TaxTMI 
TaxTMI 
2024 (10) TMI 992
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.... "1). For that the Commissioner of Income Tax (Appeals) erroneously and/or perversely held that tax was deductible at source under Chapter XVII-B of the Income Tax Act, 1961 on the payment of management service fee of Rs. 3,52,76,000/- during the relevant assessment year 2009-10. 2) For that the Commissioner of Income Tax (Appeals) erred in disallowing the management service fee of Rs. 3,52,76,000/- under section 40(a)(ia) of the Income Tax Act, 1961. 3) For that without prejudice to the aforesaid the Commissioner of Income Tax (Appeals) failed to consider that since tax was deducted at source on the management services paid and the same was duly deposited within the due date, the deduction should have been allowed either in assessment year 2009- 10 or in the subsequent assessment year 2010-11. Royalty 4) For that the Commissioner of Income Tax (Appeals) erroneously and perversely held that tax was deductible at source under Chapter XVII-B of the Income Tax Act, 1961 on the provision for royalty of Rs. 1,02,87,073/- during the relevant assessment year 2009-10. 5) For that the Commissioner of Income Tax (Appeals) erred in disallowing the....
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....ear 2013-14 relevant to AY 2014-15 and that in case such expenditure is disallowed in computation of income for AY 2013-14, the same should be eligible for deduction in the subsequent year as expenditure incurred towards sale of land while computing capital gains as per Section 48 of the Income Tax Act, 1961. Initiation of penalty proceedings under section 271(1)(c) of the Act 7) For that, the Ld. CIT(A) has erred in treating the initiation of penalty proceedings under section 271(1)(c) of the Act as premature at this stage ignoring the fact that the Appellant has neither furnished inaccurate particulars of income nor concealed its income. That the Appellant craves leave to add, alter, supplements, amend, modify, substitute and/or rescind the grounds hereinabove before or at the time of hearing of this appeal. 3. We would first take up appeal for the Assessment Year 2009-10 which has been preferred by the assessee challenging the order dated 28.02.2018, passed by the Ld. CIT(A) whereby, inter alia, the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 31.03.2015, passed under Section 263/143(3) of the Income T....
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.... onset, the assessee wished to apprise the Bench it was recently acquired by Tega Group, pursuant to the order dated 24 February 2023 issued by the Hon'ble National Company Law Tribunal, Kolkata Bench ['NCLT'] under the Insolvency and Bankruptcy proceedings which are carried out under the Insolvency and Bankruptcy Code, 2016. Vide order sheet dated 22.01.2024, the Bench had ordered as under: The present appeals are filed by the assessee agitating certain disallowances made by the Assessing Officer. It is to be noted that during the pendency of the present appeals, the assessee company approached the National Company Law Tribunal (NCLT) for initiation of Corporate Insolvency Resolution Process and thereby, a moratorium had been declared by the NCLT u/s 14 of the Insolvency and Bankruptcy Code, 2016. The Id. Counsel for the assessee has further submitted that the insolvency resolution plan has been approved by the NCLT, Kolkata Bench, vide order dt. 24/02/2023 and thereafter, the company has been acquired by Tega Group. Now, the question which is genuinely raised in many appeals before us is that, at the time of initiation of insolvency and corporate insolvency resolutio....
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....liabilities gets extinguished after the approval of the resolution plan or whether the assessee/successor of the assessee company has got any right to press any claim against the Department after finalization of the resolution plan. It is also to be seen as to whether Section 178 of the Income Tax Act, 1961 (in short 'the Act'), covers the interim resolution professional appointed by the NCLT in the definition liquidator and if 50, and scope whether statutory taxes can of be recovered from such liquidator for non-performance of his duties as per the provision of Section 178 of the Act. The ld. D/R is directed to take up the matter with the higher authorities and get proper instructions in this respect. The ld. A/R is also directed to come prepared and address this bench on the above issues. Both the parties will be heard on the above issues on the next date of hearing. Case adjourned to 26/03/2024. Copy of this order be supplied to the parties free of cost. Ordered accordingly." 4.1 No further submissions were made on the subsequent dates of hearing. However, the Ld. AR filed a copy of the order dated 24th February, 2023 of the NCLT, Kolkata Bench, Cour....
