2023 (5) TMI 216 - AT - Income Tax

Revenue appeal dismissed due to insolvency process precedence.

The appeal filed by the Revenue against the penalty under section 271(1)(c) of the Income Tax Act was dismissed as infructuous. The Assessee did not ... Penalty u/s 271(1)c) - assessee company has gone under liquidation - whether liquidation proceedings have over riding effect over the claim of the revenue - HELD THAT:- The record shows corporate Insolvency Resolution Process is pending before NCLT after order dated 14.11.2017. In assessee’s own case Hon’ble Supreme Court while deciding Civil Appeal [2020 (7) TMI 760 - SC ORDER] disposed of the appeals without adjudicating anything on merits. Thus, in the light of provisions of Insolvency and Bankruptcy Code, 2016 and the aforesaid orders in the case of assessee, the claim of revenue arising out of the proceedings under the Act have become infructuous. In the light of aforesaid, the appeal and cross objection are dismissed being infructuous. Issues involved: Appeal against penalty u/s 271(1)(c) of the Income Tax Act due to company liquidation.Summary:The appeal was filed by the Revenue against the order of CIT(A)-XXI, New Delhi regarding penalty u/s 271(1)(c) of the Income Tax Act. The Assessee did not appear as the company had gone into liquidation. The Liquidation Authority was represented by the Ld. AR. The Insolvency Resolution Process was pending before NCLT. Various court orders, including those of the Supreme Court and Delhi High Court, held that liquidation proceedings override revenue claims, rendering the appeals non-consequential. The appeal and cross objection were dismissed as infructuous based on the Insolvency and Bankruptcy Code, 2016, and previous court orders in the case of the assessee.The appeal was dismissed as infructuous due to the company's liquidation and the precedence of liquidation proceedings over revenue claims as established by various court orders.