ROYAL TWINKLE STAR CLUB P.LTD,MUMBAI V. DCIT TDS 2(1), MUMBAI

ITA 1430/MUM/2018

AI Insights

The case involves Royal Twinkle Star Club Pvt. Ltd., which faced appeals related to income tax assessments for the years 2012-13, 2013-14, and 2014-15. The company was under a corporate insolvency resolution process initiated by operational creditors and overseen by the National Company Law Tribunal (NCLT), which suspended the board of directors and appointed an Insolvency Resolution Professional (IRP). The appeals to the Income Tax Appellate Tribunal were filed by the suspended directors, which led to questions about their authority to file the appeals. The Tribunal found that the appeals were not maintainable as they were not signed by a competent authority from the Sale-cum-Monitoring Committee, which was responsible for overseeing the insolvency resolution process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32024 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Other Referred Cases: Gouri Kumari Devi vs. 37 ITR 220
• Laws Referred To: Income-tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANYOGITA NAGPAL
• Assessee Lawyers: RITU PUNJABI
• Keywords: TDS; Liquidation

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA Nos. 1430/MUM/2018 Assessment Years: 2012-13 & ITA Nos. 1431/MUM/2018 Assessment Years: 2014-15 & ITA Nos. 1432/MUM/2018 Assessment Years: 2013-14 Royal Twinkle Star Club Pvt. LTD. 203B, Parvati Indl Estate, Sunmil Compound, Lower Parel West Mumbai-400013 Vs. DCIT TDS 2(1) Smt. K.G. Mittal, Ayurvedic Hospital Building, Charni Road (W), Mumbai PAN No. AAACT 4038 N Appellant Respondent Assessee by : Ms. Ritu Punjabi Revenue by : Smt. Sanyogita Nagpal, CIT-DR Date of Hearing : 17/03/2025 Date of pronouncement : 19/03/2025 PER OM PRAKASH KANT, AM The Captioned orders, all dated 29.12.2017 Income-tax (Appeal) assessment years 2012 2. We have noted the appearance of the learned representative in the case. The ld. representative informed us that certain operational creditors had approached the National Company Law Tribunal (NCLT) to initiate a corporate insolvency resolution process agai the assessee. The Hon’ble NCLT, Mumbai Bench, in its order dated 02.05.2017, suspended the board of directors of the assessee company and appointed Shri Devendra Jain, CA, as the Insolvency Resolution Professional (IRP). 2.1 Subsequently, some investors challenged the NCLT order by filing an appeal before the Hon’ble National Company Law Appellate Tribunal (NCLAT), New Delhi. However, their appeals were dismissed by the NCLAT in its order dated 30.11.2017. The investors then approached the Hon’ble Supreme Court, which, in its order dated 08.01.2018, stayed the insolvency proceedings and constituted a Sale- comprised four members: IRP CA Devendra Jain, a SEBI Royal Twinkle Star Club Pvt.Ltd. ITA Nos. ORDER PER OM PRAKASH KANT, AM The Captioned appeals filed are directed against 29.12.2017, passed by the Ld. Commissioner of (Appeal) -60, Mumbai [in short Ld. CIT(A)] for the 2012-13, 2013-14 and 2014-15 respectively. We have noted the appearance of the learned representative in representative informed us that certain operational creditors had approached the National Company Law Tribunal (NCLT) to initiate a corporate insolvency resolution process agai the assessee. The Hon’ble NCLT, Mumbai Bench, in its order dated 02.05.2017, suspended the board of directors of the assessee company and appointed Shri Devendra Jain, CA, as the Insolvency Resolution Professional (IRP). Subsequently, some investors challenged the NCLT order by filing an appeal before the Hon’ble National Company Law Appellate Tribunal (NCLAT), New Delhi. However, their appeals were dismissed by the NCLAT in its order dated 30.11.2017. The pproached the Hon’ble Supreme Court, which, in its order dated 08.01.2018, stayed the insolvency proceedings and -cum-Monitoring Committee. This committee comprised four members: IRP CA Devendra Jain, a SEBI Royal Twinkle Star Club Pvt.Ltd. 2 ITA Nos. 1430/MUM/2018 directed against separate Ld. Commissioner of [in short Ld. CIT(A)] for the respectively. We have noted the appearance of the learned representative in representative informed us that certain operational