AI Drafter 
TaxTMI 
TaxTMI 
2022 (2) TMI 798
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....(released on 26.10.2019) passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench. By the impugned order the learned Adjudicating Authority has approved the Resolution Plan submitted by the Appellant. The Appellant is aggrieved only against observations made by the Adjudicating Authority in paragraphs 238 and 244. Apart from it, the Appellant is not aggrieved in any manner with the impugned judgment. The only prayer made in the Appeal is that observations and directions of the Adjudicating Authority in paragraphs 238 and 244 be set aside. 2. Corporate Insolvency Resolution Process with regard to 'Asian Colour Coated Ispat Ltd.' (Corporate Debtor) was initiated by order dated 20.07.2018. Pursuant to invitation for submission of Expression of Interest, Appellant submitted Resolution Plan dated 08.03.2020 with addendum dated 17.06.2019. The Resolution Plan was approved by 79.3% majority voting shares of the Committee of Creditors (CoC). An application was filed by the Resolution Professional before the Adjudicating Authority seeking approval of the Resolution Plan. The Resolution Plan having been approved and application filed before the Adju....
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....nder Section 79 should be given to the Resolution Applicant. It is submitted that observations in the judgement was that the Applicant can claim such benefit of carry forward losses before the appropriate Income Tax Authority. 6. Learned Counsel for the Resolution Professional has also filed reply and does not dispute with the submissions of the learned counsel for the Appellant regarding carrying forward of losses. Resolution Professional has also submitted that in compliance of his duties as Resolution Professional notice was issued under Section 79 of the Income Tax Act, 1961 to the Income Tax Authorities. In its reply, Respondent has stated that Respondent No. 1 has no objection to grant of prayer made by the Appellant under Section 79 of the Income Tax Act, 1961. 7. We have considered submissions made by learned counsel for the parties and perused the record. We may first notice the observations of the Adjudicating Authority made in paragraphs 237 and 238, which are to the following effect: "237. It is being said in the resolution plan that the name of the company may be changed post the effective date. It is also being said that the company (CD) is not ordinari....
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....AC, the loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, if, all the shareholders of such company who held shares carrying voting power on the last day of the year or years in which the loss was incurred- (i) continue to hold those shares on the last day of such previous year; and (ii) such loss has been incurred during the period of seven years beginning from the year in which such company is incorporated: Provide that nothing contained in this section shall apply to a case where a change in the said voting power and shareholding takes place in a previous year consequent upon the death of a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift: Provided further that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholder....
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....ion 79 of the Income Tax Act, 1961 was to encourage resolution applicants to submit resolution plans for revival of distressed companies so that such companies are not forced into liquidation." 11. The amendment in Section 79 of the Income Tax Act, 1961 providing for exception in case of a company where change in shareholding takes place pursuant to Resolution Plan was with purpose and object. Thus, claim of carry forward of losses is not impermissible but can only be granted giving opportunity to the appropriate Income Tax Authority. The judgment of 'JSW Steel Ltd. vs. Ashok Kumar Gulla & Ors.' (supra) relied by the counsel for the Appellant was also a case of Successful Resolution Applicant with regard to whom Adjudicating Authority has made observations in so far as carry forward losses was concerned. In paragraph 12 and 17 of the judgment following has been laid down: "12. As to the determination of the issue of 'carry forward losses' of the 'Corporate Debtor', in spite of notice to the Income Tax Authority, no reply has been filed and no objection has been raised. However, taking into consideration the submissions made by the counsel for the Appellant- 'JS....