This case involves an appeal by United Artlogistics Private Limited against the order of the Learned Commissioner of Income Tax (Appeals)-9, New Delhi for the assessment year 2014-15, which was adjudicated by the ITAT, Delhi Bench.
The appeal primarily contested a disallowance made under section 40(a)(ia) of the Income Tax Act, 1961. However, significant developments occurred during the proceedings that impacted the case’s trajectory.
On June 1, 2023, United Artlogistics Pvt. Ltd. submitted that proceedings under Section 10 of the Insolvency and Bankruptcy Code, 2016, had been initiated, leading to a moratorium being granted by the National Company Law Tribunal on January 30, 2023. This order prohibited the continuation of any legal proceedings against the company, thereby affecting the maintainability of the current tax appeal.
The ITAT held that the appeal was not maintainable in its current format due to the insolvency proceedings. They dismissed the appeal but allowed the possibility for an Interim Resolution Professional to represent the company in future legal matters if deemed necessary.
The case highlights the intricate relationship between corporate insolvency proceedings and ongoing tax disputes, demonstrating how legal proceedings in one arena can significantly impact outcomes in another.
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