The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) ruled that no appeal should be filed when moratoriums under Section 14 of Insolvency and Bankruptcy Code ( IBC )are issued by the National Company Law Tribunal for initiation of the Corporate Insolvency Resolution Process ( CIRP ) against Corporate Debtors.
The Assessee Kaushal Silk Mills Pvt. Ltd.is into the business of dyeing and processing of textile products and trading. Return of income filed by the assessee was processed under section 143(1) of the Income Tax Act.
Subsequently on the basis of information received from Directorate General of Income Tax ( investigation ) [ DGIT )( Inv. ) ], Mumbai that a search and seizure action was carried out in the case of Shri Pravin Kumar Jain. He had admitted that his only activity is to provide accommodation entries for bogus investments/share applications, long term capital gains, unsecured loans, bogus sales bills etc. and the assessee is one such beneficiary to the tune of Rs.5,00,60,229/-
Accordingly assessee’s case was reopened by initiating the proceedings under section 147/148 of the Act. The Assessing Officer ( AO ) after declining the contentions raised by the assessee made an addition of Rs.62,57,530/- being 12.5% of the bogus purchases of Rs.5,00,60,229/
Aggrieved by the assessment order assessee file appeal before the CIT(A), who disallowed the appeal. Therefore the assessee filed another appeal before the tribunal.
During the adjudication the tribunal observed that National Company Law Tribunal ( NCLT ), Mumbai passed the order in case of appellant namely M/s. Kaushal Silk Mills Pvt. Ltd. The order was initiation of Corporate Insolvency Resolution Process against the assessee.
Therefore since proceedings under I&B code have already been initiated/decided and moratorium has been declared by prohibiting all the proceedings against the corporate debtors including execution of any judgment, decree or order of any court of law, tribunal, arbitration panel or other authority, present appeals in the present format are not maintainable
After reviewing the submissions of both parties the two-member bench Of Kuldip Singh, ( Judicial Member ) and Padmavathy S, ( Accountant Member ) dismissed the appeal filed by the assessee.
Teena Jain Advocates appeared for assessee and P.D. Chougule appeared for revenue.
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