TaxTMI 
TaxTMI 
2023 (2) TMI 1319
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....ng Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) in IA No. 32 of 2020 in C.P. (IB) No. 20/GB/2017 wherein the application i.e. I.A. No. 32 of 2020 filed by the Respondent herein /Corporate Debtor- Assam Company India Ltd. prayed for the following reliefs:- i) The demand of the Respondents for Rs. 23,83,408/- for Assessment Year 1986-1987 should be extinguished; ii) The demand of the Respondents for Rs. 21,46,262/- for Assessment Year 2006-2007 should be extinguished; iii) The demand of the Respondents for Rs. 10,23,57,960/- for Assessment Year 2010-2011 should be extinguished; iv) The demand of the Respondents for Rs. 5,38,41,660/- for Assessment Year 2011-2012 should be extinguished; v) The demand of the Respondents for Rs. 460,29,210/- for Assessment Year 2012-2013 should be extinguished; vi) The demand of the Respondents for Rs. 6,69,84,657/- for Assessment Year 2013-2014 should be extinguished; vii) The demand of the Respondents for Rs. 6,69,84,657/- for Assessment Year 2014-2015 should be extinguished; viii) Any other demand prior to 20th September, 2018 should be extinguished; ....
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....e said application. The claim was filed in the form of Form B dated 14.11.2017. ii) On 12.01.2018, a Resolution Professional named CA Kannan Tiruvengada was appointed. The Resolution Professional informed the Appellants that the claim of the Department would not be admitted since the Respondent has preferred an appeal with the Commissioner of Income Tax (Appeals) for both the aforementioned Assessment Years. The Resolution Professional, however, communicated that after the final order of the CIT(A), the new promoter of the Respondent would pay the demand which is a statutory liability. In response to this, the Appellants contended that the mere filing of an appeal would not grant immunity to the Respondent from recovery of tax dues. The Resolution Professional in a written communicated dated 31.07.2018 the Income Tax Department that "The matter is still pending in the CIT (Appeals) and till date no order of judgment is passed by them, the corporate debtor also consider your claim as contingent liability in the books of accounts of the company. We are also in the same opinion that your claim is a future obligation for ACIL and cannot be considered as current liability, the payabl....
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....hen the CIRP Proceedings were drawn further stating that the Appellants had not received the order of the Bench of NCLT dated 20.09.2018 and the copy of the approved resolution plan as well. The Respondent was asked to pay the outstanding demand vide letter no. 674 dated 12.03.2019. However, the Respondent wrote to the Appellants for extinguishing all claims against them relating to the period prior to the date of order of the Hon'ble Bench of NCL T since as per the approved resolution plan at clause 12.1 no other amount was to be paid to the operational creditors. In view of the above, the Appellants filed an application for review of the order of the Hon'ble NCLT dated 20.09.2018 with necessary directions to the Resolution Professional for submission of the revised resolution plan incorporating the entire amount alleged to be due to the Appellants. Subsequently, the Hon'ble NCLT, Guwahati vide its order dated 22.10.2019 stated that since the IRP intimated the Department that the demand after finalization of appeal by CIT(A) would be payable by the new promoter, such written intimation of the IRP is to be read with the new resolution plan and the demand of the Appellan....
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....proceed further on the attachment order till further order. The Respondent filed an application bearing I.A. No. 32/2020 for extinguishment of the demand of Rs 1,32,22,421/- raised under Section 144 read with Section 143(3) of the Income Tax Act,1961 for the Assessment Year 2017-18 and extinguishment of all other liabilities as per the approved resolution plan, barring aside the claims admitted, any other claim and demand prior to the effective date i.e. 20.09.2018 stand extinguished. After hearing the parties, the NCLT passed the order impugned dated 10.02.2021. Hence this Appeal. 3. This instant Appeal has been preferred on the grounds that Impugned Order fails to take into account that the Resolution Professional had intimated on 31.07.2018 that the dues of the Income Tax department as and when they became payable after the appeal process would be payable by the successful resolution applicant. The Appellants have made the recovery of the outstanding demand for the Assessment Year 2013-14 and 2014-15 vide Form B on 14.11.2017 which is prior in time to the resolution plan being approved on 20.09.2018. The Tribunal vide its order dated 22.10.2019 stated that since the IRP intim....
