Suchi Paper Mills Limited Vs DCIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, allowed the assessee’s appeal and quashed reassessment proceedings initiated during the operation of a moratorium declared under the Insolvency and Bankruptcy Code, 2016 (IBC).
The case arose from reassessment proceedings for Assessment Year 2019-20, wherein a notice under Section 148 of the Income Tax Act, 1961 was issued on 11.04.2023. The assessee submitted that the Corporate Insolvency Resolution Process (CIRP) had already commenced and the National Company Law Tribunal (NCLT), by order dated 12.09.2022, had declared a moratorium under Section 14 of the IBC. The assessee also placed on record the NCLT order and a public notice published in a newspaper regarding the insolvency proceedings.
It was argued that once the moratorium came into effect, no fresh proceedings could be initiated against the company under the Income Tax Act. The assessee further contended that publication of the public notice was sufficient and no separate intimation to the Assessing Officer was required.
The Department opposed the appeal, submitting that the fact of insolvency proceedings before the NCLT had not been brought to the notice of either the Assessing Officer or the Commissioner (Appeals), and that this information was disclosed for the first time before the Tribunal.
