in respect of tax liability of a dater under Corporate Insolvency Resolution Process (CIRP). 7. In view of foregoing discussion, the appeal of the revenue is dismissed with a liberty to the revenue to seek remedial measures in accordance with law as and when it ITA No. 3671/Del/2012 3 is in a position to justify the continuance of the proceedings or where it is otherwise necessary to do so in the interest of the parties. 8. In the result, the appeal of the revenue is dismissed in limine for statistical purposes. Order pronounced in the open court on 25.07.2023. Sd/- Sd/- (DR. B.R.R. KUMAR) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25 th July, 2023. NV/- Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR // By Order // Asstt. Registrar, ITAT, New Delhi