Asstt. Commissioner Of Income Tax vs Uttam Strips Limited

Assistant Commissioner of Income Tax ....Appellant Circle - 27(1), New Delhi.

Versus

Uttam Strips Ltd. & Anr. .... Respondent

Present

For Appellant: Ms. Abeeda Mujahid and Mr. Puneet Rai, Standing Counsels

For Respondent: Mr. Ankur Mittal, Ms. Meera Murali, Advocates

ORDER

(Virtual Mode)

Learned Counsels of Appellant(Applicant) and Respondent

No. 1 were heard on I.A. No. 909 of 2020 in CA (AT)(Ins) No. 35 of

2020 on 4.10.2021.

I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

1

2. It is recalled that the main Company Appeal (AT) (Ins) No.35

of 2020 was filed by the Appellant, wherein this Tribunal gave the

following order on 8.1.2020 :-

"08.01.2020 Learned Counsel for the Appellant submits

that the impugned order dated 6th June, 2019 was brought to

the notice of the Income Tax Department on 30th October, 2019

by the „Corporate Debtor‟. Thereafter, the certified copy was

applied for and received on 20th December, 2019. Therefore,

there is no delay in filing the appeal. However, on the safe

side application for condonation of delay has been filed.

Taking into consideration the aforesaid fact, we hold

that the appeal has been filed within the time i.e. 30 days

from the date of receipt of the certified copy of the impugned

order.

I.A. No. 102 of 2020 stands disposed of.

Learned Counsel for the Appellant prays for and is

allowed to implead „Jyoti Stips Ltd.‟(Successful Resolution

Applicant) as 2ndRespondent. Necessary corrections be made

in the cause title of the appeal and other relevant pages of the

paper-books by 9th January, 2020."

I.A. No. 909 of 2020

in Company Appeal (AT) (Ins) No. 35 of 2020

2 Additionally, by order dated 8.1.2020 the Successful Resolution

Applicant (Jyoti Stips Ltd.) was also permitted to be impleaded as

Respondent No. 2 at the request of the Learned Counsel for

Appellant. Thereafter notice was directed to be issued to the

Respondents and the appeal was listed for hearing on admission

(after notice). In response, Respondent No. 1 filed I.A. No. 909 of

2020 raising the objection that the appeal was time barred.

Therefore, the present appeal may be dismissed, as it has been out

of limitations.

3. The Appellant (who is Respondent in the IA), filed reply to

I.A. No. 909 of 2020 vide Diary No. 29375 dated 2.9.2021.

The Learned counsel for Appellant, has stated in his

arguments as follows:-

(i) The Assistant Commissioner of Income Tax was

informed by the Resolution Professional (RP) about the

initiation of Corporate Insolvency Resolution Process

(CIRP) of the Corporate Debtor on 26.12.2018, while

replying to the notice issued by the Income Tax

Department under sections 144 and 147 of the Income

Tax Act, 1961. Therefore, the Appellant was aware of

the initiation of the CIRP of the Corporate Debtor, but I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

3 took no steps to file its claim (Copy of letter dated

26.12.2018 is attached at pp. 150-151 of I.A No. 909

of 2020).

(ii) On 16.9.2019, Uttam Strips Ltd. (Respondent No. 1)

filed reply to notice dated 24.8.2019 on the online

portal of Income Tax Department whereby Respondent

No.1 informed the Appellant about the initiation of

CIRP proceedings against Corporate Debtor (Copy of

the letter dated 6.9.2019 is attached at pp.152-158 of

IA No.909/2020).

(iii) The Assistant Commissioner of Income Tax wrote a

letter in October, 2019 to the Oriental Bank of

Commerce. In reply Respondent No. 2 vide letter

dated 17.10.2019, sent copy of order dated 9.4.2018 of

the Adjudicating Authority regarding initiation of CIRP

and order dated 6.6.2019 regarding approval of the

Adjudicating Authority to the Resolution Plan to the

Assistant Commissioner, Income Tax Department

(attached at pp. 159-160 and typed copies at pp.

159A-160A of IA No. 909 of 2020).

(iv) Again on 18.10.2019, Respondent No. 1 filed reply to

the notice dated 23.9.2019 on the online portal of I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

4 Income Tax Department, informing Appellant of the

approval of the Resolution Plan on 6.6.2019 (copy

attached at pp.167-170 of IA No. 909 of 2020). Thus

on 18.10.2019, Appellant was again made aware of the

order dated 6.6.2019 and a copy of the said order was

also conveyed to the Appellant.

(v) In para 4 of the appeal filed by the Appellant seeking

condonation of delay, Appellant has said that he

applied for certified copy of the order on 9.12.2019

which was made available on 16.12.2019. Since it

was copy of an order which was not sought, he applied

for copy of impugned order on 17.10.2019 and got it

on 26.12.2019 whereafter the appeal was filed on

27.12.2019.

4. The Learned Counsel for Appellant has stated that IA

No. 909/2020 is not maintainable, as it is a misconceived

application seeking review of Hon'ble NCLAT's order dated

08.01.2020, whereby this Tribunal had condoned the delay

in filing of the appeal on reasonable grounds. He has

claimed that the Applicant has filed IA No. 909 of 2020 in

the garb of invoking the inherent power available to NCLAT

I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

5 under Rule 11 of the NCLAT Rules, 2016, even though the

inherent powers are meant only for meeting the ends of

justice and to prevent any miscarriage of justice and not for

reviewing a legal order. He has stated that this Hon'ble

Tribunal has, in order dated 08.01.2020, given the final

order on the application for condonation of delay, and if the

Applicant is aggrieved by such order, he should file proper

appeal for the same, as is required under law.

