The Income Tax Appellate Tribunal (ITAT), Hyderabad bench has held that the income tax appeal is not maintainable during the pendency of Insolvency and Bankruptcy Code (IBC) proceedings.
The assessee was represented by Shri P. Murali Mohan Rao and the revenue was represented by Shri Solge Jost Kottaram.
The Corporate Insolvency Resolution Proceedings (CIRP) are pending against the assessee, M/s. Neueon Towers Limited and National Company Law Appellate Tribunal (NCLAT) seized the jurisdiction.
Under section 13 of the Code, the adjudicating authority after admission of the application under sections 7 or 9 or 10 of the Code shall declare a moratorium which shall include the prohibition of the institution of suits or continuation of pending suits or proceedings against the corporate debtor in any court of law or tribunal.
In Ghanashyam Mishra and Sons (supra) and provisions under section 13 and 14 of the Code states that once the proceedings have commenced by the institution of an application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings was prohibited.
When, once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under subsection (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.
It was observed that the appeal cannot be proceeded with during the continuance of the proceedings under the Code.
While dismissing the appeal of revenue, Shri Rama Kanta Panda, accountant member & Shri K Narasimhachary, judicial member held that 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 appellant/respondent.
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