JSW STEEL COATED PRODUCTS LTD (SUCCESSOR OF ASIAN COLOUR COATED ISPAT LTD.),MUMBAI V. .DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 29, DELHI

ITA 4010/DEL/2024

AI Insights

JSW Steel Coated Products Ltd., the successor of Asian Colour Coated Ispat Ltd., appealed against the order of the Commissioner of Income Tax (Appeals)-30, New Delhi, which dismissed their appeal as infructuous concerning the Assessment Year 2012-13. The primary contention was the imposition of a penalty of Rs. 38,54,81,876 under section 271(1)(c) of the Income Tax Act, 1961, following an assessment that included additions related to bogus share capital. The assessee argued that the penalty should not have been imposed as the company was under the Corporate Insolvency Resolution Process (CIRP) and had an NCLT-approved resolution plan. The Tribunal found that the Assessing Officer did not consider the NCLT's order when imposing the penalty and directed compliance with the CIT(A)'s order to give effect to the NCLT's decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23006 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961, Insolvency and Bankruptcy Code 2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: RAKESH JOSHI
• Keywords: Bogus Share capital; Bogus
• Section: 143(3); 271(1)(c)

Judgement Text

" 1 ITA No. 4010/Del/2024 JSW Steel Coated Products Ltd. Vs. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI BEFORE BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 4010/Del/2024 (A.Y 2012-13) JSW Steel Coated Products Ltd. (Successor of Asian Colour Coated Ispat Ltd.) JSW Centre, Bandra Kurla Complex, Bandra (East) Mumbai PAN No:AAFCA1873K Vs. Deputy commissioner of Income Tax, Central Circle-29, Room No. 318, Income Tax Building, E-2, Ara Centre, Jhandewalan Extension, New Delhi (Appellant) (Respondent) Appellant by Sh. Rakesh Joshi,, CA Respondent by Sh. Dayainder Singh Sidhu, CIT(DR) Date of Hearing 12/12/2024 Date of Pronouncement 18/12/2024 ORDER PER YOGESH KUMAR U.S.: The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)-30, New Delhi (‘Ld. CIT(A)’ for short], dated 21/12/2023 for the Assessment Year 2012-13. 2. The Grounds of Appeal are as under: - “1 On the facts & circumstance of the case, the Learned CIT(A) has erred in dismissing the appeal by treating the same as in- fructuous, without considering the facts and circumstances of the case. 2. On the facts & circumstance of the case, the Learned CIT(A) ought to have allow appeal of the assessee and treat the order as 2 ITA No. 4010/Del/2024 JSW Steel Coated Products Ltd. Vs. DCIT null and void considering his findings about the National Company Law Tribunal (NCLT) order. 3. On the facts & circumstance of the case, the Learned Assessing officer has erred in levying a penalty of Rs.38,54,81,876/- u/s 271(1)(c) of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 4. The appellant craves leave to add, amend, alter or delete the said ground of appeal.” 3. Brief facts of the case are that, an assessment order came to be passed for Assessment Year 2012-13 u/s 143(3) of the Income Tax Act, 1961 (‘Act’ for short) on 31/05/2015at income of Rs. NIL after making total adjustments amounting to Rs. 1188,849,334/- including addition with respect to Bogus Share Capital of Rs. 118,81,08,725/-, which were set off against the current year and brought forward losses. Followed by the said Assessment Order, a penalty proceedings u/s 271(1)(c) were initiated. 4. The Assessee challenged the assessment order before the Ld. CIT(A) and the penalty proceedings so initiated were kept in abeyance till the pendency of the Appeal before the Ld. CIT(A) and the quantum Appeal of the Assessee was later dismissed. Thereafter, the penalty proceedings were continued by issuing fresh show cause notice and an order of penalty dated 10/07/2021 came to be passed u/s 271(1)(c) of the Act by imposing penalty of Rs. 38,54,81,876/-. It is found that the Assessee's Representative vide letter dated 04/12/2020 informed the A.O. that the Assessee company was 3 ITA No. 4010/Del/2024 JSW Steel Coated Products Ltd. Vs. DCIT under Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code 2016 (IBC) and also informed that the NCLT vide order dated 20/08/2018 and 26/10/2020, approved the resolutionplan submitted by the Assessee. However, the A.O. proceeded to pass the penalty order which has been challenged before the Ld. CIT(A). The Ld. CIT(A) vide order dated 21/12/2023, though, directed the A.O. to give effect to the order of the NCLT, however, ‘dismissed’ the Appeal filed by the Assessee as in-fructuous. 5. Aggrieved by the order of the Ld. CIT(A), the Assessee preferred the present Appeal on the grounds mentioned above. 6. The only grievance of the Assessee is that though the Ld. CIT(A) has taken cognizance of the fact of passing the resolution plan by the NCLT and also directed the A.O. to give effect to the order of the NCLT as per provision of law, however, dismissed the Appeal of the Assessee as a result the A.O. in not giving effect to the order of the Ld. CIT(A) on the ground that the ‘Appeal of the Assessee has been dismissed’ therefore, sought for intervention by the Tribunal. 7. Per contra, the Ld. Departmental Representative by relying on the orders of the Lower Authorities, sought for dismissal of the Appeal. 4 ITA No. 4010/Del/2024 JSW Steel Coated Products Ltd. Vs. DCIT 8. We have heard both the parties and perused the material available on record. The Ld. CIT(A) in its order dated 21/12/2023 observed that, the Assessee's Representative, vide letter dated 04/12/2020 informed the A.O. that the Company was under Insolvency Process under IBC Code and also conveyed the order dated 20/08/2018 and 26/10/2020 passed by NCLT approving the resolution plan, however, without considering the same, an order of the penalty has been passed on 10/07/2020 u/s 27(1)(c) of the Act. Further, the Ld. CIT(A) has also taken cognizance of the order of the NCLT and also observed that the year under consideration i.e. Assessment Year 2011-12 pertaining to the prior period to approval of resolution plan by the Hon’ble NCLT, accordingly, held that the order of the NCLT is applicable in the year under consideration, thus, directed the A.O. to give effect to the order of the NCLT as per provision of law. However, it is the grievance of the Assessee's Representative that the said order of the Ld. CIT(A) has not been given effect by the A.O. on the ground that the ‘Appeal of the Assessee has been mentioned as dismissed’ at para 10 of the order of the Ld. CIT(A) dated 21/12/2023. Considering the above facts and circumstances, we direct the A.O. to comply with the directions of the Ld. CIT(A) at para 9 of the order impugned by giving effect to the order of the Hon’ble NCLT in accordance with law without influenced by the result of the Appeal mentioned by the Ld. CIT(A) as ‘dismissed.’ 5 ITA No. 4010/Del/2024 JSW Steel Coated Products Ltd. Vs. DCIT 9. In the result, the appeal filed by the Assessee is partly allowed for statistical purpose. Order pronounced in open Court on 18th December, 2024 Sd/- Sd/- (SHAMIM YAHYA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18/12/2024 R.N, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "