Question 1

What are the key legal issues in Sona Alloys Private Limited vs. Jurisdictional Officer – Deputy Commissioner of Income Tax?

Accepted Answer

1. Whether the CIRP and moratorium prevent new income tax proceedings? 2. Whether the order passed under Section 263 of the Act is invalid?

Question 2

What are the facts of Sona Alloys Private Limited vs. Jurisdictional Officer – Deputy Commissioner of Income Tax?

Accepted Answer

The assessee, Sona Alloys Private Limited, filed an appeal against the order dated 15.03.2024 passed by the Principal Commissioner of Income Tax (PCIT), Ahmedabad for the Assessment Year 2018-19. The assessee raised several grounds of appeal, including the erroneous initiation of Corporate Insolvency Resolution Process (CIRP) and the invalidity of the order passed under Section 263 of the Income-tax Act, 1961. The assessee also contested the assessment order passed under Section 143(3) r.w.s. 144B of the Act, the addition of closing stock, and the addition of unsecured loans. The assessee argued that the CIRP initiated on 16.06.2020 and the moratorium declared prevented any new income tax proceedings for the period prior to the CIRP date. The assessee also claimed that the unsecured loans were genuine and verified before the CIRP date. The Revenue, represented by Shri H. Phani Raju, CIT (DR), argued that the High Courts have not observed that the assessment and reassessment proceedings will be stopped due to the CIRP and the moratorium. The Tribunal dismissed grounds 1, 2, and 3, and allowed grounds 4 and 5, resulting in the appeal being partly allowed.

Sona Alloys Private Limited vs. Jurisdictional Officer – Deputy Commissioner of Income Tax

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Facts Summary

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