Dy. Commissioner of Income Tax , Circle-2(1), Hyderabad V. KSK Mahanadi Power Company Limited, Hyderabad

ITA 919/Hyd/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4504 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2014-2015
• Appeal Filed On: 30-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Rama Kanta Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member & ITA Nos. 858 & 859/Hyd/2019 and ITA Nos. 535 & 536/Hyd/2020 Assessment Years: 2014-15 & 2015-16 KSK Mahanadi Power Company Limited 8-2-293/82/A/431A Road No.22, Jubilee Hills Hyderabad-500 033 PAN : AADCK6843M V s. DCIT,Circle-2(1) Room No.514, 5 th Floor Signature Towers Kothaguda Kondapur Hyderabad-500 084 (Appellant) (Respondent) ITA Nos.919,920 &1686/Hyd/2019 Assessment Years: 2014-15,2015-16 & 2016-17 DCIT,Circle-2(1) Room No.514, 5 th Floor Signature Towers Kothaguda Kondapur Hyderabad-500 084 V s. KSK Mahanadi Power Company Limited 8-2-293/82/A/431A Road No.22, Jubilee Hills Hyderabad-500 033 PAN : AADCK6843M (Appellant) (Respondent) ITA No.902/Hyd/2019 Assessment Year: 2013-14 DCIT,Circle-2(1) Room No.514, 5 th Floor Signature Towers V s. KSK Water Infrastructures Private Limited 8-2-293/82/A/431A 2 KSK Mahanadi Power company Ltd. O R D E R Per Bench: These above appeals are filed by the assessee and revenue, feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-2/Pr.CIT-2, Hyderabad, for the AY’s 2013-14, 2014-15,2015-16 & 2016-17 respectively. For the sake of convenience, we dispose-of these appeals by this common order. 2. At the outset it is represented by both the sides that the Corporate Insolvency Resolution Proceedings (CIRP) are pending against the assessee and as of now, Hon'ble National Company Law Appellate Tribunal (NCLAT) is seized with the jurisdiction. 3. We have considered the issue in the light of the provisions of Insolvency and Bankruptcy Code, 2016 (“the Code”) and the decision of the Hon'ble Apex Court in the case of Ghanashyam Mishra And Sons vs Edelweiss Asset Reconstruction (2021) 126 taxmann.com 132 (SC). Under section 13 of the Code, the adjudicating authority after adjudication of the application under section 7 or 9 or 10 of the Code shall declare a moratorium which shall include the prohibition of the institution of suits or continuation of pending suits or proceedings against the corporate Kothaguda Kondapur Hyderabad-500 084 Road No.22, Jubilee Hills Hyderabad-500 033 PAN : AADCK6247P (Appellant) (Respondent) Assessee by: Ms. S.Sandhya, Advocate Revenue by : Shri Rajendra Kumar,CIT-DR Date of hearing: 20.07.2022 Date of pronouncement: 22.07.2022 3 KSK Mahanadi Power company Ltd. debtor in any court of law or tribunal. In Ghanashyam Mishra And Sons (supra), it was held that, (i) That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (ii) 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect; and (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued. 4. A reading of the provisions under section 13 and 14 of the Code along with the decision in Ghanashyam Mishra And Sons (supra), clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings is prohibited and when once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any 4 KSK Mahanadi Power company Ltd. local authority, guarantors and other stakeholders. At any rate, for the time being, these appeals cannot be proceeded with during the continuance of the proceedings under the Code. However, depending upon the result of such proceedings before the adjudicating authority in respect of the corporate debtor, appropriate steps if any, may be taken by the appellant/respondent. We, therefore, granting leave to the appellants/respondents in all these appeals to seek the restoration of the appeals, if necessitated by the orders in the Corporate Insolvency Resolution Proceedings, dismiss the appeals in limine. We derive support for the above proposition from the decision of the Mumbai Bench of the Tribunal in the case of Mahavir Roads & Infrastructure Pvt. Ltd., Vs. DCIT in ITA Nos. 646 to 651/Mum/2019 (AYs.2008-09 to 2013-14), dt.08/06/2022. 5. In the result, all these appeals of assessee and revenue are dismissed in limine. Order pronounced in the Open Court on 22 nd July, 2022. Sd/- Sd/- (RAMA KANTA PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 22 nd July, 2022. Thirumalesh/sps Copy to: S.No Addresses 1 KSK Mahanadi Power Company Limited 8-2-293/82/A/431A Road No.22, Jubilee Hills 5 KSK Mahanadi Power company Ltd. Hyderabad-500 033 2 DCIT,Circle-2(1) Room No.514, 5 th Floor Signature Towers Kothaguda Kondapur Hyderabad-500 084 3 KSK Water Infrastructures Private Limited 8-2-293/82/A/431A Road No.22, Jubilee Hills Hyderabad-500 033 4 CIT(A)-2 Hyderabad 5 Pr.CIT-2, Hyderabad 6 DR, ITAT Hyderabad Benches 7 Guard File By Order