TaxTMI 
TaxTMI 
2024 (12) TMI 989
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....ncy proceedings. She submits that the resolution plan was approved on February 24, 2021 wherein the Income Tax Department had also put forward its claim before the resolution professional. Subsequent to the resolution plan being approved, the assessment order has been passed for the particular assessment year. 4. Learned counsel appearing on behalf of the petitioner further reiterates that by letter dated March 8, 2021 this information had been communicated to the Income Tax Department. She, accordingly, submits that the entire proceedings that has been initiated and the impugned order that has been passed are without any basis in law and are specifically contrary to Section 31 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'the Code'). 5. Learned counsel appearing on behalf of the petitioner relies upon the judgements of the Supreme Court in the case of Committee of Creditors of Essar vs. Satish Kumar Gupta reported in (2020) 8 SCC 531 and in the case of Ghanshyam Mishra and Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. reported in 2021 (4) TMI 613 to buttress her argument that once a resolution application has come into picture, the successf....
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.... a complete Code in itself. Upon admission of petition under Section 7 there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information memorandum. The resolution applicants submit their plans on the basis of the details provided in the information memorandum. The resolution plans undergo deep scrutiny by RP as well as CoC. In the negotiations that may be held between CoC and the resolution applicant, various modifications may be made so as to ensure that while paying part of the dues of financial creditors as well as operational creditors and other stakeholders, the corporate debtor is revived and is made an ongoing concern. After CoC approves the plan, the adjudicating authority is required to arrive at a subjective satisfaction that the plan conforms to the requirements as are provided in sub-section (2) of Section 30 of the I&B Code. Only thereafter, the adjudicating authority can grant its approval to the plan. It is at this stage that the plan becomes binding on the corporate debtor, its employ....
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....ing under any law for the time being in force and payable to the Central Government, any State Government or any local authority. 91. It is a cardinal principle of law that a statute has to be read as a whole. Harmonious construction of clause (10) of Section 3 of the I&B Code read with clauses (20) and (21) of Section 5 thereof would reveal that even a claim in respect of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority would come within the ambit of "operational debt". The Central Government, any State Government or any local authority to whom an operational debt is owed would come within the ambit of "operational creditor" as defined under clause (20) of Section 5 of the I&B Code. Consequently, a person to whom a debt is owed would be covered by the definition of "creditor" as defined under clause (10) of Section 3 of the I&B Code. As such, even without the 2019 Amendment, the Central Government, any State Government or any local authority to whom a debt is owed, including the statutory dues, would be covered by the term "creditor" and in any case, by the term "other stakeholders" as provi....
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....be effective from the date on which the I&B Code has come into effect. (iii) 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 the date on which the adjudicating authority grants its approval under Section 31 could be continued." (Emphasis by me) 8. Furthermore, division bench of the Bombay High Court in the case of Uttam Galva Metallics Ltd. and Mr. Subodh Karmakar vs. Assistant Commissioner of Income Tax, Union of India reported in 2024 (9) TMI 371 has dealt with all the Supreme Court judgments on the point extensively including the judgments cited above and has come to the following conclusion :- "16. It is therefore crystal clear that once a resolution plan is duly approved under Section 31 (1) of the IBC, the debts as provided for in the resolution plan alone shall remain payable and such position shall be binding on among others, the Central Government and various authorities, including tax authorities. All dues which are not part of the resolution plan would stan....
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.... under the provisions of the Act can be initiated, continued with and concluded where CIRP under the Code has been initiated and moratorium under Section 14 of the Code has been imposed by the NCLT, has not expressly been raised nor answered, and therefore remains res-integra. The third question and its answer in the above judgment only relate to initiation of proceedings for recovery of dues and do not relate to the initiation of any fresh assessment proceedings. Moreover, if the final order of the Supreme Court were also perused, it would be clear that it does not cover the point of initiation, continuation and culmination of assessment proceedings, and only declares that the "respondents are not entitled to recover any claims or claim any debts owed to them from the Corporate Debtor accruing prior to the transfer date". 11. He further submits that if proceedings under the Act could be initiated, continued with and culminated during the course of CIRP and institution of Moratorium u/s 14 of the Code, the following may also kindly be considered, for these have a bearing on the fact that income tax proceedings should not get shadowed or extinguished merely by the institution of CR....