Before the Tribunal the revenue contended that appeals of the revenue cannot be dismissed in view of the provisions of section 14 of IBC 2016 with respect to the moratorium period.  It was submitted that the provisions of section 14 (1)(a) suggest that the word ‘proceedings’ does not include income tax proceedings and can continue during the period of moratorium. She further referred to the provisions of rule 26 of ITAT Rules, 1963 and stated that if income tax proceedings fall within the ambit of section 14 it will create an anomalous and paradoxical situation. Therefore,the revenue contended  that the meaning, which is attached to the word ‘proceedings’, is the proceedings related to suits and not all kinds of proceedings. Therefore, according to  revenue the income tax proceedings can continue during the moratorium period also. It was  argued  thatthe coordinate bench is prohibited u/s 14 of the code to give any direction regarding tax recovery proceedings in relation to the company however, the appeal shall continue.  Revenue has referred to rule 26 of The Appellate Tribunal Rules 1963 to provide that proceedings before ITAT can continue even after insolvency. The Tribunal held that , the provisions of section 14 of the Insolvency and Bankruptcy Code, 2016 prohibits the institution of all suits or continuation of pending suits or proceedings against the corporate debtor including the execution of any judgment or decree or order in any court of law, tribunal, arbitration panel or other authority during the moratorium period. The period of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process. Accordingly the Appellate Tribunal held that   the appeal filed by the Department was an institution of suit against the corporate debtor, which was prohibited under section 14 . Further, by the recent amendment to the 2016 Code any resolution plan or liquidation order as decided by the competent authority would be binding on all the stakeholders including the Central Government, any State Government or local authority to whom a debt in respect of the payment of the dues may be owed. This will prevent State authorities, regulatory bodies including the Direct and Indirect Tax Departments from questioning the resolution plan or liquidation order as well as jurisdiction of tribunals with regard to the 2016 Code. Thus after the recent amendment also there was no reason to continue with these appeals.  Apparently, the provisions of section 14 of The Insolvency And Bankruptcy Code, 2016 provides that all these suits or continuation of pending suits or proceedings against the corporate debtor including any judgement or decree or order in any court of law, tribunal, arbitration panel or other authority cannot be passed during the moratorium period. The period of moratorium shall have the effect from the date of such order till the completion of the corporate insolvency resolution process. Tribunal held that in  the present case, the appeal filed by the revenue is an institution of suit against the corporate debtor, which is prohibited under section 14 of the act. No excepts u/s 14(2) of the IBC 2016 was shown to us. As held by the honourable Supreme Court in case of Alchemist Asset Reconstruction Co. Ltd vs Hotel Godavan Pvt Ltd [88 taxmann.com 202] it has been held that even arbitration proceedings cannot be initiated after imposition of the moratorium u/s 14(1)(a) has come into effect and it is not nice in law and could not have been allowed to continue. Further Honourable Apex Court in the case of PCIT v Monnet Ispat and Energy Ltd. [SLP (c) No: 6487 of 2018, dated 10-8-2018] has upheld overriding nature and supremacy of the provisions of the IBC Code over any other enactment in case of conflicting provisions, by virtue of a non-obstante clause contained in section 238 of the IBC Code. In view of this the appeals filed by the revenue cannot be continued to be allowed during the course of moratorium period.

Tribunal also held that   Circular No. 17 of 2019 dated August 8, 2019 ( 2019)416 ITR 106 (St)  will apply to all pending appeals. Therefore the appeal was not maintainable in the instant case as the tax effect was less than Rs. 50 lakhs.( AY.1995 to 2002)