2025 (7) TMI 865 - AT - Income Tax

Income tax proceedings against company dissolved/insolvent - HELD THAT - We find that provisions contained under section 238 of the Code are having an overriding effect over all other Central and State statutes including Income Tax Act as held by Hon ble Supreme Court in case of PCIT vs. Monnet Ispat and Energy Ltd. 2018 (8) TMI 1775 - SC ORDER by returning following findings - Given section 238 of the Insolvency and Bankruptcy Code 2016 it is obvious that the Code will override anything inconsistent contained in any other enactment including the Income Tax Act. Section 238 of the Code will have overriding effect over all other Central and State statutes including the Income Tax Act and all the claims including claim of the Income Tax Department under the Income Tax Act 1961 shall be entertained by the Official Liquidator u/s. 53(1) of the Code. In the background of the aforesaid factual matrix the captioned Appeals filed by the Revenue as well as Assessee have become infructuous and dismissed as such. However the Revenue as well as Assessee both are at liberty to approach the Tribunal for reinstitution of their respective appeals and the Tribunal shall consider such applications appropriately as per law.

Summary

The ITAT Delhi disposed of multiple appeals filed by both the Revenue and the Assessee relating to assessment years 2006-07, 2008-09, and 2011-12. The key issue was the initiation of the Corporate Insolvency Resolution Process (CIRP) against the assessee under the Insolvency and Bankruptcy Code, 2016 (IBC), pursuant to orders of the National Company Law Appellate Tribunal (NCLAT) and National Company Law Tribunal (NCLT).Relying on the Supreme Court's holding in PCIT vs. Monnet Ispat and Energy Ltd. (SLP (C) No. 6483 of 2018), the Tribunal emphasized that "section 238 of the Insolvency and Bankruptcy Code, 2016... will override anything inconsistent contained in any other enactment, including the Income Tax Act." Consequently, all claims, including those of the Income Tax Department under the Income Tax Act, 1961, are to be addressed exclusively by the Official Liquidator under section 53(1) of the IBC.Given this overriding effect, the Tribunal held the appeals filed by both parties as infructuous and dismissed them. However, both Revenue and Assessee were granted liberty to seek reinstitution of their appeals, which the Tribunal will consider in accordance with law. The order was pronounced on 07/05/2025.