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....ution Professional vide email dated 08.08.2018 that the NCLT, Guwahati Bench may consider payment of Rs. 1,97,92,084 being 15% of the outstanding dues owed to the Appellants since the Respondent had filed petition for stay of demand before the Assessing Officer. Subsequently, the balance amount which is considered as "contingent liability" by the Respondent in the audited accounts for the year 2017 stands payable by the Respondent upon final outcome of the appeal. The Respondent failed to deposit the required amount and as such the proposed stay demand was considered "null and void" and the entire amount of Rs. 16,20,25,953 was outstanding and collectible demand as on the date of CIRP. 7. It is further submitted that on 25.10.2018, the Appellants received a draft of Rs. 41,22,407 from the Resolution Professional as a tranche payment. Further, the Appellants received another draft of Rs. 78,90,284 vide letter dated 07.01.2019 as a full and final payment totaling to Rs. 1,20,23,691 which is not even 15% of the outstanding demand. The Respondent was asked to pay the outstanding demand vide letter no. 674 dated 12.03.2019. However, the Respondent wrote to the Appellants for extingui....
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.... three months was granted and the Appellants were directed to withdraw the attachment. Simultaneously, the Respondent also filed a stay petition before the NCLT, Guwahati Bench and the NCLT further asked the Appellants not to proceed further on the attachment order till further orders. The NCLT held that after 15 months of the approval of the resolution plan the claim of the Appellants cannot be entertained. 9. It is further submitted that the Impugned Order is bad in law as the claims of the Income Tax department were upheld by the NCLT, Guwahati Bench vide its order dated 22.10.2019. Thus, the order of the NCLT dated 10.02.2021 is contrary to the order dated 22.10.2019 passed by the NCLT. It is respectfully submitted that once NCLT had directed that the emails of the Resolution Professional are to be treated as part of the resolution plan, it was clearly open to the Income Tax Department / Appellants to take necessary steps available to them under law for recovery of their dues. If the Respondent was aggrieved by the order of the NCLT dated 22.10.2019 he had the remedy to appeal before this Appellate Tribunal within 30 days of passing of the order which he failed to do. Thus, ....
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.... to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of Section 53, whichever is higher. The resolution plan is also required to provide for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, which also shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of Section 53 in the event of a liquidation of the corporate debtor. Explanation 1 to clause (b) of subsection (2) of Section 30 of the I&B Code clarifies for the removal of doubts that a distribution in accordance with the provisions of the said clause shall be fair and equitable to such creditors. The resolution plan is also required to provide for the management of the affairs of the corporate debtor after approval of the resolution plan and also the implementation and supervision of the resolution plan. Clause (e) of sub-section (2) of Section 30 of the I&B Code also casts a duty on RP to examine that the resolution plan does not contravene any of the provisions of the law for the time being in force." 43. The learned Solicitor General rightly argued that whe....
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....n plan, in such manner as might be specified by the Board. 46. Under Section 31 of the IBC, a resolution plan as approved by the Committee of Creditors under Sub-Section (4) of Section 30 might be approved by the Adjudicating Authority only if the Adjudicating Authority is satisfied that the resolution plan as approved by the Committee of Creditors meets the requirements as referred to in Sub-Section (2) of Section 30 of the IBC. The condition precedent for approval of a resolution plan is that the resolution plan should meet the requirements of Sub-Section (2) of Section 30 of the IBC. 47. In Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited and Another, this Court affirmed that Resolution Plans would have to conform to the statutory provisions of the IBC, and held: - "147. In terms of Regulation 39(4), the RP shall endeavour to submit the resolution plan approved by the CoC before the adjudicating authority for its approval under Section 31 IBC, at least fifteen days before the maximum period for completion of CIRP. Section 31(1) provides that the adjudicating authority shall approve the resolution plan if it is satis....
