Garden Silk Mills Pvt. Ltd., Surat V. Dy. Commissioner of Income Tax, Circle -1(1)(2), Surat

MA 22/SRT/2023

AI Insights

The case involves Garden Silk Mills Pvt. Ltd., which filed eleven Miscellaneous Applications (MAs) concerning different assessment years, pointing out a mistake apparent from the record in the Tribunal's earlier order. The company argued that the Tribunal failed to consider the binding nature of the resolution plan approved by the NCLT under the Insolvency and Bankruptcy Code, 2016, which should have been applied to modify or cancel the tax demand. The Tribunal acknowledged the oversight and recalled the previous order, agreeing to rectify the mistake by allowing the appeals in line with the approved resolution plan.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301640 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 03-05-2023
• Other Referred Cases: Ghanashyam Mishra & Sons Pvt. Ltd. vs Edelweiss Asset Reconstruction Company Ltd.
• Laws Referred To: Income Tax Act, 1961, Insolvency and Bankruptcy Code, 2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Liquidation
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. A. L. SAINI, HON'BLE ACCOUNTANT MEMBER (Physical Hearing) Sl. No. MA Nos. Asst. Year Name of Appellant Name of Respondent 1. 19/SRT/2023 [arising out in ITA No. 372/SRT/2022] 2010-11 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 2. 20/SRT/2023 [arising out in ITA No. 373/SRT/2022] 2011-12 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 3. 21/SRT/2023 [arising out in ITA No. 374/SRT/2022] 2012-13 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 4. 22/SRT/2023 [arising out in ITA No. 375/SRT/2022] 2013-14 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 5. 23/SRT/2023 [arising out in ITA No. 376/SRT/2022] 2014-15 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 6. 24/SRT/2023 [arising out in ITA No. 377/SRT/2022] 2015-16 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 7. 25/SRT/2023 [arising out in ITA No. 378/SRT/2022] 2016-17 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 8. 26/SRT/2023 [arising out in ITA No. 379/SRT/2022] 2017-18 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 9. 27/SRT/2023 [arising out in ITA No. 380/SRT/2022] 2019-20 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat 10. 28/SRT/2023 [arising out in 2020-21 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st The DCIT, Circle – 1(1)(2), Surat MAs. 19 to 29/SRT/2023 Garden Silk Mills Pvt. Ltd. 2 ITA No. 381/SRT/2022] Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C 11. 29/SRT/2023 [arising out in ITA No. 382/SRT/2022] 2020-21 Garden Silk Mills Pvt. Ltd., Tulsi Krupa Arcade, 1 st Floor, Puna – Kumbharia Road, Surat. PAN: AACG8932C The DCIT, Circle – 1(1)(2), Surat आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of these eleven Miscellaneous Applications filed by the assessee, pertaining to different assessment years, wherein the assessee has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961 (in short ‘the Act’) has crept in the order of the Tribunal dated 27.02.2023. 2. The Authorised Representative (ld. AR) of the assessee submits that in all the appeals, the assessee has raised almost similar grounds of appeal, therefore, this Tribunal should have allowed the appeal of the assessee and should have directed to the Assessing Officer to modify / reduce / cancel the demand following the decision of Tribunal in assessee’s own case for various years, in order dated 18.05.2022. The ld. AR further submits that during the hearing of the appeals, the assessee made categorical submission that applicant went into liquidation on initiating insolvency proceeding. The National Company Law Tribunal (in short ‘the NCLT’) vide order dated Date of Hearing: 11/08/2023 Date of Pronouncement: 17/08/2023 Appellant by: Shri Nitin Gheewala, CA Respondent by: Shri Vinod Kumar, Sr. DR MAs. 19 to 29/SRT/2023 Garden Silk Mills Pvt. Ltd. 3 01.01.2021 passed in IA No.661 of 2020 with IA No.759 of 2020 in CP(IB) No. 453 of 2018 approved resolution plan vide order dated 19.09.2020 with addendum dated 19.02.2020 of MCPI Pvt. Ltd. (successful resolution applicant), in exercising of its power under section 31(1) of Insolvency and Bankruptcy Code, 2016 (in short “I & B Code”). The ld. AR further submits that once resolution plan is approved by the NCLT, the resolution plan is binding on corporate debtor, including Central Government or State Government or any other stakeholders. Any other