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....ts and other dues from the Corporate Debtor to any person for the period prior to the Transfer Date, that is not expressly provided for in this Resolution Plan, including any claims from third parties relating to any contract entered into by the Corporate Debtor including damages on account of termination of such contracts pursuant to this Resolution Plan or claims which are in the nature of recovery, disgorgement, penalty, fees or recoupment of loss, shall be deemed to have been extinguished upon approval of this Resolution Plan, without any liability whatsoever on the Corporate Debtor or the Resolution Applicant. There are other reliefs and concessions mentioned in respect of suits, inquiries and investigations and also for the period prior to the transfer date, all noncompliance breaches and defaults of the corporate debtor shall be deemed to be waived by the concerned governmental authorities and immunity shall be deemed to have been granted to the corporate debtor from all proceedings and penalties under all applicable laws for any noncompliance for the period prior to the transfer date and no interest penal implications shall arise due to such noncompliance, default, breach p....
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....on 31 could be continued. 4.2 Further, as per section 238 of the Insolvency and Bankruptcy Code, 2016, the provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Thus, the IBC has overriding effects over other laws and hence the appellate proceedings pending in this Tribunal cannot continue and are liable to be dismissed on account of being infructuous and in violation of the provisions of the IBC after approval of the Resolution Plan by the NCLT, more so when the plan has not been disputed by the Revenue in any court of law and has attained finality. 5. Similar finding has been given in several judicial pronouncements in this regard. It has been held in the case of Maruti Koatsu Cylinders Ltd. v. Deputy Commissioner of Income-tax [2024] 165 taxmann.com 332 (Gujarat) that when the NCLT has approved the application filed under section 13(6) of IBC, 2016 and resolution plan submitted by the applicant was approved, the Assessing Officer would not have any jurisdiction to reopen the assessment with regard to the assessment year 2019....
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....provided for in the resolution plan alone shall remain payable and such position shall be binding on, among others, the Central Government and various authorities, including tax authorities. All dues which are not part of the resolution plan would stand extinguished and no person would be entitled to initiate or continue any proceedings in respect of any claim for any such due. No proceedings in respect of any dues relating to the period prior to the approval of the resolution plan can be continued or initiated. [Para 15] * In this clear view of the matter, there can be no manner of doubt that the Impugned Proceedings initiated by the revenue and sought to be defended as if they relate to liabilities that somehow emerge after the CIRP, are wholly misconceived and untenable. The resolution plan, upon its approval, brought a quietus to all claims pursued or capable of being pursued by the revenue against the petitioner for any operation prior to the CIRP. The stance of the revenue in the reply affidavit, namely, that if the tax claim amount had not been crystallised, would be future dues and not past dues, is totally untenable. Ghanshyam Mishra and Sons Private Limited v. Ed....
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....nel or other authority shall be prohibited during the moratorium period. [Para 9.1] * Further, it is found that section 31 of the IBC relates to approval of the resolution plan and in terms of section 31(1) of the IBC on approval, the resolution plan becomes binding on corporate debtor and its employees, members, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of payment of dues arising under any law for the time being in force. The Supreme Court in the matter of Ghanashyam Mishra & Sons (P.) Ltd. V. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC) [2021] 9 SCC 657 has considered the scope of section 31 (1) of the IBC and has held that once the resolution plan is sanctioned under section 31(1) of the IBC, the claims provided in the plan will stand frozen and all such claims which are not part of the plan will stand extinguished. [Para 9.2] * The law is well settled that on the approval of the resolution plan in terms of section 31 of the IBC, the dues including the statutory dues of the Government or local authority, if not part of the resolution plan, gets extingu....
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....(1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. At any rate, for the time being, this appeal cannot be proceeded with during the continuation of the proceedings under the Code. [Para 9.9] * However, depending upon the result of such proceedings before the adjudicating authority in respect of the corporate debtor, appropriate steps if any, may be taken by the assessee. Therefore, the leave is to be granted to the assessee to seek the restoration of the appeal, if necessitated by the orders in the CIRP. [Para 9.10] * The issue of limitation in filing fresh appeal, if need be, has already been dealt with by the Supreme Court in NDMC v. Minosha (India) Ltd. [2022] 138 taxmann.com 73/172 SCL 675/8 SCC 384 wherein on consideration of section 60(6) of the Insolvency and Bankruptcy Code, 2016, it was held that the entire moratorium period will be excluded in computing limitation in respect of proceedings at the hand of a corporate debtor. Howe....