VARUN RESOURCES LIMITED,MUMBAI V. ACIT-5(3)(1), MUMBAI, MUMBAI

MA 282/MUM/2024

AI Insights

The case involves Varun Resources Limited, a company under the control of the Official Liquidator, which faced a penalty under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2016-17. The Revenue appealed against the order of the CIT(A), which arose from this penalty. The Tribunal initially passed an order ex parte, restoring the matter to the CIT(A). However, the Official Liquidator, not having received notice of the hearing due to the company's liquidation status, filed a Miscellaneous Application seeking recall of this order. The Tribunal dismissed the application, noting that the penalty demand was not enforceable against the company as its liabilities were frozen under the Companies Act, 2013, specifically section 279.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714699 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2016-2017
• Other Referred Cases: ACIT v/s Varun Resources Ltd
• Laws Referred To: Income Tax Act, 1961, Companies Act, 2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUNKHE
• Assessee Lawyers: HARIDAS BHATT
• Keywords: TDS
• Section: 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER MA No.282/MUM/2024 (Arising out of ITA No.1294/MUM/2024) (Assessment Year : 2016–17) Varun Resources Limited, Laxmi Building 6, Shoorji Vallabhdas Marg, Mumbai, GPO Mumbai Mumbai - 400001 PAN- AAECR9929E ……………. Applicant (Original Respondent) v/s ACIT – 5(3)(1) Room No.573, 5th Floor, Aaykar Bhavan, M.K. Road, Churchgate, Mumbai - 400020 …………….Respondent (Original Appellant) Assessee by : Shri Haridas Bhatt Revenue by : Shri Pravin Salunkhe, Sr. DR Date of Hearing – 18/07/2025 Date of Order – 07/08/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The Official Liquidator of the assessee has filed the present Miscellaneous Application under section 254(2) of the Income Tax Act, 1961 (\"the Act\") seeking recall of the order dated 14/06/2024 passed by the coordinate bench of the Tribunal in the Revenue’s appeal being ITA No. 1294/Mum./2024, for the assessment year 2016-17. Printed from counselvise.com MA No.282/MUM/2024 (A.Y. 2016-17) 2 2. In the present Miscellaneous Application, it is submitted that the Revenue filed the appeal before the Tribunal against the order dated 24/01/2024 passed by the learned CIT(A), which in turn arose from the penalty order dated 10/02/2022 passed under section 271(1)(c) of the Act. Further, it is submitted that while filing the appeal, the Revenue mentioned the address of the company, which is redundant, as the company is in the control of the Official Liquidator, who was not informed of this appeal. Thus, it is claimed that no notice of hearing was received either by email or by physical post, and no opportunity of hearing was granted. Therefore, the Tribunal passed the order ex parte without hearing the assessee and restored the matter to the file of the learned CIT(A). 3. Before proceeding further, it is relevant to note the provisions of section 279 of the Companies Act, 2013, which reads as follows: – “Section 279. Stay of suits, etc., on winding up order. Previous Next (1) When a winding up order has been passed or a provisional liquidator has been appointed, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, by or against the company, except with the leave of the Tribunal and subject to such terms as the Tribunal may impose: Provided that any application to the Tribunal seeking leave under this section shall be disposed of by the Tribunal within sixty days. (2) Nothing in sub-section (1) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.” 4. Therefore, as per the aforesaid section, when a winding up order has been passed, no suit or other legal proceedings shall be commenced by or against the company except with the leave of the Hon’ble NCLT and subject Printed from counselvise.com MA No.282/MUM/2024 (A.Y. 2016-17) 3 to such terms as the Hon’ble NCLT may impose. Neither from the perusal of the present Miscellaneous Application nor from the perusal of the affidavit executed by the Official Liquidator in support of the present Miscellaneous Application, it is evident that such leave as required under the provisions of section 279 of the Companies Act, 2013 was sought from the Hon’ble NCLT prior to filing the present Miscellaneous Application. 