Income Tax Appellate Tribunal: The two-member bench of Pradip Kumar Kedia (Accountant Member), and Yogesh Kumar U.S. (Judicial Member) said that in view of moratorium declared by NCLT, all the proceedings in the Court of Law, Tribunal etc. cannot continue in view of Amendment to Section 178(6) of the IT Act, therefore, no useful purpose is going to be served in continuing the present proceedings.
The Revenue has filed an appeal for the Assessment year 2008-09 aggrieved by the order of the Commissioner of Income Tax (‘CIT’) dated 23-02-2018, wherein the CIT has deleted the addition made by the assessing officer (‘A.O’). The assessee filed an appeal for the Assessment Year 2013-14 aggrieved by the order dated 26-12-2017 passed by the CIT, wherein the CIT upheld the certain additions made by the A.O.
In the case ta hand, a financial creditor had filed an application under Section 7 of Insolvency and Bankruptcy Code ,2016 against the assessee before the National Company Law Tribunal (‘NCLT’) and the NCLT has admitted the application, in terms of Section 14 of the IBC Code and consequent to the same the moratorium terms of Section 14(a), (b), (c) and (d), certain prohibitions were imposed.
The Tribunal in view of these prohibitions said that no proceedings can be initiated against the corporate debtor, i.e., assessee company including the present proceedings before this Tribunal, or the income tax proceedings and recovery of demand or giving effect of any order, as it is well settled that, IBC has overriding effect on all the acts including Income Tax Act (‘IT Act’) which has been specifically provided under Section 178(6) of the IT Act as amended w.e.f. 01-11-2016.
The Tribunal, thus, said that in view of moratorium declared by NCLT, all the proceedings in the Court of Law, Tribunal etc. cannot continue in view of Amendment to Section 178(6) of the IT Act, therefore, no useful purpose is going to be served in continuing the present proceedings.
Therefore, the Tribunal dismiss both the appeals filed by the assessee and the Revenue as not maintainable. However, it granted liberty to the assessee/Revenue to seek remedial measures in accordance with law as and when the moratorium period is over or order of the NCLT is modified, revival of assessee company takes place or where it is necessary to do so in the interest of justice.
[ACIT v ABW Infrastructure Ltd, 2023 SCC OnLine ITAT 118, decided on 16-02-2023]
