Clean slate principle bars reopening of tax claims not covered by an approved resolution plan; reassessment proceedings were set aside.

Where a corporate debtor has undergone CIRP and an approved resolution plan is in place, tax claims not provided for in that plan cannot be pursued against the corporate debtor under the clean slate principle. On that settled basis, the reassessment notice under Section 148A(d) and the consequential proceedings for assessment year 2017-18 were held unsustainable and were set aside.

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Issues: Whether the order under Section 148A(d) of the Income-tax Act, 1961 and the consequential reassessment proceedings for the assessment year 2017-18 could be sustained in view of the approved resolution plan under the Insolvency and Bankruptcy Code, 2016 and the clean slate principle.

Analysis: The Petitioner had undergone a corporate insolvency resolution process and a resolution plan had been approved by the National Company Law Tribunal. The challenge to reopening of completed tax liabilities was covered by earlier decisions holding that claims not provided for in the approved resolution plan cannot be pursued against the corporate debtor. In view of that settled position, the impugned reopening and all consequential proceedings lacked legal foundation.

Conclusion: The impugned order under Section 148A(d) and all further proceedings for assessment year 2017-18 were set aside in favour of the Petitioner.

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