THREE C UNIVERSAL DEVELOPERS PRIVATE LIMITED,NEW DELHI V. PCIT(CENTRAL), DELHI

ITA 1955/DEL/2024

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23635 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2018-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPELLANT ASSESSEE; SUMAN MALIK
• Assessee Lawyers: RAKESH KUMAR GUPTA; RS.; A.Y.
• Keywords: Earning of tax free income
• Section: 143(3); 263; 139(1); 14A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’ NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 1955/Del/2024 (Assessment Year : 2018-19) Three C Universal Developers Pvt. Ltd. C-23, Greater Kailash Part-1, New Delhi – 110 048 PAN : AACCT 6175 E Vs. PCIT (Central) Central Circle – 6, Jhandewalan Extn. New Delhi – 110 055 (Appellant) (Respondent) Assessee by Shri Rakesh Kumar Gupta, C.A. Respondent by Ms. Suman Malik, CIT-D.R. Date of Hearing 23.01.2025 Date of Pronouncement 29.01.2025 O R D E R PER VIMAL KUMAR, JM: 1. The appeal filed by assessee is against the order dated 18.03.2024 of Learned Pr. Commissioner of Income Tax (Central) - Delhi-1 [hereinafter referred to as ‘Ld. Pr. CIT (Central)’] under section 263 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] arising out of assessment order dated 03.06.2021 passed by the Assessing Officer (hereinafter referred as ‘Ld. AO’) under section 143(3) of the Income Act for the Assessment Year 2018-19. -2- ITA No.1955/Del/2024 Three C. Universal Developers Pvt. Ltd. vs. Pr CIT (Central) A.Y. 2018-19 2. Brief facts of case are that appellant/assessee filed its return of income for A.Y. 2018-19 under section 139(1) of the Act on 31.10.2018 declaring an income of Rs. Nil. The scrutiny assessment under section 143(3) of the Act was completed on 03.06.2021 and the returned income of Rs. Nil was accepted. On perusal of record, it was observed that the assessee had made investment in equity shares as reflected from balance sheet but had not deducted any expense related to exempt income, though there was no dividend income. Show-cause notice dated 05.02.2024 was issued to the assessee to explain as to why proceedings under section 263 of the Act should not be initiated for non-disallowance of expenses under section 14A of the Act. Assessee filed reply dated 12.03.2024. Learned Pr. CIT (Central) vide order dated 18.03.2024, enhanced income of assessee by Rs.18,81,091/- for A.Y. 2018-19 on account of disallowance under section 36(1)(va) of the Act and directed the AO to re-computed total income and issue notice of demand. 3. Being aggrieved, appellant/assessee preferred present appeal. 4. Learned Authorized Representative for appellant/assessee submitted that Learned Pr. CIT (Central) has erred in passing order dated 18.03.2024 under section 263 of the Act in spite of declaration of the moratorium by the Hon’ble National Company Law Tribunal, New Delhi vide order dated 17.12.2019. -3- ITA No.1955/Del/2024 Three C. Universal Developers Pvt. Ltd. vs. Pr CIT (Central) A.Y. 2018-19 4.1 Learned Authorized Representative for the appellant/assessee also placed reliance on the judgment passed by the Co-ordinate Bench of Tribunal in the case of M/s Bhushan Steels Ltd. vs. ACIT ITA No. 1493/Del/2018 and Ors. 5. Learned Departmental Representative for the Department relied on the order of learned Pr. CIT (Central). 6. From examination of record in light of aforesaid rival contentions, it is crystal clear that appellant/assessee filed return of income for A.Y. 2018-19 under section 139(1) of the Act on 31.10.2018 declaring an income of Rs. Nil. The scrutiny assessment under section 143(3) of the Act was completed on 03.06.2021 and the returned income of Rs. Nil was accepted. In response to show- cause notice dated 05.02.2024, appellant/assessee in reply dated 12.03.2024 submitted that “the assessee company has been ordered for corporate Insolvency Resolution by the Hon. NCLT Bench 2, New Delhi vide its order dated 17.12.2019 and the undersigned has been appointed as its Resolution Professional. The CIRP process is underway and the Resolution Plan has been submitted to Hon. NCLT for its approval.” 6.1 A Co-ordinate Bench in ITA No.1493/Del/2018 titled as M/s. Bhushan Steel Ltd. vs. ACIT vide order dated 08.01.2025 has held that “8. Learned Departmental Representative for the Revenue could -4- ITA No.1955/Del/2024 Three C. Universal Developers Pvt. Ltd. vs. Pr CIT (Central) A.Y. 2018-19 not convert the factual position brought on record by the assessee. He, thus submitted that the appeal cannot be decided on this juncture on merits and the Assessing Officer has to take necessary steps to include itself as secured creditor before the Hon’ble NCLT against the tax liability arising in the present case. We have also perused the submissions advanced by both sides in the light of relevant provision under the Act as well as IBC Code. Section 14 of IBC Code is very clear on the aspect that once moratorium is drawn and the insolvency commencement date is declared any institution of suits or definition of pending suits or proceedings against the creditor, debtor (in the present facts of the case of assessee before us) including the execution of any judgment, decree, or order in any Court of law, Tribunal, Arbitration Resolution Plan/Process has been accepted by the NCLT. At this juncture, we refer to the decision of Hon’ble Supreme Court in the case of Ghanshyam Manz Retails Pvt. Ltd. Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Co. Ltd. reported in (2021) 126 Taxmann.com 132 wherein the Hon’ble Supreme Court has considered a situation wherein, the resolution plan was approved by the adjudicating authority under Section 31(1) of the IBC Code. Hon’ble Supreme Court observed that, once the resolution plan was drawn, the claim as provided in the resolution plan stood frozen, and will be binding on the corporate debtor, its employee, its members, creditors, Central Government and any State Government or legal authority, guarantor and other stakeholders. We also note that in the present facts of the case, the -5- ITA No.1955/Del/2024 Three C. Universal Developers Pvt. Ltd. vs. Pr CIT (Central) A.Y. 2018-19 resolution plan is yet to be finalized. When, we read the newly inserted provisions of Section 156A of the Act, it is necessary to remand the appeal to the Ld. AO to take necessary steps/action as per Rules.” 6.2 In the above material facts and circumstances as well as legal position, we deem it fit and proper to remand this appeal back to the file of learned Assessing Officer to take necessary steps as per section 156A of the Act. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on this day 29th January, 2025 Sd/- Sd/- (SHAMIM YAHYA) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29.01.2025 Pr i ti Y adav, S r. PS * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "