Case Law Details
Kaushal Silk Mills Pvt. Ltd. Vs ITO (ITAT Mumbai)
Introduction: The case of Kaushal Silk Mills Pvt. Ltd. vs ITO, adjudicated by ITAT Mumbai, delves into the legal complexities surrounding appeals during a moratorium under section 14 of the IBC (Insolvency and Bankruptcy Code). This article analyzes the key arguments, rulings, and implications of the case.
Detailed Analysis: The appellant, Kaushal Silk Mills Pvt. Ltd., contested the reopening of its assessment under section 147 by the AO (Assessing Officer). Central to the appeal were contentions regarding the validity of the reassessment and the addition made by the AO based on alleged bogus purchases. The CIT (A) upheld the AO’s decision, prompting the appellant to approach the ITAT.
However, the ITAT’s analysis highlighted a crucial development: the initiation of Corporate Insolvency Resolution Process (CIRP) against Kaushal Silk Mills Pvt. Ltd. by the NCLT (National Company Law Tribunal), Mumbai. The NCLT’s order invoked a moratorium under section 14 of the IBC, imposing restrictions on legal proceedings against the corporate debtor.
Citing the NCLT’s order, the ITAT concluded that the appeals before it were not maintainable during the moratorium. It emphasized the need for appeals to be filed by the Interim Resolution Professionals (IRP), duly approved by the committee of creditors. Since no representation was made by the IRP, the appeals were deemed non-maintainable.
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