Per George George K, JM :

1.This appeal at the instance of the Revenue and Cross Objection preferred by the assessee are directed against CIT(A)’s order dated 30.11.2016. The relevant assessment year is 2012-2013.

2. We shall first adjudicate the Revenue’s appeal.

ITA No.399/Bang/2017 : By Revenue:

2. At the very outset, the learned AR submitted by virtue of NCLT order dated 09.07.2019, the Revenue can recover only Rs.1,00,000. Therefore, it was submitted that the tax that is sought to be recovered being less than the amount specified vide Board Circular No. 17/2019 dated 8th August, 2019, the Department’s appeal ought to be dismissed. In this context, the learned AR relied on following judicial pronouncements:-

(i) CIT v. Moser Baer India Ltd. 2021-TIOL-89-SC-ITLB.

(ii) Ultra Tech Nathdwara Cement Ltd. V. UOI 2020- TIOL-760-HC-RAJ-GST

(iii) Leo Edibles & Fats Ltd. V. Tax Recovery Officer (2018) 407 ITR 369 (AP&T HC)

(iv) Official Assignee v. T.R.Bhuvaneswari (2016) 385 ITR 105 (Madras)

(v) Ballarpur Industries Ltd. V. CIT (2017) 398 ITR 145 (Bom. HC)

(vi) Shamken Multfab Ltd. V. DCIT (2013) taxmann.com 329 (Delhi Trib.)

3. The learned Departmental Representative did not contend that department is entitled to recover tax arrears exceeding the amounts specified in the Board Circular No. 17/2019 dated 8th August, 2019. However, it was contended by the learned DR that the department wants to keep the issue raised in this appeal alive and wants adjudication on the same.

4. We have heard rival submissions and perused the material on record. It is an admitted fact that NCLT vide its order dated 09.07.2019 had accepted the resolution dated 06.06.2018 (page 15 of the NCLT order). The relevnt portion of the resolution dated 06.06.2018 reads as follow:-

“(a) Disputed Income Tax Liability under litigation with ACIT

The Income Tax Department had disallowed certain income classified by the Corporate Debtor as Agricultural Income. The Corporate Debtor preferred appeal with the CIT(A) , which ruled the same in favour of the Corporate Debtor. However, subsequently, the ACIT, IT department has challenged the order of the CIT(A) before theAT. The litigation is currently ongoing.

For the purpose of the Resolution Plan, the liability arising out of the said case is being considered as deemed crystallized. Simultaneously, the Resolution Applicant is proposing the deemed liability arising out of the ACIT case to be settled at a nominal amount of Rs.1,00,000 (Rupee One Lac Only).”

4.1 The Hon’ble Supreme Court in the case of CIT v. Moser Baer India Limited (supra) observed that even if the revenue has to succeed in its appeal, the assessee is not in a position to pay the outstanding tax arrears. The Hon’ble Supreme Court after considering the tax value involved, deemed it appropriate to dismiss the tax appeal leaving the question of law for adjudication at appropriate stage. The Hon’ble Rajasthan High Court in the case of Ultra Tech Nathdwara Cement Ltd. V. UOI (supra) had held that NCLT’s order is binging and any recovery of an amount in excess of the specified amount in the NCLT’s order is totally illegal and arbitrary. The Hon’ble Andhra Pradesh & Telangana High Court in the case of Leo Edibles & Fats Limited v. Tax Recovery Officer (supra) had held that the Income Tax Department cannot claim any priority merely because of fact that order of attachment was issued long prior to initiation of liquidation proceedings under Code against company. The Madras High Court in the case of Official Assignee v. T.R.Bhuvaneswari (supra) had held that the Official Assignee need not go before Central Board of Direct Taxes praying for waiver of interest under sections 234A, 234B and 234C as Insolvency Court itself can consider question of waiver of interest in terms of power conferred under section 7 of Presidency Towns Insolvency Act, 1909. The other judicial pronouncements relied by the learned AR are also to the effect that NCLT orders are binding and the Revenue cannot recover any amount other than specifically mentioned in the said order.

4.2 In view of the above judicial pronouncements, we are of the view that the Revenue being not in a position to recover any amount exceeding Rs.1 lakh in the facts of this case, no useful purpose would be served in adjudicating the issue raised in this appeal. Therefore, taking into consideration the tax value involved, we dismiss the Department’s appeal being below the monetary limit specified under the Board Circular No. 17/2019 dated 8th August, 2019. The issue raised in this appeal is left open to be decided in appropriate case. It is ordered accordingly.

CO No.86/Bang/2017 : By Assessee:

5. The learned AR submitted that if the Department’s appeal is dismissed, the Cross Objection preferred by the assessee can also be dismissed. Taking into account the submission of the assessee, the Cross Objection is dismissed. 

 6. In the result, the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed.

Order pronounced on this 29th day of June, 2021.