TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 804
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....pectively are directed against the CIT(A)-III, Nagpur's separate orders dated 28.08.2014 [in former twin] in Case Nos. CIT(A)-III/310/10-11, in Case No. CIT(A)-III/289/11-12 and dated 17.01.2017 [in third assessment year in case No. CIT(A)-1/80/2014-15] respectively. Relevant proceedings herein are u/s. 143(3) of the Income Tax Act, 1961, except in assessment year 2006-07 wherein the order was passed u/s. 143(3) r.w.s. 254 of the Income Tax Act, 1961. The assessee's remaining appeal ITA.No.101/Nag./2015 for assessment year 2010-11 has emanated from the CIT(A)-1, Nagpur's order dated 22.12.2014 passed in Case No. CIT(A)-1/061/2013-14 in proceedings u/s. 143(3) of the Income Tax Act, 1961 (hereinafter in short "the Act"). 2. Heard both the parties. Case files perused. 3. Suffice to say, it emerges at the outset that we hardly need to decide all the instant six appeals by a detailed adjudication. This is for the precise reason that the National Company Law Tribunal's has approved assessee's resolution plan submitted under the Insolvency and Bankruptcy Code 2016; vide order dated 03.07.2019, followed by further modified scheme dated 22.07.1996, which is also stated to have been uphel....
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....e assessment year 2014 - 15. The Petitioner has challenged the legality and validity of the said notice mainly on the ground that it is contrary to the decision of the Hon'ble Supreme Court of India in the case of Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited and others reported in 2021(9) SCC 657. 5. In the present case, one M/s. Edelweiss Asset Reconstruction Company Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "IBC") to initiate Corporate Insolvency Resolution Process (hereinafter referred to as "CIRP Proceedings") against the Petitioner. The said Application was admitted by the National Company Law Tribunal, Mumbai (hereinafter referred to as "NCLT") vide order dated 05.04.2017 and on 11.04.2017, an Interim Resolution Professional (hereinafter referred to as "IRP") was appointed by the NCLT. The IRP was later appointed as the Resolution Professional (hereinafter referred to as "RP') of the Petitioner company. The RP made a public announcement in accordance with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Proce....
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.... Plan and therefore, it could not have been raised before the Resolution Professional under the CIRP proceedings. Thus, according to Mr. Bhattad, such statutory claim is maintainable even after the approval of the Resolution Plan. In fact, he has raised a preliminary objection of maintainability of the Petition by contending that once notice under Section 148 is issued, a proper course of action for the noticee is to file its returns and if he so desires, then to seek reasons for issuing notice. After which, the Respondent No. 1 - Assessing Officer is bound to furnish reasons as sought by the noticee. On receipt of such reasons, the noticee is entitled to file objections for issuance of notice. After the objections are filed, Respondent No. 1 - Assessing Officer is bound to dispose of the same by passing a speaking order. The aforesaid argument has been made in view of the law laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. Income-Tax Officer, reported in 2002 (125) Taxman 963 SC. Accordingly, it is argued by the learned counsel for the Respondent Nos. 1 and 2 that the alternate and only remedy for the Petitioner is to seek reasons for iss....
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....s approved, the management is handed over under the plan to the Successful Resolution Applicant so that the Corporate Debtor is able to pay back its debt and get back on its feet. 13. The Adjudicating Authority conducts an enquiry in terms of Section 30(2) of IBC on the point as to whether the Resolution Plan provides, inter alia, the repayment of the debts of Operational Creditors in the prescribed manner and that the plan does not contravene any provisions of the law for the time being in force. In that sense, once the Resolution Plan is approved by the Adjudicating Authority and once it attains finality, it could be presumed that the plan does not contravene any of the provisions of law for the time being in force including provisions of the Income Tax Act, 1961. 14. The Hon'ble Supreme Court, in context with raising subsequent claims has held that a Successful Resolution Applicant cannot suddenly be faced with undecided claims after the Resolution Plan is submitted by him, as it would lead to uncertainty about the amount payable by a Prospective Resolution Applicant who would successfully take over the business of the Corporate Debtor. It is accordingly held by the Ho....
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....n No.9480 of 2019 in the case of Ultra Tech Nathdwara Cement Ltd. vs. Union of India & Ors., by judgment and order dated 7.4.2020 has taken a view, that the demand notices, issued by the Central Goods and Service Tax Department, for a period prior to the date on which NCLT has granted its approval to the resolution plan, are not permissible in law. While doing so, the Rajasthan High Court has relied on the judgment of this Court in the case of Committee of Creditors of Essar Steel India Limited through Authorised Signatory (supra). 100. The Calcutta High Court in the case of Akshay Jhunjhunwala & Anr. vs. Union of India through the Ministry of Corporate Affairs & Ors. 35 has also taken a view, that the claim of operational creditor will also include a claim of a statutory authority on account of money receivable pursuant to an imposition by a statute. We are in agreement with the views taken by these Courts." (Emphasis supplied) 16. Ultimately, the Hon'ble Supreme Court has answered the questions framed in the following manner. 102.1. That once a resolution plan is duly approved by the Ad- judicating Authority under sub section (1) of Section 31, the claims as provi....
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....ce issued under Section 148 of the Income Tax Act, 1961. 18. As we understand from the above rulings, the aim and object of IBC is to revive the Corporate Debtor by putting quietus to the claims against it. Providing certainty to the Resolution Applicant of "no" claims in future against the Corporate Debtor appears to be the essence of the Resolution Plan. Such inference could further be substantiated on the ground that the provisions of the IBC (Section 238 of IBC) have an overriding effect, if there is any inconsistency with any of the provisions of the law for the time being in force, including the Income Tax Act, 1961. The Hon'ble apex Court has also held that section 31 of the amended Act will have retrospective effect. 19. Having said so, it is now crystallized that the claims which were not a part of the Resolution Plan including recoverable statutory dues, shall stand extinguished upon approval of the Resolution Plan. 20. In the present case, the Income Tax Department had, on 07.06.2017, raised claims to the tune of Rs. 50,23,770/-. The said claim was fully and finally settled at Rs. 4,00,000/- in terms of the Resolution Plan. The impugned notice does not discl....
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....urns of the previous years, which then could not be a part of the Resolution Plan. To counter such a situation, the statutory authorities will have to explore the possibility of raising such claims before the Resolution Professional or Adjudicating Authority, as the case may be, by requesting to make certain provisions for payment of statutory claims in the Resolution Plan. Whether to accept such claim is a matter that should be left to the COC, the Resolution Professional or the Adjudicating Authority. However, in absence of any such claim having been made and dealt with by the Resolution Professional and in absence of any provision to settle such claim in the Resolution Plan, such claim could not be raised subsequently. In that sense, the Petitioner is correct in contending that the impugned notice could not have been issued by the Assessing Officer. 23. The Income Tax Authority or the Legislature may also explore possibility to make necessary provisions to overcome such situation by lending circular under Rules or by way of an Amendment in the Income Tax Act, 1961, in line with the section 44(6) of the Maharashtra Value Added Tax, Act, 2002, which provides as under; "44. S....