Reverse Logistics Company Pvt. Ltd., New Delhi V. PrCIT-7, New Delhi

ITA 6400/DEL/2018

AI Insights

The case involves Reverse Logistics Company Pvt. Ltd., which appealed against the revisionary order passed by the Principal Commissioner of Income Tax (PrCIT) under Section 263 of the Income Tax Act, 1961, concerning the assessment year 2013-14. The PrCIT had revised the assessment order originally passed by the Assessing Officer under Section 143(3) of the Act, due to concerns that the acceptance of credit from the issue of shares, amounting to Rs. 79.77 crores, from non-residents was prejudicial to the interest of the revenue. The Tribunal noted that the company had been directed to be liquidated by the NCLT, and thus, continuing with the appeal would serve no useful purpose.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121677 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-03-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 04-10-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 10; 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.6400/DEL/2018 Assessment Year 2014-15 Reverse Logistics Company Pvt. Ltd. Khasra No.337, 1 st Floor, Choudhry Satbir Complex, M.G. Road, Near CRC-2, Village Sultanpur, New Delhi Vs. PrCIT-7 New Delhi. TAN/PAN: AAECR0690J (Appellant) (Respondent) Appellant by: None Respondent by: Shri H.K. Choudhary, CIT-DR Date of hearing: 28 03 2023 Date of pronouncement: 15 06 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T h e c a p t i o n e d a p p ea l ha s b e e n f il e d a t th e i n st a n c e o f t h e a s s e s se e a g a i n st t h e r e vi si o n a l or d e r o f t he l d. P ri n c ip a l C o m m i s si o n e r of I n c o m e T a x , D el h i - 7 ( ‘ P r . C IT ’ i n sh or t ) d a t e d 2 7. 03 . 20 18 w h e r e i n or de r p a s se d b y t h e A s se s si n g O f f i c e r ( A O ) u n d er S ec t i o n 1 4 3 ( 3 ) o f t he I n c o m e T a x A c t , 19 61 ( th e A c t ) da t e d 2 9. 0 3. 2 01 6 c o n c e r n i n g A Y 20 1 3 - 1 4 w a s h e l d t o b e er r o ne o u s i n s o f a r a s pr e j ud i c i a l t o t he i nt e r e st o f t h e r ev e n u e w it h i n t he m e a ni n g o f S e c tio n 2 63 o f t h e A c t. 2. I n t h e c a p t i o n e d a pp e a l , t h e a s s e s s ee s ee k s t o agi ta t e t he r e v i s i o n a l or d e r p a s se d b y th e P r . C IT u n de r S e c t i o n 2 63 o f t h e A c t f o r A s s e s sm e nt Y e a r 20 13 - 1 4 i n q u e s t i o n . T h e a s se s se e in th e i n st a nt c a s e fi l e d r e t ur n o f lo s s a m o un t i n g t o R s . 9 , 94 , 71 , 80 3/ - . T he r e tu r n e d I.T.A. No.6400/Del/2018 2 i nc om e w a s a s s e ss ed a t t he sa m e fi g u r e i n t he a s s e ss m e nt f r a m e d u/ s. 1 43 ( 3 ) o f t h e A ct . Th e r e a ft e r , t h e P r . C IT i n e xe r ci s e of r e v i s i o n a l j ur i s d i c t io n c o n f e r r ed u n d er S e c t i o n 2 6 3 o f t h e A c t pa s s e d r e v i s i o n a l or de r d a te d 2 7. 0 3. 2 01 8 w h e r e t h e r e v i s i on a l C o m m i s si on e r o bj e c t e d t o t he a c t i on o f t h e A s s e s si n g O f f i ce r t o w a r d s a c c ep t anc e o f c r e di t a r i si n g f r o m i ss u e o f sh a r e s a m o u n t i n g t o R s. 79 . 