KIFS FINSTOCK LIMITED,THANE V. ASSISTANT COMMSIONER CIRCLE 16(1), MUMBAI

ITA 940/MUM/2025

AI Insights

KIFS Finstock Ltd. appealed against the order of the CIT(A) which dismissed their appeal as non-maintainable due to an ongoing moratorium issued by the NCLT under the Insolvency and Bankruptcy Code (IBC). The moratorium, effective from 03.03.2023, prohibited the continuation of legal proceedings against the corporate debtor. The assessee argued that the CIT(A) erred in dismissing the appeal without considering that the IBC does not permanently bar proceedings initiated by the company itself. The Tribunal, while dismissing the appeal, allowed for its revival post-moratorium, modifying the CIT(A)'s decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398146 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, Insolvency and Bankruptcy Code (IBC)
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RITESH MISRA
• Keywords: Principle of natural justice
• Section: 68

Judgement Text

" |आयकर अपीलीय न्यायाधिकरण न्यायपीठ, म ुंबई| IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER आयकर अपील सुं./ITA No. 940/MUM/2025 (नििाारण वर्ा / Assessment Year :2018-19) KIFS Finstock Ltd. Office No. 11, Ghantali Road, Naupada, Thane, Maharashtra-400602 v/s. बिाम ACIT Office of Assistant Commissioner of Income Tax Circle 16(1), Aayakar Bhawan, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AACCT4674N Appellant/अपीलार्थी .. Respondent/प्रनिवादी निर्ााररती की ओर से /Assessee by: None राजस्व की ओर से /Revenue by: Shri Ritesh Misra स िवाई की िारीख / Date of Hearing 05.06.2025 घोर्णा की िारीख/Date of Pronouncement 05.06.2025 आदेश / O R D E R PER NARENDRA KUMAR BILLAIYA [A.M.]:- This appeal by the assessee is preferred against the order dated 12.12.2024 by NFAC, Delhi [hereinafter referred to as “CIT(A)”] pertaining to Assessment Year [AY] 2018-19. 2. The grievance of the assessee reads as under: “1. The Ld. CIT Appeals has erred in dismissing as non-maintainable as the assessee was out of CIRP a year before passing the order and same was communicated to the Ld CIT Appeals. P a g e | 2 ITA No. 940/Mum/2025 A.Y. 2018-19 KIFS Finstock Ltd. 2. The Ld. CIT Appeals has erred by not appreciating that the section 14 of IBC puts temporary bar on continuation of proceedings and it does not put permanent embargo by abating the proceedings. 3.The Ld. CIT Appeals has erred by not appreciating that the section 14 of IBC bars. the continuation of proceedings against the corporate debtor but does not put any bar when proceedings, suit etc. is instituted by company itself. 4. The Ld CIT Appeals has erred by not deleting the addition of Rs 344,17,27,462/-made u/s 68 in respect of share capital issued. 5. The LD CIT Appeals has erred by not granting the opportunity through video conferencing before disposal of the matter & thereby principles of natural justice was violated.” 3. None appeared on behalf of the assessee in spite of notice. Therefore, we decided to proceed exparte. 4. The entire quarrel revolves around the dismissal of the appeal for the reasons that the National Company Law Tribunal [NCLT] has issued a moratorium vide its order dated 03.03.2023, by which the NCLT has appointed Shri Sushil Kumar Agarwal as an insolvency professional. The NCLT inter alia held that “it prohibits the institution of suits or continuation of pending suits or proceedings against the corporate debtor, including execution of any judgment, decree or order in any court of law, tribunal, arbitration, penal or other authority.” 5. In light of the above, the CIT(A) held the appeal as non-maintainable. We are of the considered view that a liberty should be given to the assessee for revival of the appeal once the moratorium period expires. Therefore, modifying P a g e | 3 ITA No. 940/Mum/2025 A.Y. 2018-19 KIFS Finstock Ltd. the findings of the CIT(A), we give liberty to the assessee for revival of the appeal once the final order/outcome of the NCLT comes. 6. With this modification, the appeal of the assessee is dismissed. Order pronounced in the open court on .2025. Sd/- Sd/- SAKTIJITT DEY NARENDRA KUMAR BILLAIYA (उपाध्यक्ष/VICE PRESIDENT) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 05.06.2025 अननक ेत स ुंह र जपूत/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. "