Whether proceedings under Income Tax Act, 1961 have to be kept in abeyance by the assessing officer in the light of the insolvency proceedings under IBC – SREI Equipment Finance Ltd. Vs. Additional/Joint/Deputy/Assistant Commissioner of Income Tax and Others – Calcutta High Court
Hon’ble High Court held that the assessing officer committed grave error in proceeding to complete the assessment and pass the order and refused to stay the proceedings till the completion of the Insolvency Resolution Process. At this juncture, it would be important to note the decision the Hon’ble Supreme Court in the case of Alchemist Asset Reconstrution Company Ltd. Vs. M/S. Hotel Gaudavan Pvt. Ltd. & Ors. [2017] ibclaw.in 09 SC, wherein the Hon’ble Supreme Court had pointed out that the mandate of the new insolvency Code is that the moment an insolvency petition is admitted, the moratorium that comes into effect under Section 14(1)(a) expressly interdicts institution or continuation of pending suits or proceedings against corporate debtors. This legal principle should have been borne in mind by the assessing officer before he proceeded to pass the assessment order.