stakeholders who are not part of this resolution plan, will not be entitled to initiate or continue any proceeding in respect of a claim which is not a part of resolution plan. The ld. AR of the assessee submits that all his submissions are properly recorded by the Bench in Para 2 and 3 of order dated 27.02.2023. The assessee also relied on the decision of Hon'ble Apex Court in the case of Ghanashyam Mishra & Sons Pvt. Ltd. vs Edelweiss Asset Reconstruction Company Ltd. (2021) 126 taxmann.com 132 (SC) wherein it was held that “once a resolution plan is approved by adjudicating authority under section 31(1) of I & B Code, the claim as provided in the resolution plan stand frozen and will be binding on all these stakeholders. Further, any claim which were not part of this resolution plan and stand extinguished then in that circumstances, no person including of Central Government is entitled to initiate or continue any proceeding in respect of a claim which was not a part of resolution plan. The ld. AR submits that though all his submissions were duly recorded, however the appeal of assessee was dismissed instead of allowing. On similar contention, similar appeals of various years were allowed and the cross appeals of Revenue for all those years were dismissed, vide order dated MAs. 19 to 29/SRT/2023 Garden Silk Mills Pvt. Ltd. 4 18.05.2022. Similarly, the appeal of Revenue pending before Hon'ble Gujarat High Court in ITA No.875 of 2013 was also dismissed. The ld. AR of the assessee submits that due to inadvertence or accidental omission, the appeal of assessee was dismissed instead of allowing it as per the law laid down by Hon'ble Apex Court in the case of Ghanashyam Mishra & Sons Pvt. Ltd. vs Edelweiss Asset Reconstruction Company Ltd. (supra). The ld. AR of the assessee submits that suitable correction / rectification in para 10 and 11 may be made for allowing the appeal as per the scheme of resolution plan, as approved by the NCLT, in pursuance of the provisions of Insolvency and Bankruptcy Code, 2016. 3. On the other hand, Learned Senior Departmental Representative (ld. Sr. DR) for the Revenue submits that assessee himself has accepted that their contention were properly recorded by the Bench. The assessee is seeking reversal the decision, which is not permitted. The assessee is seeking relief which is not permitted under section 254(2) of the Act. However, ld DR states that if the Tribunal does not pass the order in pursuance of the provisions of Insolvency and Bankruptcy Code, 2016 and does not follow the judgment of the Jurisdictional High Court in assessee`s own case, then in that circumstances, the Tribunal may take appropriate decision to recall the order. 4. We have considered the submissions of both the parties and carefully gone through the ground of appeal/grievances raised in these miscellaneous applications. We note that this Tribunal has not considered properly, the provisions of Insolvency and Bankruptcy Code, 2016, which is the main crux and foundation to adjudicate these MAs. 19 to 29/SRT/2023 Garden Silk Mills Pvt. Ltd. 5 assessee`s and Revenue`s appeals. Further, the Tribunal did not consider the facts of the decision of Hon'ble jurisdictional High Court, in assessee’s own case, in Tax Appeal No.875 of 2013, dated 24.01.2022. This Tribunal also did not consider the decision in assessee`s own case, in appeal for various years passed by this Tribunal, vide order dated 18.05.2022, (vide IT(SS)A Nos.79/AHD/2012, IT(SS)A Nos.80-82, 135/AHD/2012, IT(SS)A No.2762/AHD/2015, IT(SS)A Nos. 91-94, 125/AHD/2012 & IT(SS)A No.936/AHD/.2017). Considering these facts, we find that there is a mistake apparent in the Tribunal order, which requires rectification, therefore we recall the order of Tribunal dated 27.02.2023. 5. During the course of hearing, these Miscellaneous Applications, we have announced the date of hearing, which is fixed on 21.09.2023. As the date of hearing was informed to both the parties during the course of hearing, therefore issuance of fresh notice of hearing is dispensed with. 6. In the result, all the Miscellaneous Application filed by the assessee are allowed to the extent indicated above. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order is pronounced on 17/08/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A. L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat / Ǒदनांक/ Date: 17/08/2023 SAMANTA MAs. 19 to 29/SRT/2023 Garden Silk Mills Pvt. Ltd. 6 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat