EMI Transmission Limited Vs DCIT (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) disposed of a batch of appeals filed by the assessee for Assessment Years 2011-12 to 2018-19, holding that they had become infructuous in view of subsequent developments under the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal found that the issue of maintainability and survivability of the appeals had to be decided before examining the merits of the additions sustained by the Commissioner of Income Tax (Appeals).
The record showed that an application under Section 7 of the IBC was admitted by the NCLT on 11.04.2019, commencing the Corporate Insolvency Resolution Process (CIRP). After no viable resolution plan was approved by the Committee of Creditors, the Corporate Debtor was ordered to be liquidated under Section 33 of the IBC by the NCLT on 14.08.2020, and a Liquidator was appointed under Section 34. During liquidation, the Corporate Debtor was offered for sale as a going concern under Regulation 32(e) read with Regulation 39C of the Liquidation Process Regulations. The successful bidder acquired the Corporate Debtor for ₹6.60 crore, and the sale was confirmed in accordance with the IBC framework.
The Tribunal noted that the NCLT, by its order dated 08.12.2023, examined the liquidation process, the statutory framework governing sale as a going concern, and the terms of the auction. It accepted that liabilities relating to the period prior to the transfer were to be dealt with through the liquidation mechanism in accordance with Section 53 of the IBC. The NCLT further directed that investigations, inquiries, assessments, notices and other proceedings relating to the pre-transfer period should not continue against the Corporate Debtor or its successors after the transfer. Subsequently, by order dated 15.05.2024, the NCLT recorded completion of the liquidation process, distribution of sale proceeds under Section 53, and formally closed the liquidation proceedings. The Tribunal also noted that these NCLT orders had neither been stayed nor set aside by any appellate forum.
