Case Number: ITA 644/DEL/2019
Appellant: Metenere Ltd., Delhi
Respondent: ACIT, Central Circle-17, New Delhi
Assessment Year: 2012-13
Result: Dismissed as Not Maintainable
Case Filed On: 2019-01-29
Order Type: Final Tribunal Order
Date of Order: 2021-11-11
Pronounced On: 2021-11-11
The case of Metenere Ltd vs ACIT in the Income Tax Appellate Tribunal (ITAT) for the assessment year 2012-13 revolves around the dismissal of the appeal due to ongoing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016. This article provides an in-depth analysis of the case, the proceedings, and the final judgment that led to the dismissal of the appeal as not maintainable.
Metenere Ltd., the appellant in this case, had filed an appeal against the order of the learned Commissioner of Income Tax (Appeals)-28, New Delhi [CIT(A)], dated 12.01.2018, for the assessment year 2012-13. The dispute arose due to certain additions and disallowances made by the Assessing Officer (AO) during the assessment proceedings. The assessee, dissatisfied with the CIT(A)’s order, filed an appeal with the ITAT.
The appeal was heard by the ITAT Bench ‘I-1’, New Delhi, comprising Shri Prashant Maharishi, Accountant Member, and Shri K.N. Chary, Judicial Member. The hearing was conducted through video conferencing due to the ongoing pandemic restrictions. The case was heard and the order was pronounced on 11.11.2021.
The appellant, Metenere Ltd., moved an adjournment application stating that the company is under the Corporate Insolvency Resolution Process (CIRP). The State Bank of India had filed an application before the National Company Law Tribunal (NCLT) under Section 7 of the Insolvency & Bankruptcy Code (IBC), 2016, and Mr. Surender Raj Gang was appointed as the Resolution Professional. The date of commencement of insolvency was 25th September, 2020.
The Departmental Representative (DR), Shri Surender Pal, vehemently opposed the adjournment application, arguing that the appeals were filed by the Directors of the company, who no longer have the locus standi to prosecute the appeals after the commencement of the CIRP. According to the DR, the Interim Resolution Professional (IRP) should file the appeal with the consent of the Committee of Creditors.
After considering the submissions and examining the material on record, the ITAT found that the insolvency process under IBC, 2016 had commenced on 25th September, 2020, and was still in progress. The Tribunal noted that the Directors of the company no longer have the locus standi to file or prosecute appeals once the IRP process starts. Consequently, the appeals filed by the Directors were not maintainable. However, the Tribunal granted liberty to the IRP to file these appeals if the Committee of Creditors decides so, either by filing fresh appeals with a request for condonation of delay or by making an application for recall of the order.
In conclusion, the ITAT’s decision in the case of Metenere Ltd vs ACIT for the assessment year 2012-13 highlights the procedural implications of insolvency proceedings on ongoing tax disputes. The dismissal of the appeal as not maintainable underscores the importance of proper representation during the Corporate Insolvency Resolution Process under the IBC, 2016. This case serves as a reference for similar disputes, emphasizing the necessity of adhering to the legal framework governing insolvency and bankruptcy proceedings.
Order pronounced in the open court on 11.11.2021 by the Judicial Member Shri K.N. Chary and the Accountant Member Shri Prashant Maharishi.
Source: Income Tax Appellate Tribunal, Delhi Bench ‘I-1’, New Delhi
Disclaimer: This article provides a general overview of the case and is not a substitute for professional legal advice. For detailed information, readers are encouraged to refer to the official case documents and consult with a qualified legal professional.
Metenere Ltd vs ACIT: Tax Dispute for AY 2012-13 Dismissed Due to Insolvency Proceedings
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