TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal Upholds Binding Nature of Approved Resolution Plan in Meena Jewellers Case</h1> <h3>Meena Jewellers Private Limited Part IX Versus Income Tax Officer, Ward-16 (1) Hyderabad</h3> The Appellate Tribunal dismissed the appeals in the case of M/s. Meena Jewellers Pvt. Ltd. concerning assessment years 2009-10 & 2010-11. The Tribunal ... Continuation of proceedings in respect of dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 of IBC, once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code - HELD THAT:- A reading of the provisions under section 13 and 14 of the Code along with the decision in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT], clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings is prohibited and when once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. At any rate, for the time being, this appeal cannot be proceeded with during the continuance of the proceedings under the Code. However, depending upon the result of such proceedings before the adjudicating authority in respect of the corporate debtor, appropriate steps if any, may be taken by the appellant/respondent. The appeal of Revenue is dismissed in limine. Issues:Appeal against order of Commissioner of Income Tax (Appeals) - Corporate Insolvency Resolution Proceedings (CIRP) pending - Interpretation of Insolvency and Bankruptcy Code, 2016 - Effect of resolution plan approval on claims - Prohibition on continuation of pending suits during CIRP.Analysis:The Appellate Tribunal, ITAT Hyderabad, heard appeals against the order of the Commissioner of Income Tax (Appeals) in the case of M/s. Meena Jewellers Pvt. Ltd. for the assessment years 2009-10 & 2010-11. The Tribunal noted that Corporate Insolvency Resolution Proceedings (CIRP) were ongoing against the assessee, with the National Company Law Appellate Tribunal (NCLAT) having jurisdiction over the matter. The Tribunal considered the provisions of the Insolvency and Bankruptcy Code, 2016, and referred to the decision of the Supreme Court in the case of Ghanashyam Mishra And Sons vs. Edelweiss Asset Reconstruction (2021) regarding the impact of resolution plan approval on claims.The Tribunal highlighted that under section 13 of the Code, a moratorium is declared upon admission of an application under sections 7, 9, or 10, which includes a prohibition on the institution or continuation of suits against the corporate debtor. Citing the Ghanashyam Mishra And Sons case, the Tribunal emphasized that claims provided in an approved resolution plan become binding on the Corporate Debtor and stakeholders. Any claims not part of the resolution plan are extinguished upon approval, preventing the initiation or continuation of proceedings regarding such claims.Further, the Tribunal clarified that once CIRP proceedings commence, the continuation of pending proceedings is prohibited. Upon approval of the resolution plan by the Adjudicating Authority, the claims specified in the plan are frozen and binding on the Corporate Debtor and stakeholders. The Tribunal concluded that the appeals could not proceed during the CIRP and dismissed them, granting the appellants/respondents the opportunity to seek restoration based on the CIRP outcome. The Tribunal drew support for its decision from a previous case of the Mumbai Bench of the Tribunal.In light of the above analysis, the Tribunal dismissed both appeals of the assessee in limine, indicating that the orders were pronounced in the open court on August 29, 2022.
TaxTMI 
TaxTMI 
