TaxTMI 
TaxTMI 
2025 (3) TMI 1052
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....d the Resolution Plan submitted by the appellants. 2. The Resolution Plan had referred to the liability of Rs.16, 85, 79, 469/- (Rupees Sixteen-crores, eighty-five lakhs, seventy-nine thousand, four-hundred and sixtynine only) of the first respondent (Income Tax Department) for the assessment year 2014-15 based on the demand dated 18th December 2017 which was rectified under section 154 of the Income Tax Act, 1961 (for short, 'the IT Act'). The liability was shown in the Resolution Plan under the heading "Contingent liabilities". After the approval of the Resolution Plan, the first respondent issued demand notices dated 26th December 2019 and 28th December 2019 under the IT Act concerning assessment years 2012- 13 and 2013-14, respectively, in respect of the CD. However, admittedly, no claim about the demands for the two assessment years was submitted before the Resolution Professional. The second respondent, the Monitoring Professional, addressed a letter to the first respondent, contending that the demands for the two aforesaid assessment years were unsustainable in law. As the first respondent issued a letter dated 2nd June 2020 asserting the said demands, the second responde....
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....aim regarding income tax dues of the CD for the assessment years 2012-13 and 2013-14. In sub-clause (e) of Clause 2 of the approved Resolution Plan, under the heading 'Settlement of Outstanding Liabilities', it was provided thus: ".. .. .. .. .. .. .. The Resolution Applicant however understands from the information made available, all does (sic dues) pertaining to the Statutory Liabilities being paid on time. Therefore, the Resolution Applicant proposes to pay all Statutory Liabilities as appearing in the balance sheet of CIRP commencement date i.e. 31.05.2018 in the normal course of business. Post payment as stated above, the entire Statutory due shall stand satisfied, settled and extinguished, and no claims whatsoever, of any nature, shall subsist." ( emphasis added ) In sub-clause (g) of Clause 2 of the Resolution Plan, contingent liabilities have been mentioned. One of the contingent liabilities mentioned is Income-tax liability as regards the assessment year 2014-15 in the sum of Rs.16, 85, 79, 165/- (Rupees Sixteen-crores, eighty-five lakhs, seventy-nine thousand, one-hundred and sixty-five only). The Resolution Plan provides for the ma....
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...., satisfy that the resolution plan has provisions for its effective implementation." ( emphasis added ) The words starting from 'including' and ending with 'owed' were incorporated in the IB Code with effect from 16th August 2019. Section 31(1), as it stood before the amendment mentioned above and after the amendment, came for consideration in the decision of this Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd.2 Paragraph 102 of the said decision reads thus: "102. In the 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 to a clai....
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....thout recording reasons, the NCLT held that the application was frivolous as the second respondent was seeking relief, which the Bench did not consider at the time of the approval of the Resolution Plan. The NCLT also imposed costs of Rs. one lakh on the appellants and the second respondent. We cannot approve NCLT's approach of not considering the application on merits and dismissing the same without recording any reasons and also by imposing costs. The order of payment of costs was unwarranted. 11. In view of the above discussion, the Resolution Plan approved on 21st May 2019 is binding on the first respondent. Therefore, the subsequent demand raised by the first respondent for the assessment years 2012-13 and 2013-14 is invalid. 12. Once the Resolution Plan is approved by the NCLT, no belated claim can be included therein that was not made earlier. If such demands are taken into consideration, the appellants will not be in a position to recommence the business of the CD on a clean slate. On this aspect, we may note what is held in paragraph 107 of the decision of this Court in the case of Committee of Creditors of Essar Steel India Ltd^1. Paragraph 107 reads thus: ....