ACIT Vs Tecpro System Ltd (ITAT Delhi)
The Income Tax Appellate Tribunal dismissed two appeals filed by the Revenue for assessment years 2011–12 and 2012–13 against an order of the Commissioner (Appeals), which had deleted additions relating to alleged bogus expenses and, for one year, undisclosed income. The assessee did not appear, and the Tribunal proceeded ex parte after hearing the Departmental Representative. During arguments, the Revenue pointed out that the National Company Law Tribunal (NCLT) had approved a resolution plan against the assessee on 15.05.2019 under Section 31 of the Insolvency and Bankruptcy Code, 2016.
After examining the record, the Tribunal held that once a resolution plan is approved by the NCLT under the IBC, parallel proceedings under the Income-tax Act cannot continue. The Tribunal observed that the approval of the resolution plan has the effect of overriding income-tax proceedings against the assessee. Relying on earlier Tribunal decisions and the Supreme Court ruling in Pr. CIT v. Monnet Ispat & Energy Ltd., the Tribunal reiterated that the Insolvency and Bankruptcy Code has an overriding effect over the Income-tax Act. Consequently, the Revenue’s appeals were held to be unsustainable and were dismissed.
However, the Tribunal granted liberty to the Revenue to file a miscellaneous application seeking recall of the order if, at any future stage, the assessee is declared to be outside the purview of insolvency proceedings under the IBC. The appeals were accordingly dismissed, and the order was pronounced on 16.01.2026.
