The Income Tax Appellate Tribunal (ITAT), Delhi bench held that no proceedings should be initiated when the National Company Law Tribunal (NCLT) granted a moratorium against corporate debtors under Section 14 of the Insolvency and Bankruptcy Code, 2016.
Hence, the bench dismissed the appeal filed by the revenue against the assessee.
The assessee, Rapid Buildwell Ltd., engaged in the business of renting and maintenance of immovable properties. After passing the assessment order of the assessee, the Assessing Officer (AO) noticed that unabsorbed depreciation amounting to Rs. 3,28,61,126/- had been wrongly allowed to the assessee. Accordingly, the assessee’s case was reopened, and the AO passed a reassessment order by reducing the loss to nil after disallowing the claimed depreciation of Rs. 3,28,61,126/- and the business loss of Rs. 1,36,48,632/-, claiming that the business was not set up during the Financial Year 2009-10, and the assets were not used for its business during AY 2010-11.
Aggrieved, the assessee filed a further appeal before the CIT(A), who deleted the disallowance made by the AO. Therefore, the Revenue is in appeal before the Tribunal.
During the proceedings, Ragini Vinaik, Counsel for the assessee, submitted that, according to the National Company Law Tribunal’s order on November 21, 2022, the assessee company has been admitted to the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code 2016.
Hence, Mr. Devrajan Raman has been appointed as the Interim Resolution Professional. On November 23, 2022, a public announcement about the admission of the corporate debtor to the CIRP was made in the Hindi and English newspapers Jansatta and Financial Express.
After reviewing the facts and records, the two-member bench of N.K. Billaiya (Accountant member) and Astha Chandra (Judicial Member) observed that NCLT has granted a moratorium against the institution of proceedings against the corporate debtor.
Thus, the bench dismissed the appeal of the Revenue by directing the Revenue that they shall be free to institute the appeal after the completion of the CIRP proceedings. Vivek Vardhan appeared for the revenue.
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