# In the matter of Dishnet Wireless Limited and Anr. Vs. The Deputy Commissioner of Income Tax and Anr.

> HC judgment dated 2018-12-18. Citation: TCN-2018-HC-00001. Dishnet Wireless Limited and Aircel Limited filed writ petitions challenging the proceedings…

- **Court:** HC
- **Order date:** 18 Dec 2018
- **Citation:** TCN-2018-HC-00001
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/dishnet-wireless-limited-and-anr-vs-the-deputy-commissioner-of-income-tax-and-an-06b322b1

## Summary

### Background

Dishnet Wireless Limited and Aircel Limited filed writ petitions challenging the proceedings initiated by the Income Tax Department under Section 201(1) and 201(1-A) of the Income Tax Act for alleged failure to deduct Tax Deducted at Source (TDS) on certain foreign remittances. The petitioner-companies argued that the National Company Law Tribunal (NCLT), Mumbai, had admitted their applications and initiated Corporate Insolvency Resolution Process (CIRP), declaring a moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC). They contended that the proceedings by the Income Tax Department were in violation of the moratorium. The Income Tax Department argued that the time limit for assessment had not expired and that they were not taking any coercive

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## Facts

Dishnet Wireless Limited and Aircel Limited, represented by Mr. K.P. Varadharajan, filed writ petitions challenging notices issued by the Deputy Commissioner of Income Tax and the Assistant Commissioner of Income Tax. The notices, dated 26.02.2018 and 27.02.2018, pertained to proceedings initiated under Section 201(1) and 201(1-A) of the Income Tax Act for alleged failure to deduct TDS on foreign remittances. The petitioner-companies submitted that they had initiated proceedings under Section 10 of the Insolvency and Bankruptcy Code, 2016 (IBC), and that the NCLT, Mumbai, had admitted their applications and initiated CIRP, declaring a moratorium under Section 14 of the IBC on 12.03.2018 and 19.03.2018. The petitioners argued that the Income Tax Department's actions

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## Issues and analysis

### Issue 1: Whether the proceedings initiated by the Income Tax Department under Section 201(1) and 201(1-A) of …

**Ratio:** Section 14 of the IBC imposes a moratorium on the institution or continuation of suits or

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**Reasoning:** The court reasoned that once a moratorium is granted by the NCLT, the legal fiction under

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**Interpretation:** Section 14 of the IBC is interpreted to provide a shield to the corporate

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**Application:** The court applied the ratio of Section 14 of the IBC to the facts of the case,

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## Parties

- **Judges:** T.RA…
- **Appellants:** Dishnet Wireless…
- **Respondents:** THE DEPUTY…
- **Advocates:** Mr.Vishnu…; M/s.R.Parthasarath…; +1 more

## Timeline

- **2018-02-26 — Notice from Income Tax…**: The respondents served the petitioner-companies with a notice dated 26.02.2018 and…
- **2018-03-12 — NCLT admits application…**: The National Company Law Tribunal (NCLT), Mumbai, admitted the applications preferred by…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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