TaxTMI 
TaxTMI 
2022 (9) TMI 1680
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....a, all other claims has extinguished which includes Government/Statutory Authority whether lodged during the Corporate Insolvency Resolution Process (CRIP) or not; and that the NCLT has also made it clear that dues whether contingent/unconfirmed shall also stand extinguished and drew our attention to para no. 5 wherein the Ld. NCLT has observed as under: - "5. As regards to various reliefs and concessions which are being sought, we hereby grant following relief and concessions only as against relief and concessions claimed by Resolution Professional: 1 After the payment of the dues to the Secured Creditors, Unsecured Creditors, Operational Creditors, as per the Resolution Plan all the liabilities of the said stakeholders shall stand permanently extinguished after the approval of the Resolution Plan. We further hold that other claims including Government/Statutory Authority, whether lodged during CIRP or not, shall stand extinguished after the approval of the Resolution Plan. We further hold that contingent/unconfirmed dues shall also stand extinguished." 3. Therefore, according to assessee, in the light of the Ld. NCLT's order which is effective from 05.10.2021....
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....sed on 27.12.2016 under Section 143(3) read with Section 144 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). Respondent No. 1 is the Assessing Officer of the Petitioner who has issued the impugned notice. Respondent No. 2 is the Principal Commissioner of Income Tax, who has the administration jurisdiction over the cases of the Petitioner and who has allegedly granted approval for issuance of impugned notice. Respondent No. 3 is the Union of India and is the employer of Respondent Nos. 1 & 2. The Respondent No. 1 - Assessing Officer has issued the notice dated 25.03.2021 under Section 148 of the Act, seeking to reopen the concluded assessment of the Petitioner company for the 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 Ba....
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.... that the claim raised through the impugned notice was not a part of the Resolution Plan. However, Shri Bhattad, learned counsel for the Respondent Nos. 1 and 2, has come up with a defense that the claim raised through the impugned notice could not be a part of the Resolution Plan inasmuch as the claim was not crystallized at that time. According to him, the notice has been issued under Section 148 of the Act on the ground that the income chargeable to tax for the assessment year 2014-15 has escaped assessment and therefore, the Petitioner has been called upon to submit its return under the provisions of the Income Tax Act, 1961. The claim itself has been disclosed subsequent to the approval of the Resolution 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 f....
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....swering the question involved in the present Petition. 12. As held by the Hon'ble Supreme Court, one of the dominant objects of the IBC is to see that an attempt has to be made to revive the Corporate Debtor and make it a going concern. For that a Resolution Applicant has to prepare a Resolution Plan on the basis of the Information Memorandum containing various details that have been gathered by Resolution Professional after having received various claims in response to the statutorily mandated public notice. The resolution plan is approved by Committee of Creditors (hereinafter referred to as "COC"). The Resolution Plan is then required to be approved by the Adjudicating Authority i.e., NCLT and once it is 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 t....
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....nal debt is owed would come within the ambit of 'operational creditor' as defined under subsection (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 subsection (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 provided in sub section (1) of Section 31 of the I&B Code. 99. The Division Bench of the Rajasthan High Court in D.B. Civil Writ Petition 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 Author....
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....ued 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. The concluding remarks of the Hon'ble Apex Court are that, on the date of approval of the Resolution Plan by the Adjudicating Authority, all such claims which are not a part of the Resolution Plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not a part of the Resolution Plan. The expression 'that no person will be entitled to initiate any proceedings' would include the proceedings in the nature of notice 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....
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....would be expected from all the stakeholders to diligently raise their claim. The Income Tax authorities in that sense, ought to have been diligent to verify the previous years' assessment of the Corporate Debtor as permissible under the law and to raise the claim in the prescribed form within time before the Resolution Professional. In the present case, the Income Tax Authorities failed to do so and therefore, the claim stood extinguished. 22. As stated earlier, there could be a contingency where statuary claim is raised after the approval of the Resolution Plan, owing to receipt of information of the Corporate Debtor having suppressed certain facts while filing returns 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,....
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..... We hold that both the Petitions are maintainable. Both the Petitions are allowed. The impugned notices dated 25.03.2021 and 24.03.2021 are hereby quashed and set aside." 4. Therefore, in the light of the aforesaid position of the law, as held by the Hon'ble Supreme Court in Ghanashyam Mishra (supra) and the Hon'ble Jurisdictional High Court in Murli Industries (supra) according to assessee, the impugned notice of the Ld. PCIT dated 16.02.2021 proposing the revision of the assessment order dated 17.12.2019 [which was after the Ld. NCLT order dated 05.10.2021] and consequent action was without sanction of law and was not permissible, so it was prayed to be quashed. 5. In the present case in hand, we note that the NCLT order approving the Resolution Plan took effect from 05.10.2021 and as per the object and scheme of I&B Code, the successful resolution applicant M/s. SVG Fashion Pvt. Ltd. (hereinafter in short M/s. SVG) cannot suddenly be faced with undecided claims after the Resolution Plan was submitted by it (which has been approved by NCLT on 05.10.2021) as it would lead to uncertainty about the amount payable by the prospective Resolution Applicant [in this case M/s. SVG]....
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....and extinguished after the approval of the Resolution Plan. We further hold that contingent/unconfirmed dues shall also stand extinguished. XV All other terms and conditions of the Resolution plan which are not specifically denied or modified shall be deemed to have been granted in terms of the Resolution Plan Approved by CoC.'' 7. And few definitions and relevant clauses of Resolution Plan is re-produced as under; - Definition (I) "Applicable Laws" means, any statute, law, regulation, ordinance, rule, judgement, order, decree, clearance, approval, directive, guideline, policy, requirement, or other governmental restriction or any similar form of decision, or determination by, or any interpretation or administration of any of the forgoing by, any Governmental Aency of India whether in effect as of the date of this RFRP or thereafter and in each case as amended or modified. (Ia) "Government Authority" Shall mean the President of India, the Government of India, the Governor and the Government of any State in India, any Ministry or Department of the same, any municipal or local government authority, any authority or private body exercising powers....
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....lue for the amount due to the Operational Creditors - Central and State Government, Statutory dues, taxes, etc. including liabilities under disputes would be NIL. Hence no amount is payable to such operational creditors, Effectively, no amount would be payable towards any of the claims submitted by the Government Authorities and approved by RP. iii. Any claim from any person claiming to be Statutory Authority or Government Authority having any jurisdiction or claim over the Corporate Debtor, that has not been filed with the Resolution Professional, or if filed, has not been verified by the Resolution Professional or has been rejected by the Resolution Professional, or if verified, but has not been informed to the Resolution Applicant before submission of this Resolution Plan, shall stand waived and extinguished and shall no longer be payable. - iv. It is further clarified that all dues and any amount payable under the Companies Act 2013/1956 etc, taxes, duly, penalties, interest, fines, cesses, surcharges, unpaid Tax Deducted at Source/Tax Collected at Source, or any other tax liability which is not admitted or contingent, whether part of above claim or not, perta....