Insolvency resolution plans may be approved, but statutory tax and stamp-duty exemptions cannot be granted without specific legal authority.

A resolution plan under the Insolvency and Bankruptcy Code was approved because it satisfied Section 29A eligibility, priority payment of insolvency resolution process costs, treatment of operational creditors and workmen, and feasibility, viability, and implementation requirements under the CIRP framework, with 100% creditor approval. The Tribunal rejected requests for blanket income-tax relief, including exemption from minimum alternate tax and withholding obligations, because Section 115JB already provided the relevant CIRP-linked tax treatment and no further exemption was authorised. It also declined exemption from stamp duty, registration fees, and penalties for non-registration or inadequate stamping, holding that such statutory governmental dues and penalty waivers could not be granted absent specific legal authority.

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Issues: (i) Whether the resolution plan satisfied the requirements of the Insolvency and Bankruptcy Code and the CIRP Regulations so as to merit approval; (ii) whether the requested tax-related reliefs, including exemption from minimum alternate tax and withholding-related reliefs, could be granted; (iii) whether exemption from stamp duty, registration fees, and waiver of penalties for non-registration or inadequate stamping could be granted.

Issue (i): Whether the resolution plan satisfied the requirements of the Insolvency and Bankruptcy Code and the CIRP Regulations so as to merit approval.

Analysis: The plan recorded compliance with eligibility under Section 29A, priority payment of insolvency resolution process costs, treatment of operational creditors and workmen, management after approval, implementation and supervision arrangements, and the feasibility, viability, and implementation capability requirements under the CIRP framework. The committee of creditors approved the plan with 100% voting share, and the plan was found to be in place and fit for admission.

Conclusion: The resolution plan satisfied the statutory requirements and was approved.

Issue (ii): Whether the requested tax-related reliefs, including exemption from minimum alternate tax and withholding-related reliefs, could be granted.

Analysis: Section 115JB of the Income-tax Act, 1961 already provided relief for companies undergoing CIRP by allowing specified deductions in computing minimum alternate tax. The Tribunal held that no further relief was necessary under Section 115JB or any other provision of the Income-tax Act, 1961, and rejected the request for blanket income-tax reliefs and exemption from Chapter XVII-B withholding obligations.

Conclusion: The requested tax-related reliefs were not granted.

Issue (iii): Whether exemption from stamp duty, registration fees, and waiver of penalties for non-registration or inadequate stamping could be granted.

Analysis: The Tribunal held that the Code does not confer power to exempt the corporate debtor or resolution applicant from legitimate governmental dues arising from execution and implementation of the resolution plan, and it also lacked power to grant the requested penalty waivers.

Conclusion: The requested stamp duty, registration fee, and penalty waivers were rejected.

Final Conclusion: The resolution plan was approved with the stated reliefs except for the tax and stamp-duty related exemptions that were expressly rejected, and the insolvency proceedings were directed to be completed accordingly.

Ratio Decidendi: A resolution plan may be approved when it satisfies the Code and CIRP Regulations and receives the requisite creditor approval, but the adjudicating authority cannot grant exemptions from statutory tax liabilities or government dues unless such relief is specifically authorised by law.

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