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....etion has to be exercised in that way. If a Resolution Plan is ex facie not in conformity with law and/or the provisions of IBC and/or the Rules and Regulations framed thereunder, the Resolution would have to be rejected. It is also a well settled principle of interpretation that the expression "may", if circumstances so demand can be construed as "Shall". 52. If the Resolution Plan ignores the statutory demands payable to any State Government or a legal authority, altogether, the Adjudicating Authority is bound to reject the Resolution Plan. 53. In other words, if a company is unable to pay its debts, which should include its statutory dues to the Government and/or other authorities and there is no plan which contemplates dissipation of those debts in a phased manner, uniform proportional reduction, the company would necessarily have to be liquidated and its assets sold and distributed in the manner stipulated in Section 53 of the IBC. 54. In our considered view, the Committee of Creditors, which might include financial institutions and other financial creditors, cannot secure their own dues at the cost of statutory dues owed to any Government or Governm....
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....the Ld. Counsel for the Respondent during the course of argument and in his reply affidavit along with written submissions submitted that instant Appeal is not maintainable as the Successful Resolution Applicant cannot be burdened with liability after the plan has been approved. Section 31 of the IBC clearly states that upon approval of the resolution plan it becomes binding on all the stakeholders including Central Government, 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 is owed cannot be burdened with the liability when the resolution plan is already approved. In the instant case the paragraph No. 12.1.1 and 12.1.2 of the resolution plan duly approved by the NCLT, Guwahati bench states that the Successful Resolution Applicant and the Respondent shall have no liability towards any Operational Creditors and other creditors with respect to any claims (as defined under the Code) relating in any manner to the period prior to the Effective Date. All claims (whether final or contingent, whether disputed or undisputed and whether or not notified to or claimed against ACIL) of all Government Auth....
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....memorandum accordingly. In the present case, the Appellants vide its email dated 31st July, 2018 mentioned such instructions which has so bearing under the I&B Code as the resolution professional has no powers to give such instructions or otherwise allow such claim which is not forming the part of Information Memorandum to be received from the successful resolution applicant. Thus, such communication made in email dated 31st July, 2018 is not binding upon the successful resolution applicant. In this regard referred following judgment. * Swiss Ribbons Pvt. Ltd. v. Union of India & Ors. (2019) SCC OnLine SC 73. 15. It is further submitted that the resolution plan approved does not deal with any entitled to what has been admitted by the Resolution Professional. The resolution plan has approved the claim of the Appellant to the extent of Rs. 1,20,23,691.03 and it does not deal with any further entitlement to the Appellants beyond what is admitted by the Resolution Professional. In this regard referred following judgment. * Mack Star Marketing Pvt. Ltd. v. Ashish Chawchharia Resolution Professional of Jet Airways (India) Pvt. Ltd., 2019 SCC OnLine SC 73. 16. It i....
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....Year 2014-15 for Rs. 9,50,41,296 totaling to Rs. 16,20,25,953/- before the Resolution Professional which were outstanding before the date of admitting the application and the claim was filed in the form of 'Form - B' dated 14.11.2017 by Income Tax Department. We also observed that on 25.10.2018, the Appellants received a draft of Rs. 41,22,407 from the Resolution Professional as a tranche payment. Further, the Appellants received another draft of Rs. 78,90,284 vide letter dated 07.01.2019 as a full and final payment totalling to Rs. 1,20,23,691 which is not even 15% of the outstanding demand. The Respondent was asked to pay the outstanding demand vide letter no. 674 dated 12.03.2019. However, the Respondent wrote to the Appellants for extinguishing all claims against them relating to the period prior to the date of order of the NCLT since as per the approved resolution plan at clause 12.1 no other amount was to be paid to the Operational Creditors. The Appellants filed an application for review of the order passed by the NCLT dated 20.09.2018 with necessary directions to the Resolution Professional for submission of the revised resolution plan incorporating the entire amount allege....