7 7 c r or e s ta t e d t o b e r e c e i v e d fr o m n on - r e s i d e n t s . T h e P r . C I T o b s e r v e d t ha t t h e a s se s sm e n t or de r so p a s se d i s e r r o n e ou s a nd p r e j ud i ci a l t o t he i n te r es t o f t h e Re v e n u e o n t he g r o un d t ha t ge n ui ne n e s s o f t h e sh a r e ca p i t a l i nt r o d u c e d i n t he a s se s s e e ’ s bo o k s h a v e n ot be e n pr op e r l y e x a mi ne d o n t h e c on to ur s o f S e c t i o n 68 a nd 5 6 ( 2 ) ( vi i b) o f t h e A ct . T h e P r . C IT a c c o r d i n gl y s e t a s i d e th e a s s e s s m e nt f r a m e d b y t h e A s s e ss i n g O f fi c e r fo r A s s e s s m e n t Y e a r 20 13 - 1 4 i n qu e s ti o n. 3. I n t hi s b a c k dr o p , th e a s se s se e c h al l e n g e d t he r ev i si on al a c t i o n o f t he A s s e s s i n g O f f i c e r . T h e a s s e ss e e i s i n a p p e al a ga i n st t h e a f o r e s a i d or de r o f t h e P r . C I T . T he m at t e r w a s l i st e d fo r h e a ri n g on m u lt i pl e oc c a si on s a s p er o r d e r s h e e t . H ow e v er , no n e a p pe a r ed f or t h e a s se s se e e x c e pt o n o n e o c c a s i o n w h e r e o ne S hr i A r p i t G oe l , CA a pp e a r e d a n d a s ke d fo r a d j o ur nm e nt . I t i s f u r t he r s e e n f r o m t h e r e c or d t h a t a s p e r l et t e r d a te d 2 8 . 03 . 2 0 23 a d dr e s s e d t o T r ib u n a l , i t wa s p oi nt e d o ut b y S hr i A r p i t G oe l , V a i s h A s so c ia t e s A d v oc a t e s t h at t he y a r e n o t i n a po si t io n t o pr os e c u t e t h e s a i d Re v e nu e A p p e a l i n the a b s e nc e o f a n y i n st r u c t i on f r o m t h e i r c l i e nt de sp i t e e f f o r t s m a d e i n t hi s r e g ar d. I t w a s fu r t h er su bm i t te d t ha t a s p e r i n f or ma t i on a v a i l a b l e i n p u b li c d om a i n, t he a s s e s s e e h a s b e e n d i r e c t e d to b e li q ui da t e d v i de o r d e r da t e d 02 . 11 . 20 21 pa s s e d b y t h e N C LT . 4. T h e r e l e v a n t op e r a t i ve p a r a gr a p h s o f t h e o r d er pa s se d b y t he N C LT p l a c e d b e f o r e us r e a d a s u n d e r : “ 1 7 . A c c o rd i n g l y , b y e x e r c i s i n g o u r p o w e r u n d e r S e ct i o n 3 3 s u b - S e c t i o n ( 1 ) ( a ) p a s s t h e f o l l o w i n g o r d e r : - I.T.A. No.6400/Del/2018 3 i T h e C o r p o r a t e d e b t o r i s l i q u i d a t e d w i t h i m m e d i a t e e f f e c t i n t h e m a n n e r p r o v id e d u n d e r C h a p t e r I I I P a r t I I o f t h e I B C 2 0 1 6 . i i . S i n c e t h e C O C a t I t e m n o . 1 0 h a s a p p r o v e d t h e a pp o i n t m e n t o f R e s o l u t i o n P r o f e s s i o n a l , M r P a w a n K u m a r A g a r w a l a s l i q u i d a to r , h e n c e , w e a p p r o v e t h e a p p o i n t m e n t o f R e s o l u t i o n P r o f e s s i o n a l M r . P a w an K u m a r A g a r w a l t o a c t a s a l i q u id a t o r u / s 3 4 ( 1 ) I B C , 2 0 1 6 . i i i . T h e l i q u i d a t o r i s d i r e c t e d t o t a k e c u s t o d y a n d c o n t r o l o f t h e a s s e t s , p r o p e r t y o f t h e C o r p o r a t e D e b to r w i t h i m m e d i a t e e f fe c t a n d m a d e a p u b l i c a n n o u n c e m e n t c l e a r l y s t a t i n g th a t th e C o r p o r a t e D e bt o r i s u n d e r L i q u i d a t i o n i n t e r m s o f R e g u l a t i o n 1 2 o f t h e I n s o l ve n c y a n d B a n k r u p t c y B o a r d o f I n d i a ( L i q u i d a t i o n P ro c e s s ) R e g u l a t i o n s , 20 1 6 ; i v . T h e P r o v i s i o n o f S e c t i o n 3 3 s u b - S e c t i o n 5 , 6 a n d 7 I B C , 2 0 1 6 s h a ll c o m e i n t o f o r c e w i t h i m m e d i a t e e f f e c t . T h e O r d e r o f M o r at o r i u m p a s s e d u n d e r S e c t i o n 1 4 o f t h e I n s o l v e n c y a n d B a n k r u p t c y C o d e , 20 1 6 s h a l l c e a s e t o h a v e i t s e f f e c t a n d a f r e s h M o r a t o r i u m u n d e r S e c t i o n 3 3 (5 ) o f t h e I n s o l v e n c y a n d B a n k r u p t c y C o d e s h a l l c o m m e n c e ; v . L i q u i d a to r s h a l l f o l l o w u p a n d c o n t i n u e t o i n v e st i g a t e t h e f i n a n c i a l a f f a i r s o f t h e C o r p o r a t e D e b t o r t o d e t e r m i n e t h e u nd e r