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of <h1>Appeals Dismissed as Infuctuous Due to Moratorium Order Under IBC 2016; Reinstatement Possible Post-Resolution.</h1> The ITAT dismissed all nine appeals by both the assessee and the revenue as infructuous due to the NCLT's moratorium order under IBC, 2016, which halted ... Assessment against company dissolved/insolvent - proceedings initiated against the corporate debtor/assessee company including income tax proceedings and recovery of demand or giving effect of any order - Addition u/s 68 - HELD THAT:- In the light of the above order by Hon’ble NCLT in the assessee’s own case for its CIRP as per Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016, no proceedings can continue against the corporate debtor i.e. the assessee. In view of this and drawing further force from the order of coordinate bench in the case of Real Steps Ltd. [2021 (7) TMI 1445 - ITAT AHMEDABAD] all these nine appeals before this Tribunal filed by the assessee/Department are dismissed as infructuous. However, ld. AO is at liberty to make an application for reinstitution of these appeals after the resolution process ends in IBC 2016. Accordingly, the appeals of the assessee and the Department (totaling nine in numbers) are dismissed as infructuous. Issues:Cross-appeals by revenue and assessee against CIT(A) orders for AYs 2007-08 to 2013-14 under IT Act, 1961. Initiation of proceedings under Insolvency & Bankruptcy Code, 2016 (IBC, 2016) impacting assessment. Unsecured loans and share application money treated as undisclosed income under Section 68 of the Act.Analysis:The judgment pertains to cross-appeals by the revenue and the assessee against orders of the CIT(A) for various assessment years under the Income-tax Act, 1961. The proceedings were initiated under the Insolvency & Bankruptcy Code, 2016 (IBC, 2016), affecting the assessment process. The assessee, a reseller of timber and wood products, faced issues related to unsecured loans and share application money treated as undisclosed income under Section 68 of the Act following a search and seizure operation conducted at its premises and other group companies.The order sheet indicated that the proceedings against the company were initiated under the IBC, 2016, with the National Company Law Tribunal (NCLT) ordering a moratorium, prohibiting legal actions against the corporate debtor. An interim resolution professional was appointed to oversee the resolution process. The Tribunal considered these facts and decided to address the matter based on the material available.Additionally, the Tribunal referred to a decision by a Coordinate bench of ITAT, Ahmedabad, in a similar case, emphasizing the impact of the NCLT's order on the ongoing proceedings. Citing the NCLT's moratorium order and the ITAT decision, the Tribunal dismissed all nine appeals as infructuous, allowing the Assessing Officer to seek reinstatement of the appeals post the resolution process under IBC, 2016. Consequently, all appeals by both the assessee and the Department were dismissed.In conclusion, the Tribunal's decision was influenced by the NCLT's moratorium order under the IBC, 2016, which halted proceedings against the corporate debtor. The dismissal of the appeals as infructuous was based on the legal constraints imposed by the ongoing resolution process, with the possibility of reinstatement post the resolution's conclusion.
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