Income Tax Appeal not maintainable during IBC proceedings

Income Tax Appeal not maintainable during IBC proceedings

Rejecting the appeal of the assessee, the bench granted leave to seek the restoration

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that an appeal is not maintainable during Insolvency and Bankruptcy Code (IBC), 2016 proceedings.

The assessee, Gayatri Projects Limited challenged the orders passed by the Commissioner of Income Tax (Appeals), even as the Corporate Insolvency Resolution Proceedings (CIRP) were pending against it.

The tribunal analyzed the provisions under IBC, along with the decision in Ghanashyam Mishra and Sons case.

It became evident that once the proceedings had commenced, the continuance of the pending proceedings was prohibited. Once they reached a logical conclusion, with due approval of the resolution plan by the adjudicating authority (AA), the claims as provided in the resolution plan stood frozen.

IBC stated that if a resolution plan was approved and the AA was satisfied, the plan would be binding upon employees, members, creditors, guarantors, and other stakeholders involved in the resolution plan.

The Coram of Laliet Kumar (judicial member) and Rama Kanta Panda (accountant member) observed that the appeals could not be proceeded with during the continuance of the proceedings under IBC.

The bench granted leave to seek the restoration of the appeal if necessitated by the orders in the CIRP and the appeal of the assessee was dismissed.

While the assessee was represented by advocate R. Mohan Kumar, the revenue department was advised by advocate Rajendra Kumar.