TaxTMI 
TaxTMI 
2024 (4) TMI 937
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....ay. 4. The petitioner has prayed for the following reliefs: "(A)YOUR LORDSHIPS be pleased to hold and declare that the respondents are legally prohibited from taking any coercive action against the petitioner Corporate Debtor in respect of any claims/offences that may have taken place prior to the Effective Date and are prohibited to continue the proceedings under the Income Tax Act; (B) Your Lordships be pleased to issue a writ of mandamus or any other appropriate writ, order or direction, quashing and setting aside the impugned notice(s) dated 12.12.2022 (Annexure A Colly) issued by respondent no. 2 and all further proceedings in pursuance thereto as being illegal, without any authority of law, jurisdiction and also violative of the scheme of the IB Code. (C) Your Lordships be pleased to stay the implementation, operation and execution of impugned notice(s) dated 12.12.2022 (Annexure A Colly) issued by the respondent No. 2, pending the admission, hearing and final disposal of this petition." 5. It appears that the respondent passed the assessment order on 13.03.2023 under section 147 read with section 144 of the Income Tax Act, 1961 [for short 'the Act'] for the Assess....
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.... extinguished against the Corporate Debtor after the approval of the resolution plan. We further hold that contingent/unconfirmed dues shall also stand extinguished; ° b. On the effective date, all claims, except provided in the plan, of the suspended management, erstwhile directors, and erstwhile shareholders shall stand permanently extinguished; c. On the effective date and with effect from the appointed date, all encumbrances on the assets of the Corporate Debtor prior to the plan shall stand permanently extinguished on completion of procedural formalities as provided in Companies Act, 2013; and laws time in force as applicable; d. For reliefs and concessions sought from the Government/Statutory Authorities, we direct the Resolution Applicant to approach the concerned Authorities who shall decide the issues. e. As regard to relief prayed under various provisions of Income Tax Act, 1961, the corporate Debtor / Resolution Applicant may approach the Income Tax Au "es who shall take a decision on relief and concessions sought by the Resolution Applicant in accordance with the provisions of Income Tax Act, 1961. f. The Resolution Applicant shall be entitled to r....
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....come effective from the date of passing of this order. V. The order of moratorium dated 03.02.2021 passed by this Adjudicating Authority under section 14 of IBC, 2016 shall cease to have effect from the date of passing of this order. VI. The RP shall forthwith send a copy of this order to the participants and the Resolution Applicant(s). VII. The RP shall forward all records relating to the conduct of the CIRP and Resolution Plan to the Insolvency and Bankruptcy Board of India to be recorded in its database. VIII. Accordingly, IA 18 of 2022 in CP (IB) 247 of 2020 is allowed and stands disposed of in terms of the above directions. IX. Urgent certified copy of this order, if applied for, to be issued to all concerned parties upon compliance with all requisite formalities." 7.4 It is the case the petitioner that as per clause 12.3 (viii) of the resolution plan as approved by the NCLT, the resolution applicant will not be liable in respect of any reassessment, reopening, revision, review or other proceedings under the direct and indirect statutes. Clause 12.3 (viii) of the resolution plan reads as under: "(viii). There being no liability of the RA in respect of any r....
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.... and also could not have issued the notice under section 156 of the Act, 1961 on 23.03.2023 pertaining to the assessment order 2018-19 as the reassessment notices issued prior to 1st July, 2022 would not survive and the entire re-assessment proceedings would lapse and would stand extinguished as per the provision of the IBC. 8.1 In support of his submissions reliance was placed on the decision of the Hon'ble Apex Court in case of Ghanshyam Mishra & Sons (P) Ltd vs. Edelweiss Asset Reconstruction Co. Ltd reported in (2021) 9 SCC 657. 8.2 Learned advocate Mr. Shah also referred to and relied upon the decision of this Court in case of M/s. Ultratech Nathdwara Cement Ltd vs. State of Gujarat dated 02.08.2023 in Special Civil Application No. 7120/2021 and the Delhi High Court in case of Tata Steel Limited vs. Deputy Commissioner of Income Tax dated 31.10.2023 in Writ Petition (Civil) No. 13188/2018 and the Bombay High Court in case of Murli Industries Limited through its Dy. Ex. Director vs. Assistant Commissioner of Income Tax and ors dated 23.12.2021 in Writ Petition No. 2948/2021. 8.3 Referring to the decision of the Apex Court in case of Ghanshyam Mishra & Sons (P) Ltd (supra) ....
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....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. Special provision regarding liability to pay tax in certain cases: (6) Subject to the provisions of the Companies Act, 2013, where any tax or other amount recoverable under this Act from a private company, whether existing or wound up or under liquidation, for ....
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.... and thereafter, the claims were lodged before the RP by the Income Tax Department for the assessment years 2009-10and 2013-14 and no claim was lodged for the Assessment Year 2001-2002 and in such circumstances, the Delhi High Court quashed and set aside the notices of demand and order dated 28.08.2017 and 17.10.2017 as unsustainable in law relying upon the decision of the Ghanshyam Mishra & Sons (P) Ltd (supra) of the Apex Court. 9. On the other hand, learned advocate Mr. Karan Sanghani appearing for the respondents submitted that the resolution plan approved by the NCLT on 01.07.2022 would extinguish all the liabilities for which no claim was made by the respondents before the RP as per the decision of the Apex Court in case of Ghanshyam Mishra & Sons (P) Ltd (supra), however, the assessment order for 2018-19 was passed on 13.03.2023 which is after the date of approval of the resolution plan by the NCLT on 01.07.2022 and therefore, there was no demand in existence or claim to be made by the respondents before the RP for the Assessment Year 2018-19. It was submitted that the proceedings which were pending during the period when the CIRP was in process is taken care of by Clause (....
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....referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less: Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less: Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first and second provisos and has not been admitted by the Adjudicating Authority before the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2020, such application shall be modified to comply with the requ....
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....(a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. Section 31. Approval of resolution plan. (1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors,[including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other stakeholders involved in the resolution plan. [Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.] (2) Where the A....
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.... result, we answer the questions framed by us as under: 102.1 That once a resolution plan is duly approved 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. On the date of approval of resolution plan by the adjudicating authority, all such claims which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of to a claim, which is not part of the resolution plan. 102.2 The 2019 Amendment to section 31 of the I & B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the I & B Code has come into effect. 102.3 Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to t....