Tribunal dismisses appeal citing Insolvency and Bankruptcy Code, allows recall, sets limitation guidelines.

The appeal filed by the assessee was dismissed by the Tribunal due to the commencement of liquidation proceedings under the Insolvency and Bankruptcy Code (IBC), which was found to have an overriding effect over the Income-tax Act. The Tribunal granted liberty to recall the order if necessary, with the issue of limitation in filing fresh appeals to be governed by a relevant Supreme Court judgment.

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Issues Involved:
1. Dismissal of the appeal by the Ld. CIT(A) on technical grounds without adjudicating on the merits.
2. Commencement of liquidation proceedings and the impact on the appellate proceedings.
3. Overriding effect of the Insolvency and Bankruptcy Code (IBC) over the Income-tax Act, 1961.
4. Application of section 178 of the Income-tax Act in the context of liquidation under IBC.
5. Dismissal of cross appeals by the Revenue and Assessee with liberty to recall the order.

Detailed Analysis:

1. Dismissal of the Appeal by the Ld. CIT(A) on Technical Grounds:
The appeal was filed by the assessee challenging the order of the Ld. CIT(A)-22, Kolkata, which dismissed the appeal in limine on technical grounds without adjudicating on the merits. The assessee sought the restoration of the matter to be decided de novo in terms of the Income-tax Act, 1961.

2. Commencement of Liquidation Proceedings:
During the appellate proceedings, it was noted that the assessee company was undergoing liquidation as per the order dated 11.01.2018 passed by the National Company Law Tribunal (NCLT), Kolkata Bench. Mr. Sumit Binani was appointed as the liquidator. The liquidator requested to keep the appellate proceedings in abeyance, citing section 33(5) of the IBC, which states that no suits or other legal proceedings shall be initiated against the corporate debtor once a liquidation order has been passed.

3. Overriding Effect of the IBC Over the Income-tax Act:
The judgment highlighted that in cases of parallel proceedings under the Income-tax Act, 1961, and the IBC, 2016, the IBC has an overriding effect. This principle was affirmed by the Hon'ble Apex Court in Principal Commissioner of Income-tax Vs Monnet Ispat & Energy Ltd. [2019] 107 taxmann.com 481, where it was observed that as per section 238 of the IBC, the IBC Code will override anything inconsistent contained in any other enactment, including the Income-tax Act.

4. Application of Section 178 of the Income-tax Act:
Section 178 of the Income-tax Act, which deals with the obligations of the liquidator, has been amended to prevent any conflict with the provisions of the IBC. The section mandates that the liquidator must notify the Income-tax Officer of their appointment and set aside an amount for tax liabilities. However, the provisions of section 178 are subject to the overriding effect of the IBC.

5. Dismissal of Cross Appeals:
The Tribunal dismissed the cross appeals filed by the Revenue and the Assessee, granting liberty to the appellants or the Official Liquidator to recall the present order if necessary. The issue of limitation in filing a fresh appeal will be governed by the decision of the Hon'ble Supreme Court in New Delhi Municipal Corporation vs Minosha India Ltd. [2022] 138 taxmann.com 73.

Conclusion:
The appeal filed by the assessee was dismissed due to the commencement of liquidation proceedings under the IBC, which has an overriding effect over the Income-tax Act. The Tribunal provided the liberty to recall the order if the occasion warrants, with the issue of limitation in filing fresh appeals being governed by the relevant Supreme Court judgment.

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