creditors had approached the National Company Law Tribunal (NCLT) to initiate a corporate insolvency resolution process against the assessee. The Hon’ble NCLT, Mumbai Bench, in its order dated 02.05.2017, suspended the board of directors of the assessee company and appointed Shri Devendra Jain, CA, as the Insolvency Subsequently, some investors challenged the NCLT order by filing an appeal before the Hon’ble National Company Law Appellate Tribunal (NCLAT), New Delhi. However, their appeals were dismissed by the NCLAT in its order dated 30.11.2017. The pproached the Hon’ble Supreme Court, which, in its order dated 08.01.2018, stayed the insolvency proceedings and Monitoring Committee. This committee comprised four members: IRP CA Devendra Jain, a SEBI representative, an investor re the assessee. The committee was tasked with asset valuation, liquidation, and the disbursal of funds to investors. 2.2 Upon reviewing the records, we find that the present appeals were filed on 07.03.2018, and Form No. filing an appeal before the ITAT) was signed and verified by the company’s directors, who had already been suspended. 2.3 Furthermore, the Hon’ble Supreme Court, through its order dated 06.05.2019, appointed Hon’ble Mr. Justice retired judge, to head the Sale 3. In light of the above facts, since the company was under a resolution process and controlled by the Sale Committee, the former management was not authorized to si verify the appeal filed on 07.03.2018. Therefore, the appeals are not maintainable in their present form. 3.1 The learned representative was informed, via the order dated 08.01.2025, that Form No. 36 had not been signed by a competent person and was thus required to be authorized individual from the Sale Consequently, the matter was adjourned from 08.01.2025 to 19.02.2025 and subsequently to 17.03.2025. adjournments, the learned repre Royal Twinkle Star Club Pvt.Ltd. ITA Nos. representative, an investor representative, and a representative of the assessee. The committee was tasked with asset valuation, liquidation, and the disbursal of funds to investors. Upon reviewing the records, we find that the present appeals were filed on 07.03.2018, and Form No. 36 (the prescribed form for filing an appeal before the ITAT) was signed and verified by the company’s directors, who had already been suspended. Furthermore, the Hon’ble Supreme Court, through its order dated 06.05.2019, appointed Hon’ble Mr. Justice J.P. Devadhar, a retired judge, to head the Sale-cum-Monitoring Committee. In light of the above facts, since the company was under a resolution process and controlled by the Sale-cum Committee, the former management was not authorized to si verify the appeal filed on 07.03.2018. Therefore, the appeals are not maintainable in their present form. The learned representative was informed, via the order dated 08.01.2025, that Form No. 36 had not been signed by a competent thus required to be resubmitted authorized individual from the Sale-cum-Monitoring Committee. Consequently, the matter was adjourned from 08.01.2025 to 19.02.2025 and subsequently to 17.03.2025. But adjournments, the learned representative did not submit a revised Royal Twinkle Star Club Pvt.Ltd. 3 ITA Nos. 1430/MUM/2018 presentative, and a representative of the assessee. The committee was tasked with asset valuation, Upon reviewing the records, we find that the present appeals 36 (the prescribed form for filing an appeal before the ITAT) was signed and verified by the company’s directors, who had already been suspended. Furthermore, the Hon’ble Supreme Court, through its order J.P. Devadhar, a Monitoring Committee. In light of the above facts, since the company was under a cum-Monitoring Committee, the former management was not authorized to sign and verify the appeal filed on 07.03.2018. Therefore, the appeals are not The learned representative was informed, via the order dated 08.01.2025, that Form No. 36 had not been signed by a competent resubmitted by a duly Monitoring Committee. Consequently, the matter was adjourned from 08.01.2025 to But, despite these sentative did not submit a revised Form No. 36 signed and verified by an authorized person. Instead, she insisted on accepting the form