v a lu e d & p r e f e r e n t i a l t r a n s a c t i o n s a n d F r a u d u l e n t T r a d i n g o r w r o n g f u l t r ad i n g e t c . , i f a n y . v i . T h i s O r d e r s h a l l b e d e e m e d t o b e a n o t i c e o f d is c h a r g e t o t h e o f f i c e r s , e m p l o y e e s a n d t h e w o r k m e n o f t h e c o r p o r a t e d e b t o r as p e r S e c t i o n 3 3 ( 7 ) o f t h e I n s o l v e n c y a n d B a n k r u p t c y C o d e , 2 0 1 6 ; v i i . T h e L i q u id a t o r s h a l l s u b m i t a P r e l i m i n a r y R e p or t t o t h e A d j u d i c a t in g A u t h o r i t y w i t h i n s e v e n t y - f i v e ( 7 5 ) d a y s f r o m t h e L iq u i d a t i o n c o m m e n c e m e n t d a t e a s p e r R e g u la t i o n 1 3 o f t h e I n so l v e n c y a n d B a nk r u p t c y ( L i q u i d a t io n P r o c e s s ) R e g u l a t i o n s , 2 0 1 6 ; v i i i . T h e R e g i s t r y i s d i r e c t e d t o c o m m u n i c a t e a c o py o f t h i s O r d e r t o t h e F i n a n c i a l C r e d i t o r , t h e C o r p o r a t e D e b t o r a n d L i q u ida t o r M r . P a w a n K u m a r A g a r w a l I P i m m e d i a t e l y ; i x . A c o p y o f t h i s O r d e r b e s e n t b y t h e R e g i s t r y a nd L i q u i d a t o r t o t h e R e g i s t r a r o f C o m p a n i e s ( R o C ) , N C T o f D e l h i & H a r y a na f o r u p d a t i n g t h e M a s t e r D a t a . A f t e r u p d a t i n g t h e Ma s t e r D a t a , R O C s ha l l s e n d c o m p l i a n c e r e p o r t t o t h e R e g i s t r a r , N C L T w i t h i n a p e r i o d o f 3 0 d a y s ; x . T h e R e g i s t r y a n d L i q u i d a t o r a r e d i r e c t e d t o c o m mu n i c a t e a c o p y o f t h i s O r d e r t o t h e I n s o l v e n c y a n d B a n k r u p t c y B o a r d o f I n di a fo r t h e i r r e c o r d . 1 8 . A c c o r d in g l y , i n t e r m s o f a f o r e s a i d o rd e r I A - 2 7 16 / 2 0 2 1 i n ( I B ) - 1 6 4 7 ( N D ) 2 0 1 9 i s h e r e b y a l l o w e d . ” 5. O n p er us al , i t i s g u a g ed t ha t t h e N C LT ha s or d e re d l i q ui d a ti o n of t h e a s s e ss e e - c o m p a n y un de r t he I B C, 2 01 6. T he N CLT h a s a l s o ob se r v e d t h a t t he o r d e r o f m or a to r i u m pa s s e d u n d e r S e c t i o n 1 4 o f t he In s ol v e n c y a n d B an kr up t c y C od e , 2 01 6 s h a l l c e a s e t o h a v e i t s e f f e c t a nd a fr e s h m or a t o r i u m un de r S e c t i on 3 3 ( 5 ) o f t h e Co de s h a l l I.T.A. No.6400/Del/2018 4 c om m e n c e . T hi s b e i n g t h e po s i ti o n, n o u s e fu l pu r p o se i s g oi n g t o be se r v e d i n c o n t i n u i n g w i t h t h e pr e s e n t pr oc e e di n gs. T he r e fo r e , t hi s a pp e a l ne e d s t o b e c on si gn e d t o t h e r e c o r d . N o t w i ths t a n d in g t he a fo r e s a i d o b s e r v a t i o n, i n t h e a b s e n c e o f r e co r d s a nd m a t e r i a l b e fo r e t he Tr i bu na l , w e a r e in n o p o si t i on t o a dj u di c a te on t h e c o r r e c t ne s s o f t he fa c t ua l i s su e s in vo l ve d. 6. F o r su c h r e a s o n s , t he a pp e a l o f t he a s s e s s e e i s d i sm i s se d w i t h a l ib e r t y t o t h e a s se s s e e t o s e e k r em e d i a l m e as ur e s in a c c o r d a n c e w i t h l aw a s a n d w he n i t i s i n a p o s i t i o n t o j u st i f y t h e co nt i n u a n c e o f t h e pr oc e e di n g s or w h e r e it i s o t h e r w i s e n e c e s sa r y t o do so i n t h e i nt e r e s t of t he pa r t i e s. 7. I n t h e r e su l t , t h e a p p e al o f t he a s se s se e i s d i sm i s s e d i n l i m i n e fo r st a ti st i c a l pu r po s e s. Order pronounced in the open Court on 15/06/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /06/2023 prabhat