M/S.COASTAL ENERGEN PVT. LTD.,CHENNAI V. PCIT, (CENTRAL), CHENNAI-1

ITA 1624/CHNY/2024

AI Insights

The case involves M/s. Coastal Energen Private Limited, which appealed against the order of the Principal Commissioner of Income Tax (PCIT), Chennai, under section 263 of the Income Tax Act, 1961. The PCIT's order sought to revise an earlier assessment order under section 143(3), directing the Assessing Officer to disallow certain amounts related to TDS liabilities and other deductions for the assessment year 2015-16. The appeal was filed following the initiation of insolvency proceedings against the company under the Insolvency and Bankruptcy Code (IBC) and the subsequent approval of a resolution plan by the NCLT. The Tribunal considered the impact of the NCLT's resolution plan, which included a waiver from all legal proceedings against the corporate debtor, and decided to set aside the PCIT's order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34482 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAY BARAN SOM
• Assessee Lawyers: SHRENIK CHORDIA
• Keywords: Set aside; TDS; Revision of order; Non compliance
• Section: 143(3); 263

Judgement Text

"Page - 1 - of 3 आयकर अपीलीय अधिकरण, ‘‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1624 /Chny/2024 निर्ाारण वर्ा /Assessment Years: 2015-16 M/s. Coastal Energen Private Limited, Shri Radhakrishnan Dharmarajan, No.31, Krishna, 1st Avenue, 100ft Road, Ashok Nagar, Chennai-600 083 [PAN: AADCC0886G] The Principal Commissioner of Income Tax, Central-1, Chennai. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri Shrenik Chordia for Mr.B.Ramakrishnan,C.A प्रत्यर्थी की ओर से /Revenue by : Nilay Baran Som, CIT सुिवाई की तारीख/Date of Hearing : 04.12.2024 घोर्णा की तारीख /Date of Pronouncement : 22.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed against the order bearing DIN & Order No.ITBA/REV/F/REV5/2023-1063739847(1) dated 31.03.2024 of the Learned Principal Commissioner of Income Tax [herein after “PCIT, for the assessment years 2015-16. Through the aforesaid appeal the assesse has challenged order u/s 263 dated 31.03.2024 passed by PCIT, Chennai. 2.0 The only issue arising from the six grounds of appeal raised by the assessee is regarding exercise of revisionary power u/s 263 by the Ld.PCIT, Chennai vide his order dated 31.03.2024 qua order u/s 143(3) ITA No.1624/Chny/2024 :- 2 -: dated 30.09.2021 directing the Ld. AO to disallow an amount of Rs.90,79,480/- u/s 40(a)(ia), of Rs.64,65,788/- u/s 36(1)(va) r.w.s 2(24)(X) and of Rs.2,51,03,631/- on account of TDS liability. It is the case of the assessee that the Ld.PCIT has clearly overlooked the facts of the present case while exercising his revisionary powers u/s 263. It was also submitted that an order u/s 143(3) w.r.t order u/s 263 dated 31.03.2024 is till pending. 3.0 At the outset, the Ld. Counsel for the assessee informed that insolvency proceedings were initiated against it in terms of an IBC application filed on 03.10.2018. It was submitted that CIRP was initiated vide NCLT order dated 04.02.2022 and NCLT had approved the resolution plan vide its order dated 30.08.2024. A copy of the impugned resolution plan was placed on record on 04.12.2024. Accordingly, the Ld. Counsel of the assessee argued that as the order u/s 263 dated 31.03.2024 of the Ld.CIT(A) is hit by the impugned NCLT approved resolution plan vide its order dated 30.08.2024, the same has become infructuous and therefore deserves to be set aside. The Ld. DR fairly conceded the impugned resolution plan dated 30.08.2024. 4.0 We have heard the rival submissions in the light of material available on records. We have noted that in point no.6 of NCLT approved resolution plan on page 125, para 6 of order dated 30.08.2024 reads as under: ITA No.1624/Chny/2024 :- 3 -: “….On and from the NCLT Approval Date, by order of the NCLT sanctioning this Resolution Plan, the Resolution Applicant and the Corporate Debtor shall be deemed to have received a waiver from all actions, Proceedings or penalties under any Applicable Law for any Non Compliance, including in connection with any transfer of assets, contracts or business by Corporate Debtor…”. Thus, it is clear from the above that the revisionary proceedings u/s 263 were done during the pendency of CIRP process. The assessee has been given waiver from all proceedings, actions etc by the NCLT order. No demand, if any, can be enforced qua 263 order dated 31.03.2024 now. Consequently, we are of the view that the order u/s 263 dated 31.03.2024 deserves to be set aside and we order accordingly. Hence, all the grounds of appeal raised by the assessee are allowed. 5.0 In the result, the appeal of the assessee is allowed. Order pronounced on 22nd , January-2025 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 22nd , January-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "