Reassessment Order Voided for 2017-18: Liabilities Must Align with NCLT-Approved Plan, Excluding Pre-Approval Obligations.

The HC allowed the writ petition, invalidating the reassessment order under Section 148A(d) of the Income Tax Act, 1961, for the Assessment Year 2017-18. The court held that liabilities on the successful resolution applicant must conform to the NCLT-approved Resolution Plan, excluding obligations from periods before its approval.

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Issues involved:
The judgment involves the interpretation of Section 148A(d) of the Income Tax Act, 1961 in relation to a reassessment notice issued to a corporate debtor post-approval of the Resolution Plan by the National Company Law Tribunal (NCLT) for Assessment Year 2017-18.

Summary:

Issue 1: Reassessment Notice Post-Approval of Resolution Plan
The petitioner, a corporate debtor, challenged a reassessment notice issued under Section 148A(d) of the Income Tax Act, 1961 for the Assessment Year 2017-18, which pertained to a period before the approval of the Resolution Plan by the NCLT. The court considered the legislative intent behind the Insolvency and Bankruptcy Code (I&B Code) to revive the corporate debtor and make it a going concern, as highlighted in previous judgments.

Issue 2: Binding Nature of Resolution Plan
Referring to the Supreme Court's decisions in Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. and Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta, the court emphasized that a resolution plan approved by the Committee of Creditors becomes binding on all stakeholders, including guarantors. The court held that the successful resolution applicant should not be burdened with liabilities not specified in the Resolution Plan approved by the NCLT.

Conclusion:
Based on the principles established in the aforementioned judgments, the court allowed the writ petition, setting aside the impugned reassessment order dated 30 July 2022 under Section 148A(d) of the Income Tax Act, 1961. The judgment reaffirmed that liabilities imposed on the successful resolution applicant must align with those specified in the approved Resolution Plan and should not extend to periods predating the plan's approval.

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