signed by the IRP. 3.2 In our view, the IRP is merely one member of the Sale Monitoring Committee and does not have appeal. Therefore, the representative was asked to provide a letter from the Sale-cum-Monitoring Committee authorizing the IRP to pursue the appeal. However, no such authorization was provided, except for a letter dated 13.03.202 current status of the Insolvency and Bankruptcy Code (IBC) proceedings. Given the lack of compliance, we find it appropriate to reject these appeals as non 3.3 The ld. representative cited t decision in the case of Gouri Kumari Devi (37 ITR 220), arguing that failure to sign a memorandum of appeal is a mere procedural irregularity that can be rectified through an amendment, effective from the original filing date precedent, we grant liberty to the assessee to either file fresh appeals, duly authorized by a competent person under the provisions of the Act, or to move an application for reviving the present appeals in their No. 36, properly signed and verified by an authorized individual, if so advised. Royal Twinkle Star Club Pvt.Ltd. ITA Nos. Form No. 36 signed and verified by an authorized person. Instead, she insisted on accepting the form signed by the IRP. In our view, the IRP is merely one member of the Sale Monitoring Committee and does not have sole authority to file the appeal. Therefore, the representative was asked to provide a letter Monitoring Committee authorizing the IRP to pursue the appeal. However, no such authorization was provided, except for a letter dated 13.03.2025 from the IRP, outlining the current status of the Insolvency and Bankruptcy Code (IBC) proceedings. Given the lack of compliance, we find it appropriate to reject these appeals as non-maintainable in their present form. representative cited the Hon’ble Patna High Court's decision in the case of Gouri Kumari Devi (37 ITR 220), arguing that failure to sign a memorandum of appeal is a mere procedural irregularity that can be rectified through an amendment, effective from the original filing date of the appeal. Respectfully following this precedent, we grant liberty to the assessee to either file fresh appeals, duly authorized by a competent person under the provisions of the Act, or to move an application for reviving the present appeals in their original numbers by filing a modified Form No. 36, properly signed and verified by an authorized individual, if Royal Twinkle Star Club Pvt.Ltd. 4 ITA Nos. 1430/MUM/2018 Form No. 36 signed and verified by an authorized person. Instead, she insisted on accepting the form signed by the IRP. In our view, the IRP is merely one member of the Sale-cum- sole authority to file the appeal. Therefore, the representative was asked to provide a letter Monitoring Committee authorizing the IRP to pursue the appeal. However, no such authorization was provided, 5 from the IRP, outlining the current status of the Insolvency and Bankruptcy Code (IBC) proceedings. Given the lack of compliance, we find it appropriate to maintainable in their present form. he Hon’ble Patna High Court's decision in the case of Gouri Kumari Devi (37 ITR 220), arguing that failure to sign a memorandum of appeal is a mere procedural irregularity that can be rectified through an amendment, effective of the appeal. Respectfully following this precedent, we grant liberty to the assessee to either file fresh appeals, duly authorized by a competent person under the provisions of the Act, or to move an application for reviving the original numbers by filing a modified Form No. 36, properly signed and verified by an authorized individual, if 4. In the result, all the three appeals of the assessee are dismissed. Order pronounced in the open Court on (MS. KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 19/03/2025 Disha Raut Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Royal Twinkle Star Club Pvt.Ltd. ITA Nos. In the result, all the three appeals of the assessee are Order pronounced in the open Court on 19/03/2025. Sd/- MS. KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Royal Twinkle Star Club Pvt.Ltd. 5 ITA Nos. 1430/MUM/2018 In the result, all the three appeals of the assessee are /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "