Siva Industries and Holdings Limited, CHENNAI V. DCIT, CHENNAI

MA 82/CHNY/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2878 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 18-08-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 26-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Period of limitation; Question of law; Liquidation
• Section: 12A

Judgement Text

आयकर अपीलीय अिधकरण ’डी’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ŵी महावीर िसंह, उपाȯƗ एवं माननीय ŵी मनोज कु मार अŤवाल ,लेखा सद˟ के समƗ। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM M.A. Nos. 78, 79, 80, 81, 82, 83, 84/Chny/2022 (Arising out of ITA Nos. 1040/Chny/2014, 1392, 1393, 1390, 1391, 1973 & 1417/Chny/2016) (िनधाŊरण वषŊ / Assessment Years: 2007-08, 2008-09, 2009-10 & 2010-11) M/s. Siva Ventures Ltd (Now merged with M/s. Siva Industries & Holdings Ltd) First Floor, Block-1, Beliciaa Towers, Door No. 71/1, MRC Nagar Main Road Raja Annamalaipuram, Chennai – 600 028. बनाम / Vs. ACIT Company Circle –VI(3), Chennai. ̾थायी लेखा सं./जीआइ आर सं./PAN/GIR No. AAACS-4460-M (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎ की ओरसे/ Assessee by : Shri B. Ramakrishnan (FCA) – Ld. A.R ŮȑथŎ की ओरसे/Revenue by : Shri. Hema Bhupal (JCIT) – Ld. Sr. DR सुनवाई की तारीख/Date of Hearing : 19.08.2022 घोषणा की तारीख /Date of Pronouncement : 09.09.2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member): 1. By way of these Miscellaneous Petitions filed under Rule 24 of the Income Tax Appellate Tribunal Rules, 1963, the assessee seeks recall of Tribunal’s order passed in captioned appeals vide common order dated 21.01.2020. Upon perusal of the order, it could be seen that all the M.P Nos. 78 to 84/Chny/2022 2 appeals have been disposed-off ex-parte qua the assessee since the appeals were pending for more than 5 years. The assessee had filed an adjournment application which was rejected by the bench and the case was proceeded with after hearing revenue. 2. The pleadings made in all the petitions are substantially the same. The Ld. AR, drawing attention to the chronology of events, sought to establish a reasonable cause for non-appearance on the part of the assessee. The Ld. AR submitted that the assessee was undergoing insolvency proceedings which travelled up to the level of Hon’ble Supreme Court. The Ld Sr. DR, on the other hand, submitted that the appeals have appropriately been adjudicated by the bench. 3. The contents of the petition in MA No.78/Chny/2022 read as under: PETITION UNDER RULE 24 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 PRAYING FOR RESTORING THE APPEAL IN ITA No.1040/Chny/2014 1. The Petitioner had filed the above Appeal in ITA No1040/Chny/2014, challenging the order of the DRP, Chennai in F.No. DIT/CHE/DRP/49/2013 dated 20.12.2013, for the Assessment Year 2009-10. The Department had also filed a cross appeal in ITA No.1075/ Chny/2014 and the Petitioner had filed Co No.51/Chny/2014 against the same DRP Order. 2. The above stated appeals were disposed of ex-parte by the Hon'ble Income Tax Appellant Tribunal (ITAT) since none appeared for the petitioner when the appeal came up for hearing on 23.10.2019. It is submitted that the Petitioner was not represented as one of the Financial Creditor i.e IDBI Bank had approached the National Company Law Tribunal (NCLT) under section 7 of the Insolvency and Bankruptcy Code, 2016 and the NCLT vide order dated 05.07.2019 had appointed Shri Savan Godiawala was appointed as the Interim Resolution Professional ("IRP") and Moratorium was order from 04.07.2019 till the completion of the CIRP or until approval of the Resolution Plan by the NCLT. Further, a Miscellaneous Application filed by the Financial Creditor i.e IDBI Bank for replacing the IRP based on Majority voting of 82.71% and Shri Abhijit Guhathakurta was appointed as Resolution Professional (RP) on 10.09.2019. It is in these circumstances that neither the RP nor the Applicant could appear on the scheduled date of hearing. 3. The Petitioner submits that subsequent to the ex-parte order the Resolution Plan proposed by Royal Partners Investments Funds Limited, failed as the Committee of Creditors (COC) had not approved the same and so an application seeking Liquidation was filed by the Resolution Professional in IA/837/IB/2020 in IBA/453/2019 on 08.05.2020. 4. The Petitioner submits that on 31.08.2020, one of the promoter Shri Vallal RCK had filed an application before NCLT in IA/647/2020 seeking necessary directions for consideration by the CoC on a proposed 'One Time Settlement Offer and the same M.P Nos. 78 to 84/Chny/2022 3 was admitted by NCLT. However, the NCLT vide Order in MA/43/CHE/2021 in IBA/453/2019 dated 12.08.2021 had dismissed the application filed u/s. 12A of the Act stating that the purported Settlement Plan is not a Settlement Simpliciter as envisaged under 12A of the IBC,2016 rather it is a 'Business Restructuring Plan'. Further, an order of liquidation, appointing Shri. Ayyamplalayam Venkatesan Arun as Liquidator was passed. 5. Aggrieved by the order of the NCLT, one of the promoters of the company Shri Vallal RCK had preferred a further appeal before NCLAT contending that the dismissal of withdrawal application filed by Resolution Professional as per section 12A of the Code r.w.s 30A of the IBBI Regulations based on the ground that the 'Proposed Settlement Plan' is not a 'Settlement Simpliciter' but a business restructuring plan is not tenable in the Eyes of Law. The NCLAT vide its Order dated 28.01.2022 had concluded that the ‘Adjudicating Authority’ had rightly dismissed the MA/43/CHE/2021 and came to the legitimate and reasonable conclusion that the ‘Corporate Debtor’ was required to be ordered for Liquidation, in terms of Section 33(1)(a) of the Code, 2016 and allowed the IA/837/IB/2020 in IBA/453/2019. 6. Being aggrieved by the above, one of the promoters Shri Vallal RCK of the company had further preferred an appeal before the Apex Court in Civil Appeal No.001811-001812/2022 on the substantial question of law whether the adjudicating authority (NCLT) or the appellate authority (NCLAT) can sit in an appeal over the commercial wisdom of the Committee of Creditors (hereinafter referred to as the "CoC") or not. The Hon'ble Apex Court vide Order dated 03.06.2022 was pleased to allow the appeals of the promoter and the judgment delivered by NCLAT & the Order delivered by NCLT were quashed and set-aside. Consequently, the application bearing no. MA/43/CHE/2021 in IBA/453/2019 filed by the Resolution Professional before the Learned NCLT for withdrawal of CIRP was allowed and the One Time Settlement Offer' was approved. 7. It is submitted that Petitioner was under the CIRP/ Liquidation process and hence, could not appear before this Hon'ble Tribunal. However, now that the Apex court vide its order dated 03.06.2022 had allowed the promoter's appeal and promoter have taken charge it is humbly prayed before this Hon'ble Tribunal to restore the appeal and grant an opportunity to appear and substantiate the case. 8. It is submitted that as per the proviso to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, where an appeal has been disposed of and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal. In this regard it is submitted that the absence of the Petitioner on the date of hearing was neither intentional nor willful, but for the circumstances beyond the control of the Applicant Assessee as stated above and hence in the interest of justice it is prayed to restore the appeal to its original position so that the issues involved in the appeal can be adjudicated upon on its merit by this Hon'ble Tribunal. 9. The Petitioner submits that the period during which the Petitioner was under CIRP is to be excluded in computing the Limitation in terms of Section 60(6) of IBC, 2016 which reads as under: "Notwithstanding anything contained in the Limitation Act, 1963 or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded." Therefore, in the present case as the moratorium period ends on 03.06.2022 i.e on the date of order of the Hon'ble Apex Court, this application filed is within the prescribed time limit. 10. The Petitioner further submits that the Hon'ble Apex Court in the SUO MOTU WRIT PETITION (C) NO. 3 OF 2020 had held that in cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the "actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, M.P Nos. 78 to 84/Chny/2022 4 that longer period shall apply." In the present case since the limitation to file an MP is within the period between 15.03.2020 to 28.02.2022, the Apex Court order is squarely applicable. Date of Order 21.01.2020 Date on which the limitation to file MP expires as per the Act 20.07.2020 Moratorium Period From 05.07.2019 to 03.06 2022 Extended period of Limitation as per Hon’ble Apex Court’s Order 90 days from 01.03.2022 which is 31.05.2022 The Actual date on which the limitation to file MP expires based on the Moratorium Order 6 months from 03.06.2022 that is 02.12.2022 11. The Petitioner submits that no similar application other than the instant application has been filed against the order of this Hon'ble ITAT. 12. In view of the aforementioned facts and circumstances, it is humbly prayed that this Hon'ble Tribunal may be pleased to allow the Miscellaneous Petition and restore the appeal in ITA No.1040/Chny/2014 and thus render justice. The Ld. AR has also placed on record relevant documents supporting the petition. Upon perusal, it could be seen that the assessee was undergoing Corporate Insolvency Resolution Process / Liquidation process and had sufficient cause for non-appearance on the date of hearing. It could also be seen that Hon’ble Apex Court, vide its order dated 03.06.2022, has allowed the promoter's appeal and promoters have taken charge. The issue of limitation has also been well addressed by the Ld. AR in the petition. Therefore, we find that the assessee has established sufficient cause for non-appearance in the appeals and principle of natural justice demand that another opportunity of hearing be given to the assessee. Accordingly, the Tribunal order, to the extent passed in captioned appeals on 21.01.2020, stands recalled. The registry is directed to place all the captioned appeals for fresh hearing before regular ‘D’ Bench on 17.10.2022 after due intimation to both the sides. M.P Nos. 78 to 84/Chny/2022 5 4. All the petitions stands allowed in terms of our above order. Order pronounced on 09 th September, 2022 Sd/- (MAHAVIR SINGH) उपाȯƗ /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER चेɄई Chennai; िदनांक Dated : 09-09-2022 JPV आदेशकीŮितिलिपअŤेिषत/Copy of the Order forwarded to : 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आय ु Èत (अपील)/CIT(A) 4. आयकर आय ु Èत/CIT 5. ͪवभागीय ĤǓतǓनͬध/DR 6. गाड[ फाईल/GF