5. The Learned Counsel for Appellant has cited judgment

dated 03.03.2021 of this Tribunal in Company Appeal

(AT)(Ins) No. 379 of 2020 [Adish Jain s/o Mohinder Jain

(Shareholder of Corporate Debtor) Vs. Sumit Bansal (IRP

of Corporate Debtor] wherein it has been held that the

power to review is not an inherent power of the Tribunal and

such a power has to be conferred by a statute. He has

claimed that there is no provision for review in NCLAT Rules,

2016, and the power vested under Rule 11 can only be

exercised to further the cause of justice, or prevent abuse of

process.

6. The Learned Counsel for Appellant has cited the

observations made by Hon'ble NCLAT in the case of Adish I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

6 Jain s/o Mohinder Jain (Shareholder of Corporate

Debtor) Vs. Sumit Bansal (IRP of Corporate Debtor]

(Supra), wherein the judgment of Hon'ble Supreme Court in

the case of Lily Thomas and Ors. Vs. Union of India & Ors.

[(2006) 6 SCC 224] has been cited, which is as under:-

"56. It follows, therefore, that the power of review can

be exercised for correction of a mistake but not to substitute a

view. Such powers can be exercised within the limits o the

statute dealing with the exercise of power. The review cannot

be treated like an appeal in disguise. The mere possibility of

two views on the subject is not a ground for review..."

We are of the considered view that the decision of the

Hon‟ble Supreme Court in "Lily Thomas and Ors. Vs. Union of

India (Supra) applies. The correction of the Judgement sought

for in the present Review Application is impermissible in Law.

.......

We observe that there is no „mistake apparent from the

record and the Applicant cannot be permitted to seek re-

hearing of the Appeal in regard to any finding which amount

I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

7 to sitting in an Appeal in disguise. In the grab of this Review

Application, the Applicant seeks to reargue the matter.‟

(emphasis supplied)

7. The Ld. Counsel of Appellant has also placed reliance

on the decision in N. Balakrishnan v. M. Krishnamurthy

[(1998) 7 SCC 123], wherein the Apex Court has held that

the rules of limitation are not meant to destroy the rights of

the parties and the law of limitation fixes a life span for legal

remedy for the redress of any legal injury. He has contended

that limitation should be counted from the date of knowledge

of the Impugned Order i.e. 30.10.2019 and 45 days from the

date of knowledge would expired on 14.12.2019. Therefore,

since the Appellant applied for obtaining certified copy on

9.12.2019 and he received the desired copy of Impugned

Order on 26.12.2019, and the appeal was filed immediately

thereafter on 27.12.2019, the appeal is within the time limit

of 45 days as required in law. Hence, the appeal is well

within limitation.

8. We note that this Tribunal passed order on 8.1.2020

based on the arguments and statements put forth only by

the Learned Counsel for Appellant. We also note that later, I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

8 after issue of notice to Respondent No.1, certain other facts

were placed before this Tribunal regarding the prior

knowledge of the Impugned Order to the Appellant. All these

instances have been stated by the Learned Counsel for

Respondent No. 1/Applicant in IA No. 909 of 2020 (supra).

These contentions which are based on various documents

and records referred to and cited by the Learned Counsel for

the Applicant have not been converted or disputed by the

Learned Counsel for Appellant and they.

9. Hence, as stated by the Applicant of IA No. 909 of

2020, Appellant came to know of order of approval of

Resolution Plan on 17.10.2019, the maximum period of 45

days will expire on 1.12.2019. Even if an exemption for

period of 11 days spent in getting certified copy of order is

given, the period of limitation will expire on 14.12.2019.

Thus appeal filed on 27.12.2019 is clearly time barred.

10. Even if starting date of limitation is taken from

18.10.2019, when Respondent No. 1 filed reply to the notice

dated 23.9.2019 on the online portal of Income Tax

Department informing Appellant of the approval of the

Resolution Plan, the maximum prescribed 45 days period of I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

9 limitation would expire on 2.12.2019. After excluding 11

days period that was spent in obtaining certified copy of the

order, the limitation would expire on 13.12.2019. Even then

the limitation appeal filed on 27.12.2019 is time barred.

11. Section 3 of the Limitation Act, 1963 states as

follows:-

"3. Bar of limitation - (1) Subject to the provisions

contained in sections 4 to 24 (inclusive), every suit

instituted, appeal preferred, and application made after

the prescribed period shall be dismissed, although

limitation has not been set up as a defence."

12. Thus we find that Appellant was adequately informed

and well aware of the initiation of CIRP and approval of the

Resolution Plan and yet he did not file any claim with the

Resolution Professional. The Learned Counsel for Applicant

of IA No. 909 of 2020) has, therefore, emphatically stated

that since the Appellant was well aware of the initiation of

CIRP much before 9.12.2019, when he applied for obtaining

certified copy of the Impugned Order, therefore, the appeal is

barred by limitation of time.

I.A. No. 909 of 2020

in Company Appeal (AT) (Ins) No. 35 of 2020

10

13. We are of the clear view that, since new facts have

come to light through I.A. No. 909 of 2020 filed by the

Respondent No. 1 in the Appeal, which were not brought to

this Tribunal's notice/knowledge on 8.1.2020, they should

now be considered in the interest of justice.

14. In the light of the aforementioned discussion, I.A No.

909 of 2020 succeeds and the prayers made therein are

granted. As a result, Company Appeal (AT)(Ins) No. 35 of

2020 is held to be time barred and therefore, dismissed at

the present stage. There is no order as to costs.

(Justice Jarat Kumar Jain) Member (Judicial)

(Dr. Alok Srivastava) Member (Technical)

New Delhi 25th October, 2021

/aks/

I.A. No. 909 of 2020 in Company Appeal (AT) (Ins) No. 35 of 2020

11