ACIT Vs Delhi Control Devices Private Limited (ITAT Delhi)
In ACIT Vs Delhi Control Devices Private Limited, the Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 24 July 2025 concerning Assessment Year (AY) 2018–19. The reassessment order had been passed on 1 March 2024 under sections 147 read with 144B of the Income Tax Act, 1961.
The Revenue challenged the CIT(A)’s decision on several grounds, arguing that the reassessment proceedings were wrongly held invalid merely because they were initiated during the pendency of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). The Revenue contended that reassessment proceedings had been initiated only to quantify and crystallize tax liability and not for recovery, and that CIRP does not bar the initiation or continuation of reassessment proceedings under sections 147 and 148 of the Act. It further argued that the CIT(A) had incorrectly relied on judicial precedents, including the judgment in Patanjali Foods Ltd. v. Principal Commissioner of Income Tax (Central), which, according to the Revenue, was distinguishable from the present case.
During the proceedings, the Departmental Representative also relied on a decision of the ITAT Mumbai Bench in DCIT v. Naren Shah Resolution Professional of Jaybharat Textile & Real Estate Ltd.. In that case, the Tribunal had observed that appellate proceedings before the ITAT relate only to the determination of tax liability and do not fall within the scope of the moratorium under section 14 of the IBC, as the restriction applies primarily to recovery proceedings. The Revenue also referred to observations regarding the requirement that claims be lodged before the Resolution Professional or Liquidator in accordance with the mechanism prescribed under the IBC.
