Assessee was a resident corporate entity. Pursuant to search and seizure proceedings, assessment was conducted, and assessment orders were passed under section 143(3) r.w.s 153A of the Act. Appeals were filed before the Commissioner (Appeals) and thereafter before the Tribunal by both the Assessee and revenue. The Hon’ble Tribunal remanded the matter back to the assessing officer for fresh adjudication.

In the meanwhile, on the basis of applications filed by creditors & others, Corporate Insolvency Resolution Process (CIRP) was initiated against the Assessee in National Company Law Tribunal (NCLT). The NCLT, Mumbai Bench passed an order of moratorium, and an Insolvency Resolution Professional (IRP) was also appointed by NCLT in terms with the Insolvency and Bankruptcy Code 2016 (IBC). Accordingly, by the time assessment proceedings were taken up in pursuance to the direction of the Tribunal, the moratorium order of the NCLT had already been passed and IRP was appointed. The IRP thereafter requested the Assessing Officer not to proceed with the assessment proceedings in view of the order passed by NCLT imposing moratorium in terms of section 14 of the IBC. Further, the IRP intimated to the Assessing Officer that the appeal filed by the revenue before the Hon’ble Delhi High Court against the order of the Tribunal was dismissed in view of the moratorium imposed by NCLT. The Assessing Officer, however, proceeded to complete the assessment on the following 2 grounds viz. (i) the proceedings under NCLT are applicable to normal creditors of Assessee and not to proceedings under the Act; (ii) Against the order of the Hon’ble Delhi High Court, the CBDT has given approval for filing SLP before Hon’ble Supreme Court. The Assessing Officer completed the assessment ex-parte by alleging that the Assessee neither appeared nor furnished necessary details as sought during the proceedings. Against the assessment orders passed by the Assessing Officer, the Assessee again preferred appeal before Commissioner (Appeals) which was dismissed.

The Hon’ble Tribunal quashed the assessment orders and held them to be void-ab-initio by taking note of the following facts viz. (i) since the moratorium order of the NCLT had already been passed and IRP had been appointed, the Assessee had no locus standi to appear in the assessment proceedings; (ii) the Assessing Officer went ahead with the assessment disregarding the moratorium imposed by NCLT, though specifically brought to notice of the Assessing Officer by the IRP; (iii) As per the final order of NCLT, the debt due to various creditors including the Income Tax department were extinguished and determined at Nil as per waterfall mechanism mentioned under section 53 of the IBC. (AY.2010-11, 2011-12)