5. Be that as it may, during the hearing, the learned Authorised Representative (“learned AR”) submitted that on 03/09/2024, the coordinate bench of the Tribunal in ACIT v/s Varun Resources Ltd, in ITA No. 3050- 3052/Mum./2024, for the assessment year 2013-14, 2015-16 and 2017-18, dismissed the Revenue’s appeals after taking into consideration the affidavit filed by the Official Liquidator before the Hon’ble NCLT regarding the list of stakeholders. From the perusal of the aforesaid order, we find that the coordinate bench took into consideration the following claim of stakeholders, which was submitted by the Official Liquidator vide its affidavit dated 22/01/2024 before the Hon’ble NCLT: - Form C,D,E,F,G claim status up to 22.01.2024 Sr. No. Form No. Particulars Total no. of claims Received Total no. of claims as per books No. of claims Accepted No. of claim rejected Total Amount claimed Total Amount Admitted 1 Form C Operational 4 317 321 - 2,15,96,20,495 2,15,96,20,495 2 Form D Financial 14 NA 13 1 36,22,74,32,362 34,84,96,61,779 3 Form E Employees 46 NA 44 2 8,84,17,087 8,72,13,429 4 Form F AR of Workmen 1 NA 1 - 34,51,34,000 34,51,34,000 5 Form G Others (statutory) 4 NA 4 - 28,71,01,950 28,71,01,950 Total 69 317 383 3 39,10,77,05,894 37,75,87,31,653 Printed from counselvise.com MA No.282/MUM/2024 (A.Y. 2016-17) 4 Annexure – V : Claims by any Other Stakeholder Sr. No. Name Nature of Dues Amount Claim Amt. Category Claims received after submission of stakeholders 1 Officer of the Assistant Commissioner of CGST, Division –V, Mumbai South Commissionerate Statutory Claims 1,31,79,740 53(1)(e)(i) 2 Office of the Income Tax Officer (TDS)- (2)(3)(3) Varun Shipping Co. (F.Y. 07-08 & 14-15) 25,30,09,178 VGIL (12-13 & 14- 15) 1,56,53,219 Varun Resources (F.Y. 15-16, 16-17 & 17-18) 9,50,500 26,96,12,897 53(1)(e)(i) 3. Office of State Tax Officer, GST, Mumbai, Maharashtra RCM 9,67,284 53(1)(e)(i) 4. Assistant / Commissioner of Customs, Custom House, Kakinada, Andhra Pradesh Interest 33,42,029 33,42,029 53(1)(e)(i) Total 28,71,01,950 Note: Apart from the claims mentioned above, no other claims have been received from the operational creditors/employees and other stakeholders (if any) of the Corporate Debtor. Further, necessary modification shall be done in the above- mentioned list of stakeholders in case of any fresh/modified claim received from any stakeholder, subject to approval of NCLT or otherwise.” 6. After taking into consideration the aforesaid details, the coordinate bench noted that only the demand pertaining to TDS forms part of the claim put forth by the Official Liquidator before the Hon’ble NCLT. Accordingly, since no other claim against the assessee was raised by the Revenue, the coordinate bench held that the appeals by the Revenue against any other demand have been rendered infructuous since the Revenue cannot raise such demand against the assessee which has already been frozen pursuant to the affidavit dated 22/01/2024 filed by the Official Liquidator Before the Hon’ble NCLT. Printed from counselvise.com MA No.282/MUM/2024 (A.Y. 2016-17) 5 7. Therefore, coming to the facts of the present case, it is pertinent to note that even though the coordinate bench of the Tribunal vide its order dated 14/06/2024 has restored the matter to the file of the learned CIT(A), however, the fact remains that only the demand pertaining to TDS for the assessment year under consideration, i.e. 2016-17, can be claimed against the assessee and the penalty demand raised under section 271(1)(c) of the Act, resulting in the present proceedings cannot be claimed against the assessee as the liability against the assessee has already been frozen pursuant to the affidavit dated 22/01/2024 filed by the Official Liquidator containing the claim of the stakeholders before the Hon’ble NCLT. Therefore, we are of the considered view that the entire appellate process against the penalty demand raised under section 271(1)(c) of the Act for the year under consideration is nothing but academic, even if the matter is restored to the file of the learned CIT(A), and thus, is infructuous. Therefore, despite the fact that the coordinate bench passed the order dated 14/06/2024 ex parte qua the assessee, no such prejudice is quashed to the assessee, as the penalty demand under section 271(1)(c) of the Act is not part of the claim raised by the Revenue before the Hon’ble NCLT and thus cannot be enforced against the assessee. If the assessee deems it necessary, such development can also be pointed out before the learned CIT(A) in the remand proceedings merely for the sake of completion of facts. 8. Accordingly, in view of the facts and circumstances as noted above, we do not find any merit in the present Miscellaneous Application, and the same is dismissed. Printed from counselvise.com MA No.282/MUM/2024 (A.Y. 2016-17) 6 9. In the result, the present Miscellaneous Application is dismissed. Order pronounced in the open Court on 07/08/2025 /- Sd/- NARENDRA KUMAR BILLAIYA ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 07/08/2025 Prabhat Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. Copy By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "