The Income Tax Appellate Tribunal, Delhi Bench opined that the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) overrides every other Act including the Income Tax Act, 1961 (hereinafter referred to as the “Act”).
It was observed that a financial creditor filed an application under Section 7 of the IBC against the Assessee Company and such an application has been allowed by the NCLT. Further, a moratorium has been imposed. Hence, it was held that no proceedings could be initiated against the Corporate Debtor (Assessee Company).
Brief Facts:
The present appeals have been filed by the Revenue (Assessment Year 2008-09) and Assessee (Assessment Year 2013-14) against the order passed by the Commissioner of Income Tax.
Contentions of the Revenue:
It was contended that the assumption of jurisdiction under Section 47 of the Act is not illegal.
Contentions of the Assessee:
It was argued that the orders were passed without providing an opportunity for a hearing and hence, principles of natural justice have been violated. It was contended that it was not for the Appellant to explain the source of the creditor. The basis on which the sum received had been classified as unexplained credit under Section 68 of the Act was misconceived.
Observations of the Tribunal:
It was observed that a financial creditor filed an application under Section 7 of the IBC against the assessee company and such an application has been allowed by the NCLT. Further, a moratorium has been imposed. Therefore, no proceedings could be initiated against the Corporate Debtor (assessee company). It was opined that IBC overrides every other Act including the Income Tax Act.
The decision of the Tribunal:
Based on the findings, both the Appeals were dismissed in limine.
Case Title: ABW Infrastructure Ltd. V. ACIT
Coram: Shri Pradip Kumar Kedia (Accountant Member), Shri Yogesh Kumar U.S. (Judicial Member)
Case No: I.T.A. Nos. 1063/Del/2018 & 2861/del/2018
Advocate for Department: Shri Kanv Bali, CIT D.R.
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