TaxTMI 
TaxTMI 
2022 (4) TMI 782
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....such further or other orders as may be deemed fit and proper in the facts and circumstances of the case and thus render justice. In MA/1373/2019: a) Pass an Order granting Interim Stay over the Operation of the Order of Provisional Attachment dated 01.11.2019 made in file No. IO/PBPT/Senthil Paper & Boards/216, pending consideration of the above Application; b) Set aside the Order of Provisional Attachment dated 01.11.2019 made in file No. IO/PBPT/Senthil Paper & Boards/216 and c) Pass such further or other orders as may be deemed fit and proper in the facts and circumstances of the case and thus render justice. In MA/69/2020: a) Pass an Order granting Interim Stay over the Operation of the Assessment Order dated 31.12.2019 and the consequential Notice of Demand dated 31.12.2019, pending consideration of the above Application. b) Set aside the Assessment Order dated 31.12.2019 issued under Section 143(3) & 153A of the Income Tax Act, 1961 and the consequential Notice of Demand dated 31.12.2019 issued under Section 156 of the Income Tax Act, 1961. c) Pass such further or other orders as may be deemed fit and proper in the facts and circumstances of the case and thus ....
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....erein under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 to show as to why: a) The property being assets of the Corporate Debtor along with its paper mill running business and 15 MW Cogeneration Power Plant and 7,74,538 sq. ft. construction on land where the factory of the Corporate Debtor is situated should not be treated as benami property; and b) The property being the proportionate share of land owned by the Corporate Debtor out of total extent of 889.82 acres where the factory of the Corporate Debtor is located should not be treated as benami property. It is further averred that, in addition to the notice, the Respondent had also issued a Provisional Attachment Order dated 01.11.2019 under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988. 6. It is given in the written submissions of the Respondent that the following factual circumstances led to the issuance of the notice and provisional attachment Order: a) that upon a search action initiated under Section 132 of the Income Tax Act, 1961 in the year 2017 in the case of V.K. Sasikala & Ors. and based on the materials emanated during such search, information regardi....
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....rangements. The Security given for the above loans were all moveable and immovable assets of the Company and that mortgages were created on 02.11.2009, 18.11.2009 and 25.03.2013 i.e., before the alleged transfer of Rs. 400 Crore to the Promoters and that this indicates that the amounts received by the erstwhile director towards advance money against Sale of the shares of Senthil Papers and Boards Private Limited subject to settlement of Bank Loan of Rs. 200 Crore by the intending purchaser. 10. The Applicant states that during demonetization, there were no cash inflows into the Company either in the form of cash or cheque from the Promoters of the Company or others. This is clearly evidenced from the disclosure on Specified Bank Notes given by the Statutory Auditor in his report for FY 2016-17 filed with the Ministry of Corporate Affairs. The Applicant as the Liquidator has conducted independent Forensic Audit for the FY 2015-16 and 2016-17 wherein no cash inflows are seen. Further, the Applicant states that there is nothing to show that the Promoters brought in the money into the Corporate Debtor out of the said Rs. 400 Crore during the demonetization. 11. The Counsel for the 1s....
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....the Income Tax Ac, 1961, whereby Shri A Senthil Kumar, MD of the Company admitted on oath that they had received cash in Old High Denominations to the tune of Rs. 400 Crore through Shri Senthil, the Advocate towards the sale of the Company. Further, Shri O. Arumugasamy, the Director of the Company also admitted on oath that they had received Rs. 400 Crore from Shri S. Senthil, towards the sale of the company, by way of transfer of shares. Moreover, Shri M. palanisamy he Director of the Company had also admitted on oath that he had received the amount of Rs. 400 Crore from Smt. V.K. Sasikala through Shri S. Senthil, Advocate. iv. It is averred by the Counsel for the Respondents that the Application by the Liquidator seeking setting aside of the notice and provisional attachment along with the Assessment Order and Demand Notice is not maintainable as this Adjudicating Authority is not the appropriate forum to approach in an Application under Section 60(5) of the IBC, 2016. That the Prohibition of Benami Property Transaction Act, 1988 has specifically stipulated a process with respect to the attachment of property by constitution an adjudicating authority under Section 7 and laid d....
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....s approved by the CoC as on the date of the Provisional Attachment Order. Therefore, Section 32A(2) of the I & B Code will not apply to the Provisional Attachment Order passed by the respondent No. 1. Thus, the present application filed by the Resolution Professional on behalf of the Corporate Debtor is liable to be dismissed." vi. It is further averred by the Counsel for the Respondent that, the assessment conducted cannot be construed as a suit or legal proceeding for availing the protections under the provisions of IBC, 2016 as the Respondents has only conducted an assessment to determine the tax liability of the assessee and the order was passed to raise demand. 12. The Applicant has, in a written statement filed on 29.12.2021 relied on the judgment of the Hon'ble NCLAT in Company Appeal (AT) (Ins.) No. 575 of 2019 in the matter of the Directorate of Enforcement Vs. Sh. Manoj Kumar Agarwal & Ors. regarding the jurisdiction of this Adjudicating Authority, wherein, it was held that if any hindrance is being created by attachments or by taking over the possession, it would be a question of priority arising out of or in relation to the Insolvency resolution or liquidation pr....
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....e Counsels for both the Parties, and perused the documents on record including the judgments, memos and written statements. The Corporate Debtor was ordered for Liquidation vide Order dated 14.02.2019 by this Adjudicating Authority. It is seen from the Orders of the Respondents that the Provisional attachments were made on 01.11.2019. At this juncture it is pertinent to note that the period of moratorium starts with the initiation of the CIRP and ends in two circumstances: either on the commencement of Liquidation or upon the approval of a resolution plan. In the present case, the Liquidation period has commenced before the date of in which the provisional attachment was made which indicates that the Respondents herein had not acted in violation of the moratorium. Further, the question of violation of Section 32A does not arise at all as there is no sale of property of the Corporate Debtor consequent to any Resolution Plan. 17. Moreover, the provisional attachment made by the Respondents comes under the statute of Prohibition of Benami Property Transaction Act, 1988 which in itself has stipulated the due process with respect to attachment of property under Section 7 of the same. T....