The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the provisions of IBC would override all the acts including the Income Tax Act 1961.
The Revenue filed an appeal against deleting the addition made by the A.O. The assessee, ABW Infrastructure Ltd. has filed appeal challenging that the Commissioner of Income Tax Appeals (CIT(A)) had upheld the certain additions made by the A.O
Kanv Bali, on behalf of the revenue submitted that a financial creditor had filed an Application under Section 7 of Insolvency and Bankruptcy Code 2016 against the assessee before the National Company Law Tribunal Principal Bench at New Delhi and judgement had been passed by the NCLT by allowing the application.
He further contended that the consequential appropriate order may be passed in the present appeal.
The Delhi Bench of Pradip Kumar Kedia (Accountant Member) Yogesh Kumar U.S(Judicial Member) dismissed both the appeal filed by assessee and revenue and referring to the case mentioned observing that the NCLT had admitted the Application filed u/s 7 of IBC Code, in terms of Section 14 of the IBC Code and consequent to the same the moratorium terms of Section 14(a), (b), (c) & (d).
The Bench held that no proceedings could be initiated against the corporate debtor, that is the assessee company including the present proceedings before this Tribunal, or the income tax proceedings and recovery of demand or giving effect of any order.
The Bench further observed that the IBC had an overriding effect on all the acts including Income Tax Act which has been specifically provided u/s 178(6) of the I.T. Act as amended w.e.f. 01.11.2016.In view of the moratorium declared by NCLT, all the proceedings in the Court of Law, Tribunal etc. could not continue in view of Amendment to Section 178(6) of the Act, therefore, no useful purpose was going to be served in continuing the present proceedings.
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