Tribunal upholds Insolvency and Bankruptcy Code Resolution Plan, dismisses Income Tax Department's post-approval demands

The Tribunal affirmed the Adjudicating Authority's decision, upholding the approval and compliance of the Resolution Plan under the Insolvency and Bankruptcy Code. It rejected the Income Tax Department's post-approval demands, denied waivers for statutory dues, and upheld the validity of demands for assessment years 2012-13 and 2013-14. The Tribunal also supported the imposition of costs by the Adjudicating Authority, dismissing the appeal and emphasizing the need for proper procedures in addressing statutory dues and related matters.

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Issues Involved:
1. Approval and compliance of the Resolution Plan.
2. Demand raised by the Income Tax Department post-approval of the Resolution Plan.
3. Waiver of statutory dues and pre-deposit requirements.
4. Validity of demands for assessment years 2012-13 and 2013-14.
5. Imposition of costs by the Adjudicating Authority.

Issue-wise Detailed Analysis:

Approval and Compliance of the Resolution Plan
The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 31.05.2018. The Interim Resolution Professional (IRP) was appointed and later confirmed as the Resolution Professional (RP). The Joint Resolution Applicants submitted a resolution plan, which was approved by the Committee of Creditors (CoC) and subsequently by the Adjudicating Authority on 21.05.2019. The Adjudicating Authority confirmed that the Resolution Plan complied with Section 30(2) of the Insolvency and Bankruptcy Code (IBC).

Demand Raised by the Income Tax Department Post-approval of the Resolution Plan
The Respondent No. 1 (Income Tax Department) raised demands for assessment years 2012-13 and 2013-14 after the approval of the Resolution Plan. The Monitoring Professional communicated to the Income Tax Department that no demands could be raised post-approval of the Resolution Plan. Despite this, the Income Tax Department issued fresh demand notices. The Appellants argued that these demands were against the scheme of the IBC and the approved Resolution Plan.

Waiver of Statutory Dues and Pre-deposit Requirements
The Resolution Plan proposed to pay contingent liabilities in instalments and sought waivers for pre-deposit requirements, interest, penal interest, and damages. The Adjudicating Authority denied granting these waivers, stating that such issues should be decided by the respective government departments. This decision was upheld, noting that the proper procedure involves making appropriate applications to the concerned departments.

Validity of Demands for Assessment Years 2012-13 and 2013-14
The Appellants sought a declaration that the demands for assessment years 2012-13 and 2013-14 were invalid, referencing the Supreme Court decision in Essar Steel. However, the Tribunal noted that the judgment in "Ghanashyam Mishra" was not cited before the Adjudicating Authority and did not find it applicable in this case. The demands were raised after the moratorium period had ended, and thus, the Tribunal did not find grounds to invalidate these demands.

Imposition of Costs by the Adjudicating Authority
The Adjudicating Authority dismissed the application filed by the Monitoring Professional with a cost of Rs. 1,00,000, stating that the application was a waste of judicial time. The Tribunal upheld this decision, agreeing that the application was filed without merit and served to delay proceedings.

Conclusion
The Tribunal affirmed the Adjudicating Authority's order dated 17.09.2020, dismissing the appeal and upholding the imposition of costs. The Tribunal found no illegality in the Adjudicating Authority's decision and emphasized that statutory dues and related issues should be addressed through appropriate applications to the concerned departments. The appeal was dismissed with no order as to costs.

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